Calsoft to invest Rs 100 crore in India

PUNE: Calsoft Pvt Ltd., a Pune-based systems product outsourcing company, specializing in storage and networking areas, plans to invest Rs 100 crore in intellectual property and infrastructure for its expansion over the next five years. It also plans to extend its headcount to 1000 in the next five years. The existing team includes 150 engineers.

Calsoft co-founder and CEO, Dr Anupam Bhide said that the funds would be generated from the company reserves. Calsoft reported revenues to the tune of Rs 15 crore last year and expects to double the turnover this year owing to higher margins. Calsoft is also planning for an IPO in about five years.

Calsoft intends to follow the model adopted by Quanta- a Taiwanese company that develops laptops for customer companies such as Dell and Toshiba, letting the customer companies do the branding for the products.

“We wish to move up the value chain by taking more of the responsibility and initiative in product development from our customers. They want to be responsible for the marketing and branding, leaving the product development to us,” said Dr Bhide.

Calsoft competes in this space with companies such as Persistent Systems and Aztec. Dr Bhide said the company competes with the likes of Wipro, when bidding for projects.

While he did not place a value on the product outsourcing market, he informed that there is tremendous opportunity in storage. In US, at least 70 cents of every $ one is spent on computer systems.

In the year 2003, US venture fund companies spent 30 percent of their funds on storage companies ($ one billion). “Moreover, US regulations such as Sarbox, HIPPA and financial regulations are leading to increased storage needs,” he further explained.

Calsoft recently moved to a new facility spread over 40,000 sq ft with a capacity of 300 people. Dr Bhide said that most of the expansion would happen in Pune in the next two years, following which the company would explore the possibilities of a center outside Pune and at Bangalore.

Even as 15 of the company's customers are from US, there are plans to target the Japanese market. “The Japanese market is pretty tough to crack. But once cracked, it is a stable market. We are looking for the right local partner to developing business there,” Bhide said.