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CNT moves to Opex model

CNT has changed its business strategy, focusing more on services business and on new technology, which can help the company increase its service revenue. The company is investing more in the recurring service revenue. “We are focusing on the cloud business, mobility business, and security,

Dipesh-Manglawhich is about managed services, where we can see tremendous business growth,” informs Dipesh

Mangla, Director, Computer Network and Telecom India (CNT). Dipesh feels that service model has greater business potential, so most of the consumers are moving towards it. With the technology changing every two to three years, migrating to the services model is the need of the hour. “Service model is the future, since it provides the flexibility of changing, including new technologies or tools as per the business need, at any time,” feels Mangla.

The transition from CAPEX to OPEX model has helped the company to look for bottom-line growth in the near future. “For the last five years my bottom-line in the hardware business has been going down consistently. It has really become thin and it has become difficult to survive so I feel it’s the time to transition to service model, which will give us better bottom-lines.. Hardware business requires more investments since the working capital increases over time but, service models do not need much investment,” he shares.

So, while continuing with the hardware business, CNT has added the service model business for growth. At present the company is getting 20% of revenue from their services model business which has started just 2 quarters back, and the rest 80% from hardware business. However, the company foresees 50% increase in revenue by Q3.

The revenue for 2013-14 was Rs.58 crore and the company is targeting at Rs. 100 crore next year after adding service model to their portfolio. To grow, they have also added new technologies and OEMs to their portfolio. “We have join hands with VMware, Symantec, and the focus has increased to software.

We are a service provider of software to OEMs. We have also signed up with HP for networking and this is the way we are growing and our OEMs are helping us to grow in our business,” he adds. and they have recently made the smallest data center in the country for Shyam Indus Power Solutions (SIPS). CNT also have Proof of Concept (POC) center where customers’ requirement is analyzed and customized solutions offered.

Dipesh has also tied up with Softlayer to offer customized flexible platform to cloud customers. The cloud solution can be upgraded with Softlayer as per the customer’s requirements. CNT is also providing softlayer services on rent, back up on softlayer, business continuity services and disaster recovery services. At present the company finds potential in telecom, manufacturing and infrastructure. “We are generating 10% from telecom, 20% from manufacturing, 5% from media, 10% from pharma, 15% from education, 20% from IT/ITES,” he informs.

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