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SSI focus on `slump' plan -- Software division grows 200 per cent

Our Bureau

CHENNAI, April 30

THE Chairman and Chief Executive Officer of SSI Ltd, Mr Kalpathi S Suresh, said that the company's focus would be on pulling through the economic slowdown in the next two or three years, ``assuming that the slump will last for two or three years''.

Addressing the press at a teleconference after revealing the third-quarter results, Mr Suresh said that SSI Technologies, the software development and consultancy arm of SSI Ltd, has grown over 200 per cent in the third-quarter ended March 31, 2001 as co mpared to the same period in the last year. SSI Tech is hoping to soon sign up a hospital consortium as a client. It opened its Sharjah office recently.

SSI Tech added 11 clients this quarter including Templeton Asset Management, Singapore, Deutsche Bank Asset Management in the UK, Bernard Madoff, US, and Merrill Lynch in both New York and London. The last order is worth about $2.5 million. It entailed m igration and re-engineering of their debt business systems, Mr Suresh said.

Asked if the division's focus on the financial services business did not result in a slowdown impact, Mr Suresh said: ``Bulk of our revenues comes from the financial services and the securities space. But we have not seen any slowdown impact from here.'' SSI Tech has 552 employees that are billable, 52 working on the product front and 69 on the bench. SSI Technologies has also seen a slump in demand for its telecom services. According to Mr K Shrinivas, Chief Executive Officer of SSI Tech: ``Telecom con tributes to only about 3 to 4 per cent of our revenues.''

Mr Suresh said that SSI Education -- the education arm of SSI Ltd -- would not suffer reverses due to the slowdown. According to him, ``IT education, we believe, will continue to grow. Especially the short-term courses business would thrive. For, in a sl ump scenario, competition for vacancies is higher and students would like to equip themselves better. If demand for IT education courses plummet, all players in the industry would be affected. But that's an extreme view to take.''

SSI Education has signed up 161 centres in the concluded quarter, taking the total number of signed up centres to 816.

The order book position for SSI Ltd stood at $23 million. According to Mr Suresh, ``Most of these are executable over 12 months while some are for a 15-month period.'' Offshore billing rates stood at $26 while onsite rates had come down by a dollar to $5 9, he said.

The company has decided to discontinue the operations of its Enterprise Support division which gave it a mere 2 per cent of revenues as compared to 43 per cent coming in from technology and 55 per cent from education, out of a total operating income of R s 103.68 crore.

Asked if the company was disinterested in providing maintenance services for mission-critical applications or if the demand was low, Mr Suresh replied, ``This division did sales and support work and implementation of applications for the users of Oracle and Microsoft software, not high-end enterprise-wide maintenance of systems. Hence the decision to discontinue operations.''

Queried on the possibility of another acquisition in the near future, Mr Suresh said, ``We do have the cash but we are not talking to any companies yet. We may commence doing so sometime in July.''

SSI had made an estimate last year that its technology business would grow to $40 million by June 2001. According to Mr Suresh, ``We should do it. We are in with a fighting chance.''