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May 24, 1997


Microland loses 100% growth image

Microland Limited has lost its image of a 100 per cent growth company with its 1996-97 turnover rising by only 30 per cent.

In 1995-96 its turnover was Rs 1.2 billion but the networking company has managed only Rs 1.57 billion turnover for 1996-97. Company circles are humming and hawing about sluggish market demand.

As a result of the decline in income, the company has embarked on a 'recasting' of its business to keep its revenues free of market vagaries.

While its core business of providing solution for networking will remain a priority, it aims to become a service provider and has chalked out plans for its new software division.

"We're changing from being a technology provider to solutions and services provider," Anand Sudarshan, vice-president, marketing, said. Two new areas of business include 'network auditing' and training in networking.

The service division will be known as 'technology life cycle management services', which will assist corporations in decision-making, deployment and managing life cycles of network products, both in local and wide-area networking.

It will also intensify its outsourcing operations for giving IT consultancy, system integration solutions etc.

Besides, the company would focus more on its new business areas such as Internet, intranet and software. "Networking business in India has grown only by 20 per cent last year," said Anand, who blamed the low spending by corporations for the dip in networking business.

Undeterred by the low turnover this year, Microland said it expects to achieve Rs 2.2 billion in the current financial year.

Microland denied that it had to resort to price undercutting to stay in business. "We've not compromised on profit," Anand said, adding that profit for the year ended had yet to be calculated.

Admitting that "Last year was tough," he said while PCs grew by volumes, value remained poor.

While PCL and HCL dropped prices of personal computers, companies like Compaq, Sun and HP, who supply PCs for network, made no significant cut.

This, in turn, put off corporations from spending on networking, he said.

Microland Software, which recently bagged a pilot project from AST of Mitisubishi group from Japan, will further specialised in workflow and Internet business, ActiveX and Java. It is now focusing on Lotus Notes-based applications.

- Business Standard

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