LINUX For You magazine, Asia’s first magazine on Linux and Open Source, featured Keen & Able under the editorial banner of “Open Source Success Stories”. We reproduce the editorial piece that was published in July 2010 issue of the magazine, unedited, here:
A Delhi Firm Proves that Open Source Rocks!
By: Vanisha Joseph
Everyone ‘knew’ the world was flat — till Copernicus and Galileo challenged this perception and introduced a new reality. People’s initial reaction to the idea of a spherical-shaped Earth was ridicule and hostility. It’s a similar situation for companies centred around open source; they constantly battle the common perception that their’s is an unviable business model. This exists despite stellar successes like Caldera and Red Hat.
Delhi-headquartered Keen and Able Computers (K&A), a leading Indian open source solutions provider, similarly trumpets the message that you can make money in the open source area! Growing at the rate of more than 20 per cent, year-on-year, the firm has an annual turnover of over Rs 30 million. A services business model combining training, consulting, customisation and deployment of open source products, along with support/maintenance, has helped K&A attain this stellar growth and profitability.
“Profitability in the technology business isn’t dependent on whether you are in the proprietary or open source domain. There are numerous examples of proprietary software-based companies running into losses. Profitability is dependant on your business model, systems/solutions, ability to plan, execute the plan, and to market yourself. Open source service was the opportunity for us, and we built a strong business model around it,” says Varad Gupta, CTO and founder, Keen and Able Computers.
The encounter with open source
In 1996, Gupta and four avid programmers who were determined to write their own software, laid the cornerstone for Keen and Able Computers. However, they soon ran into stormy weather — without enough orders for software, they had to take the plunge into services in order to survive. It was then that they encountered open source, and embraced it enthusiastically. “Around 1997-98, Linux happened. We saw open source and realised this was it — something with no constraints. We never believed in the one-size-fits-all theory. There are best practices, but apart from that, every culture or organisation is different, demanding a specific solution. Open source was our key to provide these specific solutions. Its flexibility with respect to customisation made us adopt it — and ever since, we have never had to say ‘No’ to a customer,” says Gupta, who by then was the core of Keen and Able, his comrades having left in search of greener pastures.
The initial open source solutions Keen and Able offered were based on a mail server stack. Back then, in the early days of e-mail and the Internet in India, most organisations used Sprint Mail and a DOS-based terminal with a dial-up Internet connection. Thus, winning the first few clients was not easy. A mixed strategy of approaching existing clients, and selling a complete and cost-effective solution matching the customer’s requirements, helped the young firm bag the first few deals. “By the time we had plunged into open source, we had built a significant client base on hardware and troubleshooting. One of our existing clients in manufacturing had obtained an e-mail ID. I told him that we could share this address with all his 250 employees; each could write and send out their own mail, and when the reply came, it would be routed to them directly. I told him the solution would be built on Linux. He was sceptical about Linux, but being an existing client, he had faith in us. We did a proof of concept (POC) for him; after the solution was configured and tested, he just loved it. This was the first open source deal we cracked. Thereafter, we went on to provide mail servers on a Linux platform to many organisations such as BHEL, Duncans Industries, Kribhco Shyam Fertilisers, Religare Securities, ISGEC, JK Technosoft, and many more” says Gupta.
With nothing changing for the end-user, who continued to use Outlook Express, acceptance of these mail solutions grew. Soon, Keen and Able came across a huge opportunity that consolidated its position in the open source realm. Around 2003, the firm deployed SAP on Linux in a cluster environment—for the first time in India. “Open source is like a new sweet that most people are hesitant to try out — but once they experience the robustness, flexibility and cost-effectiveness of the solutions, they automatically get addicted to it. This is what happened with a client for whom we created history by deploying its mission-critical application on Linux in a cluster environment. After savouring the sweet taste of success with file servers, mail servers, proxy servers, firewalls and other solutions on open source, our client wanted to shift SAP, its mission-critical application, onto Linux in a cluster environment.
“While deploying the solution, the implementers got stuck at the clustering phase, so our client invited us to take on the challenge. After understanding SAP and the cluster environment over 15 days, we began work, and soon deployed the solution successfully. This won us accolades for our delivery and customisation abilities for open source-based solutions, and led to the initiation of a fruitful partnership with Red Hat,” says Gupta. Eventually, Keen and Able got many customers like IndiaBulls, ESPN/Star Sports and Sheela Foam to run their mission-critical applications on open source, and truly enjoy its benefits.
But how lucrative were these open source-based offerings for K&A? The business model it adopted was that of a ‘support seller’, wherein it did not charge for the (open source) software itself, but charged for custom development and support (maintenance and server support) services. Just by providing Linux support and customised solutions, Keen and Able generated a business of Rs 1 million per annum initially, amounting to as much as 20 per cent of its business. The path, however, wasn’t free of hurdles. “We struggled for the first 3 to 4 years. Building a dedicated team to sell the solutions, and exploring what we would do and deliver, were some of the initial challenges we faced,” says Gupta. The addition of training services and diversification of the business a few years later helped mitigate some of the problems.
Strengthening business roots
With time, there arose the need to expand the range of solutions on offer, and to create a more holistic business model. Keen and Able went beyond maintenance services, which today constitute only 15 per cent of its revenue, and provided ready-to-implement projects, solutions around network security and servers, and even corporate training. “We developed software for the various requirements of different customers, and not for only infrastructure deployment as in our initial days. Today, we are into development, training and consulting activities,” says Gupta. About 50 per cent of the firm’s revenue comes from consulting, customisation and deployment of open source products.
Keen and Able also built a good business around training, which it ventured into in 2006, after facing a severe shortage of skilled people. What started as a cost centre became a profit centre in about two years. “Entering into training happened due to our personal experience of not being able to find suitable talent. We saw a huge gap between certified professionals and professionals who had learnt by themselves. We felt the need for formal training to fill this gap. Thus, we looked at Red Hat certification. Initially, we got about 10-15 of our own professionals trained. Soon we realised that we had a large talent pool with not just bookish knowledge, but on-site experience, and decided to venture into imparting training,” says GuptaToday, as much as 35 per cent of Keen and Able’s revenue comes from its training arm, FOSTERing Linux.
In parallel, the firm’s strategy to reach out to new customers also evolved over time. It followed a twin strategy of getting customers talking to customers, and starting small to build confidence in new customers. “‘Customers talking to customers’ works much better than ‘vendor talk’. We get a new customer to talk to an existing customer with similar requirements, to build confidence in us—and until date, it has worked very well for us. We also advise our customers to start small, try our PoC (proof of concept), and then go into it in full swing,” says Gupta.
Despite a mature business model and selling strategy, obstacles remained. While entering into training did provide a vast talent pool for Keen and Able and helped resolve the early talent crunch, finding the right kind of professionals still remains a problem. “A major challenge today is to find professionals with the right aptitude, or ‘open-sourceness’ as I call it. The attitude of learning about open source just for a good job doesn’t work for us, or for any open source vendor. We need people who cannot accept ‘No’ as an answer to a problem. Such people are in short supply. We have some, but need many more to reach the zenith,” says Gupta.
A peep into the future!
Looking ahead, Keen and Able hopes to come out with its own open source product to contribute back to the community. “We have been working on a diverse range of solutions over the years, and shall soon productise them. Plans have already been made. We just have to get the team together, package the product and it will be ready for consumption,” says Gupta. “In the future, we also hope to explore untouched domains in open source, and address the issues prevalent there. We have set a growth target of 100 per cent this year, and are already on the right track towards achieving it,” adds Gupta. Keen and Able sees tremendous opportunities in the government, ithe embedded devices domain and in the SME sector. It also sees a lot of potential in the Android and Maemo platforms. “For companies like us, open source is the way ahead, as it brings down the initial capital expenditure and the resultant set-up costs,” says Gupta.
So, do not be reluctant to explore the opportunities open source offers adventurous start-ups. Keen and Able Computers has shown that there’s a whole open world out there, waiting to be tapped.