Allied Digital Services’ Asset Lite to finance infrastructure projects

MUMBAI, INDIA: In the background of the ongoing economic slowdown where corporate customers are not willing to invest their funds into IT projects or upgrading their infrastructure, Mumbai-based solution provider Allied Digital Services (ADS) has created a business division called Asset Lite which will offer finance for IT procurement to these customers.

While explaining the objective for starting this division, Nitin Shah, CMD, ADS said there are IT companies like Cisco, IBM, HP and Avaya which extend finance to corporates who are buying their products. But a customer often needs financing for the entire solution stack which will be a mix of several vendor products. Besides, they do not need finance merely for certain hardware or software component, but for the complete project rollout. In the current scenario where banks have become very strict about offering finance for IT infrastructure acquisitions, Shah hopes that more customers will be glad to avail of Asset Lite’s offerings.

“Corporate customers need a neutral agency which will finance their entire project implementation and that is where Asset Lite comes in. It will give capex finance to customers, acting like a leasing company, for a stipulated time frame. At the end of that period, the products will revert back to the ownership of Asset Lite,” he noted.

Keeping in mind the return of these products, Asset Lite is also working on activating the secondary market where these used products can be deployed or sold. “Our actual revenue will be visible only after three years, when we can sell these products for a margin, which will be over and above the lease revenue,” said Shah.

He added that there are other renting and leasing agencies which offer hardware on rent but at the end of the lease period, they do not have a clear cut plan to dispose the products or resell them. This is why the company had roped in Sunil Alwa, who is the CEO of Asset Lite, an ex-banker, who specialised in leasing options for corporate.

The company will also limit itself to offering only IT infrastructure and will also open this offer to other solution providers, besides its parent company – ADS. The division has already got a couple of clients under its belt, and one of them is ADS’ principal vendor. It has tied up with some banks, which will help it in extending finance to the customers, where Asset Lite will take the underwriting.

In another development in ADS is contemplating spinning off Allied CNT Solutions, a joint venture firm between ADS and Sri Lankan-based CNT International for distribution of solution-oriented products, into a separate entity. Currently, Allied CNT is the regional distributor for Check Point Software, Landesk, eSafe Content Security solution, Barracuda, Validsoft, Stonesoft, Resilience, Celestix, Blackspider. Etc.

He refuted that CNT had plans to withdraw from the JV, though and is waiting for a mutually agreeable outcome after some discussions with the company.

Said Shah, “The Sri Lankan business is not doing well, and I think part of this is because of the political instability in the country. There is no movement happening in CNT and though this is a joint venture I am the one who is regularly infusing funds into the business. there seems to be no direction or guidance coming from CNT International and I hope to discuss this and see how to resolve this best quickly.”

This is why Shah is contemplating making the Allied CNT division a different entity and move it out of Allied Digital Services’ group of companies, as it is now a publicly listed one. “We don’t want investors to wonder about the Allied CNT business as it might have negative repercussions on our overall brand which is doing pretty well,” he said.

Once the entity is delisted, then Shah will discuss with the CNT management about their plans for the JV and how to spin it off into a new company. While Allied CNT has some ongoing projects and deals in hand, especially for brands like Watchguard and Barracuda, what is worrying Shah is the lack of response from his Sri Lankan counterpart, especially to ensure smooth distribution of the brands. This is surprising because CNT Solutions is a part of $1 billion Ceylinco Group, which is a distributor of security products, comprising more than 150 companies. It is a global group with the core business in the financial sectors, with business spread across diverse industry verticals such as the IT segment, property development and publications

Shah also evinced his decision to move away from the distribution business, which is felt is more transaction-based as compared to relationship-based business that he would like to engage in.

Allied Digital Services (ADS), has acquired 100% stake in Bangalore-based SAP Consulting and Support Services Provider En Pointe Technologies India. According to a company statement, the latter has a pool of competent and certified SAP consultants with rich experience of multi geography, multi country SAP consulting and support services.

This acquisition will further enhance ADS’ remote infrastructure management and application support services portfolio. ADS will leverage its state of the art NOC (Network Operation Centre) facility and extend proven remote support to mission-critical ERP applications like SAP.

This acquisition will help ADS to complete its vision of total end to end services for remote data centre support including business applications.