Anunta Technology Management Services, a Mumbai-based cloud startup that offers applications delivery as a service (ADaaS), has spent most of the past two years evolving its own identity. The company started out in early 2010 as a spin-out subsidiary of BSE-listed BPO company Firstsource Solutions and became an independent entity only last year. In February, Anunta raised an undisclosed sum in a Series A round of funding from Bessemer Venture Partners (BVP) and is now readying to play the emerging ADaaS market, both in India and overseas. We recently chatted with Anunta’s founders, Ananda Mukerji and Sanjiv Dalal, at the company’s offices in Mumbai (it still works out of Firstsource’s premises). Mukerji was earlier the founding CEO of Firstsource (he is still on board as executive vice chairman) while Dalal, earlier CTO at Firstsource, is also a serial entrepreneur.
Edited excerpts from the chat:
1. Tell us how Anunta was conceptualized.
Mukerji: Anunta, as you know, started out as a subsidiary of Firstsource. We were (at Firstsource) one of the very early adopters of virtualization in the BPO industry, as far back as 2006. Most BPOs own the network and infrastructure used to deliver services to clients. But applications, whether desktop or mobile, sit at the client end. So if an application is down it becomes difficult to control. When we started looking for ways to deliver applications in a predictable manner, we realized that nobody offered this as a service. We therefore had to become experts in doing so ourselves. That is how the ADaaS (application delivery as a service) offering was born.
Around April or June 2010, we decided that we should start offering it to the larger market as a separate service. The ADaaS division was spun out into a separate company, as a 100 per cent subsidiary of Firstsource. Sanjiv (Sanjiv Dalal), who led technology development at Firstsource, joined the new entity, Anunta, as its CEO. All this happened just before I stepped down as CEO of Firstsource.
2. What led to Anunta becoming independent of Firstsource?
Mukerji: When we started out, Anunta largely catered to the captive needs of Firstsource. We started going out into the market for third-party contracts around the middle of 2011. Around this time, Rajesh (Firstsource managing director and CEO Rajesh Subramaniam) said that it was becoming difficult for the company to sustain Anunta as a separate entity and they were considering merging it back with Firstsource. Around that time, we started talking to Firstsource to buy out Anunta. Negotiations took about six months. We were given an extended period to pay back and finally became independent some time in the middle of 2012.
3. Sanjiv, this is your third startup. How is this one different?
Dalal: Well my first company (Mumbai-based CRM software company Zyfax) was in software development. I was developing software but didn’t actually get an opportunity to see its impact. With my second company (Dalal was a founder and CTO Bangalore-based BPO CustomerAsset, which later merged with Firstsource) I got to manage the way software was used. With Anunta, I am back to technology development. But here I am both building and managing the software at the client end.
4. Tell us about Anunta’s AdaaS offering. What happens post-funding?
Dalal: Initially we started with the premise that we were delivering a tool to the customer. But now we are moving towards a platform-based offering. This platform should enable the client to do a few things in an integrated, seamless fashion. First, the client should be able to measure the performance of applications. Second, that performance needs to be correlated to the performance of individual devices. Third, the client should be able to monitor changes required on the shared infrastructure. Then, the platform should be able to map devices to customers and finally it should offer interactive tools for clients. The objective is to automate the entire process to the extent possible and we’re developing the entire platform in-house.
5. Who would be your competitors?
Mukerji: There’s almost nobody that offers applications delivery on the cloud as an integrated solution. But we would compete with several kinds of players on different aspects of the business. There’s an element of consulting to our business and then there’s systems integration. In a sense we would be competing with the big boys in the software services business that offer some part of the overall offering that we bring to the market. This is why the platform is critical to differentiate. (One of Anunta’s competitors will be Milpitas-based startup Aryaka Networks, which launched its ADaaS offering last October. Aryaka has development operations in Bangalore).
6. Talk us through your target markets, both in terms of geography and verticals.
Mukerji: This is a product that can be used anywhere. We currently have four customers in India, including Firstsource. As of now we are very focused on the India market. However, we will now start building out a presence in the US and UK markets. We will need a substantial presence in those markets and are exploring local partnerships. In terms of verticals, any sector where applications change very frequently and has large mobile workforces would be a target market. So we’re talking about BFSI (banking and financial services), retail, manufacturing, BPOs, logistics, education and even pharmaceuticals.
7. How are sales cycles in this niche different from traditional software services?
Mukerji: It’s a new concept, so sales cycles are relatively longer. We’re trying to ride a new wave, desktop virtualization. The current market penetration levels are at 2 per cent and this is expected to grow to 8 per cent in the next 4-5 years. But people will use this tool. People have seen virtualization work in data centers. Desktop virtualization will also gain momentum.
8. How did the association with BVP come about?
Mukerji: We started exploring the market for investors around August or September last year. There was no formal mandate. These were just informal meetings through references and friends. We met with about 6-8 investors. They were all interested. We were introduced to BVP in much the same way. At the first meeting itself they took to the whiteboard and started carving out the space. They instantly got the concept. It was clear that they knew this space. We were looking to raise funds but more than that we were looking for an investor who had established relationships in this market. For instance, BVP’s relationships will be very useful when we start building out our presence in the US.
9. Apart from investing in the platform, what else will you spend the money on?
Mukerji: We need our own office! We’re looking around for one. We’ve been operating with no human resources or finance people. So we need to get those functions in place. We’ll be pushing into sales and marketing very aggressively now, both in India and overseas. The headcount will increase. We’re currently at about 70-odd people across Mumbai, Chennai and Bangalore. But, it will never be a very headcount-heavy operation. The maximum headcount will probably be capped at 500-600 people.
10. How long before you will need to raise funds again?
Mukerji: We’re good for 18-24 months with the current round of funding.