Let’s say you’ve been facing this problem since a long time. Your employees have complained enough of the Internet connection’s inability to handle huge file transfers, and you have decided to apply for another leased line connection. Despite the immense funds-crunch, you have managed, barely, to ready a cheque for the same…when, hold on, you realize that all the people in the office don’t need the same bandwidth. There are only a few who access the web for the mammoth file transfers; others just use it to check mails, and could make do with lower speeds. So if you could divert the excess bandwidth and speed from their end to the former’s…

MROTEK’s bandwidth manager looks to capture the market putting the same thought into action. The company that started as a reselling agency today manufactures networking products for the emerging markets, and is currently in negotiations with one of the country’s top telecom service providers for deploying its products with their connections.

Since the inception of its R&D facility in 2004, the company has commercialized five products that include, apart from the bandwidth manager, Fast Ethernet Media Converter and Ethernet Powered Switch.

Its first product though came back in 1998, when CMD Sarangan Narayanan sensed the need for a line drawer, architected the same and took the idea to HCL. “They liked it immensely and ordered 100 line drawers right away,” he recalls. During those days, third party selling still formed a major part of MROTEK’s business. Buoyed by the success of RAD products, of which MROTEK was the distributor, and the latter’s own line drawers, Narayanan decided to set up a manufacturing plant in a joint-venture with RAD. The effort fetched dividends; the period between 1998 and 2000 saw the company’s revenues increase from Rs.25 crore to Rs.100 crore. But with the historic slowdown in 2000, returns took a nosedive. Had the investment, that had gone into setting up a manufacturing plant been invested for the establishment of an R&D facility, the events could’ve panned out quite differently.

Agrees Narayanan: “We could’ve become a Rs.500 crore company by now…”

Despite a $1million VC finding and an IPO, the growth of the networking products company has been, at best, arrested. With annual revenue to the tune of Rs.140 crore, it is nowhere near its rivals’ stature.

“Neither do we want to be there,” counters Narayanan. If CISCO is the water-tank of the networking space, MROTEK’s focus lies on being the pipeline. That in itself is a Rs. 1000 crore market, he says. Incidentally, this pipeline aspiration was born out of market dynamics. When Narayanan saw behemoths Cisco and Huawei capture the market his company was addressing before his own eyes, he realized that without Government support, MROTEK did not have either the muscle or the acumen to take them head-on. Resultantly, he looked at tapping into areas they did not address.

In accordance, the company hasn’t engineered a router or a modem. Instead, it has focused on products like Cycus. One its more recent releases, Cycus enables building high capacity networks at lower costs using Coarse Wavelength Division Multiplexing (CWDM) technologies. The passive optical product can increase the capacity of a fiber pair up to 40 Gbps.

Outward bound
MROTEK is looking to capture global market, and is in fact, going for the Japanese market in a big way. “We can sell our products at a 60-70 percent margin there as opposed to the barley 30 percent margin here,” explains Narayanan of the rationale behind being outward bound.

The company though hasn’t been able to break the price barrier in the domestic market as yet. While MROTEK manufactured modems cost Rs. 1000, Huawei sell theirs at a throwaway price of Rs. 449. “The manufacturing cost of a modem is around Rs. 640, and it is the same for Huawei,” counters Narayanan. Yet, they are able to sell it at that price owing to the subsidies they enjoy from the Chinese government. “The Indian government, on the other hand, is too busy handing out sops to the services sector.” Is the hardware policy, then, of no help?

“What hardware policy?” he demands. “In my efforts to build this company, I have spent more time in the banks than in the actual efforts. Had there been a little support from the establishment, we could’ve grown to become India’s Cisco.”

Giving in to gut
Narayanan’s sojourn of setting up and running his organization would qualify in the rule-book as one of trusting the gut-feeling. He quit a Sub Lieutenant’s position in the Navy, walked out of a full-time R&D job in BPL and moved out of his hometown in a bid to grow up. “Life in the navy, and then in BPL was too easy. Besides, I realized that unless I got out, I would never develop the survival instinct.”

Weighed by family compulsions—the Rs.300 he’d promised to send home every month would feed his ten siblings—he started the Market Research Organization with his friend and the current MD of MROTEK Himadri Nandi.

Though Narayanan had given in to the entrepreneurial bug, he didn’t have an idea as to what would fetch him the essential Rs.300. Desperate for a deal, he decided to try the re-selling route, but wasn’t quite sure where the investment would come from. Hopeful, and by a certain standard outrageous, he decided to undertake a journey to Indore, to tap into an oscilloscope manufacturer he knew from his BPL days. “It was a morning-in-night-out plan since I didn’t even have money to pay for a lodge,” he recalls. So impressed was the manufacturer with Narayanan’s integrity that he offered the first few pieces free of cost, and persevered with the entrepreneur for nine long months till the first success came through.

Business was growing at a profit margin of 30 percent, but Narayanan’s appetite was far from satiated. A flippant browsing of the RAD product catalogue raised his interest, and he wrote to the company’s management in Israel for getting a reseller license. “Those days we did not even have a diplomatic relationship with Israel,” he recalls. Rejections notwithstanding, he wrote to them repeatedly; when relations between the countries thawed, one of the heads of RAD called him to London for a meeting. “He didn’t expect me to go in the first place,” he says. Narayanan pooled in money once again, and not knowing whether the deal would come through, flew across the seas.

Once again, the events played to his liking. “The RAD management was impressed with my perseverance, and we bagged the license to sell their products,” he says.

Today, with MROTEK—the TEK incidentally was added to the name after it started making its own products—having actually turned into Money Revolving Organisation, Narayanan has his sights on notching up an annual revenue of Rs. 500 crore in the next two years.

“Ironically though, when you achieve your ambitions, you don’t know how to handle them,” he says philosophically. “For example, in the exuberance of my youth, I used to think that I’d drink the whole day if I had money. And now that I have, I just can’t…”