"An IT product company from India! You got to be kidding me," this would have been the standard response from anyone who heard about the idea back in the late 90s. By that time, Indian IT service companies had already made a name in the global IT scenario, but when it came to IT products; it was a very different situation. No one could believe that a good IT product can actually come from India. The perception was so strong that even Indian companies gave homegrown products the cold shoulder. Paradoxically, India had the necessary talent, cost arbitrage and other advantages, yet the country was unable to change its perception as a global IT services destination. Facing up to these bottlenecks, Hemal Patel decided to start his IT product company with a mission to build a global sales and distribution channel!

Patel knew the hurdles and the long wait time involved in building a product company from scratch. Yet, equipped with years of hands-on experience in several multi-million dollar IT projects and two previous entrepreneurial ventures, he was inspired to start a company that would forever change this perception. Thus, Elitecore Technologies was born in Ahmedabad. There are theories, experiences and books on the building blocks of a product company but achieving this feat from Ahmedabad, India became an art rather than science. The essentials of the art included the passion to achieve and strategic thinking in fighting market perception, building appropriate corporate culture, creating leaders and setting up internal processes.

Patel took three strategic calls: one, to maintain highest profitability compared to competition by allowing long project life; two, to build the company’s base in tier-2 or tier-3 locations to produce high performance products at lower cost; and third, initially not look for clients in the developed markets like U.S. or Europe, but focus on the emerging economies (which were called third world countries before 2004). These, in the course of time, proved to be a strong factor in the company’s success. Patel’s strategic thinking and passionate drive has enabled Elitecore to sell its products in 110+ countries and grow to become 700+ people organization. Innovation in every direction became the life-line of the company and "platform for innovators" became its vision.

Building culture and creating leadership

Patel knew that building the right corporate culture and creating leadership in Ahmedabad were among the initial problems that had to be overcome. Developing a product mindset requires drop ship thinking wherein the product design encompasses common defaults as part of a standard product; however, Indian culture adheres to a complete hand-holding mindset when it comes to evaluating any product. In a handholding culture, consumers expect their vendor to facilitate everything from product installation to training. To build a product company, the senior management must instill a collaborative and competent culture where management decision and accountabilities are de-centralized. Establishing corporate core values with vision, mission, goals and appropriate metrics which help create transparency and a performance-driven organization. Patel has demonstrated superb execution by emphasizing well-communicated strategies to the entire company.

Cultivating leaders has become new paradigm for building a product company from India, more so in a tier-3 city. Because, the aspiration level of employees is much easier to meet with a proper work culture, and giving them global exposure. Patel has focused on above average talented resources who are looking forward to exciting work opportunities and he treated them as friends and grooming them to become world-class leaders. Following the model of investing time in creating leader from such resources has inculcated in them a sense of seriousness.

Technology – The backbone

The experience Patel gathered while working in multiple networking related projects early in his career exposed him to newly unfolding opportunities in the networking arena. Thus, Elitecore started developing business-critical solutions for telecommunications, networks security and access gateway solutions. The realization that with technological advancements security threats would also increase, led the company to explore the network security market in greater depth and detail. Patel knew existing gaps in the market and the need for better products, and if he could tap into this vacuum, there would be enormous scope for success. So, a decision was struck to venture into the space of network security. Patel was very particular about the product that his company would create; he not only wanted it to be different from other products in the industry, but better and unique when compared to other products in the same segment and, thus, the flagship product Cyberoam was launched.

The Cyberoam suite of solutions provides end-to-end security needs of SMEs/SMBs. Since, most organizations do not have a very strong IT team to take care of their network security needs, Elitecore has ensured that their Cyberoam range of security products provides one box solution to address various business needs. For example, NEEPCO, a Government of India Enterprise with projects located in various states across the North East, was facing challenges due to unproductive and harmful surfing and was on the look-out for a solution that addressed this issue. The organization needed a firewall and an intrusion prevention solution to protect the network against intentional and unintentional intrusion attempts, and Denial of Service attacks. This is where NEEPCO found Elitecore and after examining its successful track record, decided to deploy Cyberoam’s identity-based unified threat management (UTM) appliance that offers comprehensive network security to enterprise, SME and SOHO clients. The solution suited the needs of NEEPCO perfectly. It offers a well-coordinated defence through tightly integrated best-of-breed security solutions over a single interface. Unlike most UTMs that only offer IP-address based security, Cyberoam offers user identity-based security, protecting enterprises from unpredictable, insider threats. The features of the product includes stateful inspection firewall, VPN, wireless security, gateway anti-virus and anti-spyware, HTTPS content visibility, gateway anti-spam, intrusion prevention system (IPS), content and application filtering, data leakage prevention, IM management and control, Layer 7 visibility, bandwidth management, multiple link management, 3G/WiMax modem support, IPv6 traffic forwarding support, traffic discovery, and integrated iView reporting.

Baccarat Crystal in France is an example of Cyberoam implementation in enterprises. Says Thierry Mengin, another satisfied customer of the company, "In the next phase, we intend to do away with the legacy firewall. We will now deploy multiple Cyberoam appliances in the Paris headquarters and configure high availability to avoid any failure. We intend to deploy multiple Cyberoam appliances in our boutiques, throughout the world. To us, Cyberoam is affordable security," Mangin is the Director of Information Systems at Baccarat Crystal, specialists in ingenious handcrafted works of crystal-ware for luxury products used in decoration, lighting, tableware and jewelry.

Today, Elitecore has extended its product suite range across network security, telecom and access gateway solutions to include Cyberoam iView, an open source logging and reporting solution that offers visibility into activities within the organization for high levels of security, data confidentiality and regulatory compliance; Cyberoam NetGenie to protect homes and SOHO, Crestel, a real time carrier-grade OSS BSS platform that enables next generation data, voice and video services over wire-line and wireless networks to manage and profit from application, media and communication services offered directly and through distribution channels; EliteAAA, an active mediation that can integrate with 3rd party rating and PPS (Prepaid server) for real time credit control and real time accounting; NetVertex, an industry compliant Next Generation dynamic policy manager that makes policy enforcement decisions real time, based on the services, applications, network resources, subscriber profile and SLA to ensure end-to-end QoS and bandwidth allocation; and 24online Access Gateway, a complete billing and bandwidth management solution that enables broadband, dialup, WiMAX and Wi-Fi service providers, hotels, hotspots and cafes to provide time and usage-based Internet access and manage subscribers and franchisees.

The technical capability and success of Elitecore products among the clients are evident from the numerous awards and recognitions that the company has been receiving in the last couple of years. Elitecore won the 5th National Telecom Award for innovation in turnkey solutions – OSS/BSS, finalist in PC Quest Best IT Implementation award, NASSCOM Innovation Award for Cyberoam’s Layer 8 Technology, 2009 Frost & Sullivan Price Performance Value Leadership award in OSS/BSS Software – Billing and Charging Solution Market, and many more. These recognitions validate the fact that the company has been able to create products that stand true to the ideals put forward by Patel Patel, creating products that are better than other products in the same segment. The quality of products provided has helped the company gain a healthy client base. Presently, with customers in sectors including telecom, ISP, BFSI Enterprises and Small offices, there are more than 20,000 Cyberoam deployments across the globe. Over 40 telecom operators and service providers presently use Elitecore OSS/BSS as their platform.

Co-existing in a healthy ecosystem

Patel’s vision was based on floating the idea of a “platform for innovators”, a strong channel to carry Indian products to the world and a company that makes profit. “Driving high profits was imperative. We could not afford to do just good if we wanted to establish ourselves in the product industry; we had to do exceptionally well. Lengthy projects demanded cash backup and so it was always necessary to stay cash positive,” says Patel. The strong vision, values and the culture of the company gave it the velocity that was needed to overcome the hurdles that turned up in its entire journey so far. The advantages such as financial and lifestyle benefits provided by a tier-2 city like Ahmedabad are enormous compared to a tier-1 city like Bangalore or Mumbai. This outweighing any other drawbacks, a fact that compelled Patel to make Ahmedabad the centre of operations for Elitecore Technologies.

A major factor of success for any product company is its healthy partner ecosystem. Most product companies are partner-dependent because partners are a key element in the distribution and interface between the end users and other principals. Patel spent a major chunk of his time during the initial years to build an appropriate partner ecosystem. He personally travelled around the world to meet each and every existing and potential partner for the company. His objective was to ensure that the company was able to connect with the right partners who can be resourceful. Once selected, the company provides them free training, and guides them until they are comfortable with their role. Patel knew that whatever success they attained is the result of a collaborative effort and the part played by partners is very substantial. So, the company never fails to share its success with its partners; while giants in the industry pay as little as 5 percent to their partners, Elitecore rewards them with with margins as high as 35 per cent, enabling them to grow along with the company. Today, Elitecore has about 70 partners, 3000 resellers and a sales network in around 110 countries around the world.

Outpacing Challenges

From 10 employees in 1999 to around a 700 employee-strong organization today, the growth of Elitecore has been rather fast, especially considering the fact that it is a product company based out of India. In the initial years, a lot had to be done to change the perception of Indian product companies, both in the domestic market and overseas. Not even Indian companies or Indian government bodies were initially ready to accept the fact that a great product company could come from India. Only through investing time and effort in developing compelling technologies and innovative products, Elitecore as a company managed to break free from its perception-cocoon.

The company was making profits, but to grow and expand further, it needed additional funding. Approaching VCs in India was slightly tough for Patel as he is an NRI and they had doubts about his extent of involvement in the day-to-day affairs of the company. It was rather tough for him to convince an Indian VC that he would stick with the company and not close the shutters one day. And, since the company was not focusing on the U.S. or European markets, the VCs had their share of doubts on both the product development capabilities of an Indian company and its success in new markets. This was a major challenge that the company faced during its formative years. "By 2005 this started to change. More and more U.S. based venture capitalists were interested in investing in companies that had a strong focus on emerging markets. A lot of interested investors came and we could afford to become very choosy; we wanted no one but the best to partner us. So in 2006 and 2007, we got equity funding from the Carlyle Group," says Patel. Getting funded by such a big global private equity firm brought a huge amount of credibility to Elitecore among its customers and on the industry as a whole.

After a setback caused by the 2008 global recession, the Indian IT industry is coming back to its normal self. The industry has been shaken to the core and the recession caused a lot of business and policy changes. Now many companies were beginning to look at markets other than the U.S. and Europe. They underwent this mindset perception as they have realized how recession-prone the so called developed markets can be, and Patel's vision to focus on the emerging markets right since day one paid off very well. While other players in this segment were out of their wits in trying to salvage their market cap, Elitecore was enjoying a smooth journey ahead because of its unique emerging market model. This early realization that breaking into the U.S. market is going to be a horrendous task for an Indian product company prompted Patel to instead concentrate on emerging economies, thus, helping the company establish itself as a prominent product development company. It also shielded the company during the recession.

Hiring, training and employee development

Being a veteran entrepreneur, Patel was well aware of the importance of hiring the right people. Initially, the company showed interest in top scorers from some of the most prestigious institutions of the country, but these students were only interested in elite multinational organizations in tier 1 cities. This compelled the company to do a strategic rethink about its hiring strategy which meant it had to start focusing more on mid-level but hardworking students who had a passion to learn and succeed. The company management realized early on that building an ambitious company is not about getting an employee with higher grades, but more about finding a person who can fit rightly into the company’s corporate atmosphere. To get the right person, they devised an intensive selection process, evaluating employees not only for their technical skills but also the overall psyche of the interviewee. Elitecore has made it a point not to hire anyone about whom they are not 100 percent sure

It is not just enough to hire the right person for the company, it is equally important to make sure that this person will stick with the company for a long time. Attrition is a major issue that has been slowing down company’s growth momentum. High attrition rates not only leaves companies drained of talent but also puts serious financial burdens on them, in the form of hiring, training and acclimatization of employees to a new atmosphere. Elitecore has built a corporate environment which keeps in mind the comfort and satisfaction of its employees. The company maintains an open-door policy and remains a performance-driven organization, as opposed to a seniority-driven organization. This strategy has worked wonders so far, most of its employees still remain with the company. Furthermore, around 200 employees have remained with the company for the last eight years. All these trends strongly suggest that the company’s employee engagement model has worked well over the years.

It is imperative to have a well-qualified talent pool at your disposal, more so when you are a direct product company. The company provides all its employees with quality training; still it makes a world of difference if the prospective employees already come well-trained in the relevant trade. In order to make this happen, Elitecore has developed industry-academia tie-ups with certain colleges and universities in the state. With the introduction of new curriculum in these colleges, the company hopes to create a well-established and settled talent pool in Ahmedabad itself. Apart from this fact, the company also collaborates with colleges in London, Morocco, and Vietnam, and has introduced Cyberoam security courses across these institutions. Presently, there are more than 5000 engineers globally who are trained and certified in Cyberoam Security.

India embraces a handholding culture which does not gel well with the rest of the world, which runs on the drop ship model. “We had to instill this culture within the organization. This was a major thing that I had to do without fail in my first few years of building the company. Now it is just part of the company’s DNA,” says Patel.

The end product

The world as we knew became a very different place with the invasion of all the mobile devices, and now with the increasing popularity of 3G and high speed internet, it is becoming clear that mobile technologies are the order of the future. Along with this, there has been a rapid evolution in the world of security threats as well. Elitecore is considering this to be a new avenue of opportunity for the company and has already come with a solution for the market. Net Genie is a newly launched security appliance for home users which provides firewall, antivirus, and parental control. This can be deployed to secure and manage a multitude of products including the much popular iPad. Being one of the first players to provide such a solution in this particular market, the company is already getting favorable responses. Patel is expecting about $20 million in revenues from this product in India alone. The company has huge plans for the future. Patel is already thinking about floating an Initial Public Offering, which according to him, will happen as soon as the company reaches $100 million in profitable revenue. At the pace the company is growing presently, this will be attained in the next two to three years.

Building a successful company is all about getting the right mix and a formula which worked right. Without doubt, it is clear that Hemal Patel has hit off rightly with Elitecore. The company has a great technology, a highly effective business model, resourceful partners, and very talented employees who gel well with the organizational culture. All these things came together and created the magic, the magic that has constituted to and is visible in the success of the company so far. Since the company has got its formula right, there is no doubt that it will continue along its growth path of success.