Emerging Company of the Year 2007: Flying High

Product companies in India remain somewhat rare. Unlike some
leading names of Indian telecom software companies, Tejas Networks decided to
address the domestic market first and build its own technology. In 2000, when
Tejas started, most potential customers assumed it was repackaging technology
from a Western vendor. All this occurred at a time (2000) when there were 200
start-ups in the global optical networking product space. Today less than a
dozen have survived amongst which Tejas has emerged as a leader in
next-generation SDH products.

Chiseling its own path as a telecom product company, Tejas
Networks was founded by Sanjay Nayak (CEO), Dr Kumar N Sivarajan (CTO), and
Arnob Roy (VP, Engineering). Overcoming initial apprehensions of "Made in
India" tag, today Tejas products are widely accepted globally. To date,
Tejas has shipped more than 40,000 systems deployed in various carrier networks
globally. "Chances are that a Tejas box is on every continent!" says
Kumar.

Tejas has developed a family of software-differentiated,
next-generation SDH/SONET products that enable telecom carriers to
cost-effectively build converged networks. The management at Tejas is eager to
capture global mind share under Tejas brand and set examples of a fledgling
Indian product company making it big globally.

In India, all major telecom networks, including state-owned
telecommunications giants like BSNL and MTNL and large private operators like
Bharti and Tata are using Tejas products to build their next-generation optical
networks. Since it is the OEM supplier to multiple global telecom equipment
companies, Tejas products have a significant number of international customers.

Innovation at Heart

This seven-year old company has come a long way. Tejas has dexterously
detected the pulse of the market and has catered to the same by matching product
development with a cycle time much less than its competitors.

"Unlike most telecom equipment companies, we chose specific
area of optical networking products and stuck to it with an innovative approach
from the very beginning. We have gone through two to three generations of
learnings," says Sanjay.

One of Tejas' key innovations is its business model. The
company decided to pursue OEM agreements with large telecommunications equipment
suppliers in Western Europe and the US. The larger suppliers fill out their
portfolios with Tejas' sophisticated technology while Tejas gains entry to
their customers without incurring the costs of building and maintaining a direct
sales force. This strategy coupled with lower expenses to develop products in
India has enabled Tejas to achieve profitability.

Tejas has a full portfolio of next-generation SDH/SONET
equipment from a 1U STM-1 CPE to a 20G wide-band Digital Cross-connect. It is
one of the first companies to deploy Ethernet-over-SDH/SONET (EoS) products
based on the latest ITU standards. "We are designing 45 nm chips while
others are still on 90-65 nm chips," says Arnob.

Elaborating on the strengths and future investments, Dr Kumar
says, "We are extremely focused on delivering on three core areas-new
breed of services like packet based Ethernet; higher capacity equipment going
beyond 2.5 Gbps towards 10 Gbps to enter metro Ethernet market, and data
services."

Its products have been noteworthy in helping its customers to
go-to-market early with shortened design cycles and saving cost considerably;
enabled simplified networks; and translated in saving service providers valuable
real estate with full-drop capabilities in each product that imply that there is
no need for expansion shelves in any application.

Next 'Cisco' in the Making?

"We would like to emulate Cisco for its organizational strength as a
technology leader-its innovation depth, strategic balance, and assimilating
capability of acquiring other companies in order to grow," says Nayak.
While the comparison between Cisco and Tejas Networks is pre-mature, the
potential of Tejas reaching those heights globally is not unthinkable.

Cisco has complete product lines in the home networking, optical
networking, security systems, storage area networking, and wireless technology
sectors, while Tejas has shown its strength in next-generation optical
networking products. Cisco's financials are off the chart with impressive
revenue of $33.47 bn. Tejas is only a small dot when compared to that but it
nurtures the same impressive quality about Cisco and that is—the ability to
keep growing.

Tejas Networks' revenue has grown by over five times in the
last two years. Sketching an aggressive roadmap for itself, Tejas plans to
double its revenue to Rs 400 crore in FY '08 from Rs 234 crore in the previous
fiscal. Exports, grew by over 200%.

Growing Prowess

With a strong R&D power, today one can't ignore the growing prowess of
Tejas' products in the SDH space in India. Tejas ploughs in almost 13% of its
overall revenue in R&D.

"Innovation runs like a fire in the belly for every Tejas
employee," says Siva Ramamoorthy, group director, Marketing, Tejas
Networks. "At Tejas we have been able to combine the best of Western values
like setting well defined processes, maintaining standards of quality, and
developing mature products with lot of Indian values like being able to react
fast, and being able to tolerate ambiguity much more than others," Siva
adds. The company currently has R&D centres in Bangalore and Mumbai and
plans to add more centres in Delhi and in the US.

"We are capable of being agile and scaling up as volumes
grow. The intention is to have a distributed organization. Competition outside
India will be fierce; it will be challenging to build our own brand despite
aligning with OEMs," says Arnob.

Despite its success the company has not lost sight of its
challenges. It needs to compete with the best in the market, and most
importantly build a brand that is recognized globally. Tejas has come across few
occasions where being an Indian product company has been a deterrent. As it goes
global, the nature and scale of challenges will be diverse. Scaling up fast to
be a services organization and attracting and retaining specialized workforce
will be key for its growth.

When asked if Tejas is ready to shed off its "emerging
company" image and claim the ground as a mature market leader, pat came a
unanimous response from the Tejas management, "We would like to continue to
be known as an 'emerging company'; one that is leading the change and keep
players guessing as to what is making them grow, so fast"

It's not difficult to see then that the 'tejas'
(Sanskrit word for brilliance) of these trendsetters will continue to be so just
as the spark of innovation that hit the team seven years ago.

Malovika Rao


malovikar@cybermedia.co.in