Microland Growth Slumps To 30%, Lines Up Rejig

Microland Ltd has failed to live up to its image of a 100 per cent growth company with its turnover just notching up a 30-per cent growth in 1996-97.

As against a turnover of Rs 120 crore in 1995-96, the networking company has achieved only Rs 157 crore turnover during 1996-97. Microland has attributed the fall in income to a sluggish market demand.

As a result of 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 ambitious plans for its newly-formed software division.

 

"We're changing from being a technology provider to solutions and services provider," Ananad 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 corporates 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 corporates for the dip in networking business.

Undeterred by the low turnover this year, Microland said it expects to achieve Rs 220 crore 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 corporates from spending on networking, he said.

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