India - The Dynamic Duo

The Dynamic Duo

By Sonal Desai

Vardhaman Technology has established itself as a company with significant engineering capabilities to design, research, and develop new computing products and appliances. Thus far, the system builder has developed products ranging from digital signage systems, small-form-factor (SFF) PCs, thinner-than-iPad tablets, thin clients, application-driven kiosks and point-of-sale (POS) devices.

“The products we have developed have been acknowledged among the first and the best engineered products globally by Intel. Our tablet is the first Atom-based tablet and is thinner than even the iPad. We are among the leading white-box players in the digital signage market and ventured into the SFF PC segment long before components were available in the distribution market in the country,” says a proud Amit Rambhia, Director, Vardhaman.

Garage start-up

In 1993, fresh out of engineering college, Amit started assembling PCs from a garage. Although his younger brother, Nikit, was still studying at that time, he emerged as a formidable partner in the business venture’s success. He assisted Amit in assembling PCs. “For the first couple of years, we assembled PCs by taking advanced money to buy the components,” recalls Amit.

As the PC assembling business grew, the brothers hoped to rake in more money and grow their business further. “By 1999 we were doing a sizeable business, assembling 40-50 desktops a month. We had a good team in place. Services revenue had started flowing in as we had a large installed base by then. But we weren’t happy as we were doing what most other assemblers were doing. We had no clear differentiation,” says Nikit.

It was then that the two brothers began debating on what to do next. “We decided to innovate with the products we were assembling. To give us a significant product differentiation, we decided to design a SFF PC by using micro ATX components—which were not easily available in the Indian market,” informs Amit.

After testing the new design, the company rolled out its first SFF PC in 2000, and along launched Vardhaman

Technology as a private limited venture. “To create self-engineered products, we had to organize our business. We could no longer run as an assembler, as we had to deal with international component suppliers. Intel helped us a great deal in the process,” Nikit says.

The SFF PC was an instant hit, as within months of launching it the company bagged its first order from the banking sector. “Initially, we started by supplying units to ICICI, HDFC and Kotak,” informs Amit.

Impressed with the SFF PC, several white-box manufacturers started inquiring if Vardhaman could supply them PCs to be sold under their own brand names. “We said why not. It would give us more economies of scale, and this would help us source components better. So we began assembling SFF PCs for third-party assemblers,” says Amit.

In 2004, the company innovated again to come up with a Micro PC which was half the size of their SFF design. In 2005, impressed with Vardhaman’s engineering capabilities and assembling capacity, Gigabyte inked a deal for thin clients for the Indian market. While the partnership doesn’t exist any longer, it gave Vardhaman another avenue for growth—thin clients. “The relationship with Gigabyte helped us in bagging other contract manufacturing deals from regional and local PC players,” states Nikit.

Today, Vardhaman has two units—one at Daman and other at Bhiwandi—where it assembles its own brand of computing products and does contract manufacturing for others. It has a total assembling capacity of 30,000 units per year. Vardhaman plans to expand the unit at Bhiwandi which will take the total capacity to 5 lakh units per year.

Business operations

Over the past three years, Vardhaman has reorganized its operations significantly to augment its business. In 2007, it launched a company called Panache as a sales, marketing and distribution arm for its white-box computing products.
Last year, it set up a company called Aditya Technologies for providing R&D and consulting services for designing and engineering of PC and appliances.

Explaining the rationale, Amit says,
“The reorganization allows us to concentrate on our strengths in a more focused way. Vardhaman is the manufacturing arm assembling our own brand of products as well as custom products for other vendors. Panache is the brand we sell all our products under, and it will be responsible for driving this business.”

“As for Aditya, we believe we can leverage our experience accumulated the years to offer consultancy services for designing and engineering of new computing appliances,” he adds

Overall turnover of all three companies stood at `16 crore in FY2009-10. Of this, Panache contributed `4 crore, and contract manufacturing contributed `12 crore. Of its Panache business, 40 percent came from selling SFF PCs, thin clients contributed 30 percent, digital signage added 20 percent, and POS terminals garnered the remaining 10 percent.

Over the last 12-18 months Vardhaman has seen many large projects come its way.

It helped SBI replace 2,000 desktops with thin clients operating on Windows XP. It supplied 1,500 thin client units to a company called Nivio, which offers virtual desktop computing services on the cloud. It deployed 3,000 PC-based kiosks for IL&FS’ education initiative called Gyan Community PC. These kiosks were designed with a built-in projector and other multimedia features.

Vardhaman also designed and supplied 3,000 units of POS terminals to a lottery company for deployment across Maharashtra. It worked with an ISV to provide a complete thin client-based solution to Taj Group for their interactive TV systems in hotel rooms.
Presently, it is deploying 200 kiosks to a dairy in Kolhapur. “Since the terminals will be placed in rural areas of Maharashtra, they needed rugged PCs. After completing this project, we are confident of getting similar orders from other dairies,” avers Nikit.

Future plans
Both brothers are brimming with new ideas for the future. The focus is clearly on launching new category products and enhancing the Panache business. “At Panache we are creating two separate teams—one focused on solutions and services, while the other focused on retailing of our branded products,” informs Nikit.

“Barring one Panache outlet, we closed all the others during recession.

However, with markets looking up, we plan to revive our retail strategy. We will roll out 50 new Panache outlets in the next couple of years across B, C, and D class cities,” informs Amit.
One of the most awaited product from the Panache stable is its tablet called Slate. Based on Atom and Windows 7, the tablet is ready for rollout this November. “Festive season is a great time. We have put in place a three pronged sales strategy—online portals, partnering with large telcos and retail. The pricing will start at `25,000 and hi-end tablets will be retailed for `50,000,” explains Nikit.

Both brothers expect the next five years to be the best years for the company as products like thin client, digital signage, tablet, SFF PC and POS solution will be in great demand going forward. However, to leverage these opportunities they believe that they will have to take a more application-driven approach.

The company is already working with technology partners on developing newer digital signage applications “We have prototyped a solution to provide passenger information system on trains and are working to create kiosks at bus stops that provide commuters, information about the bus arrivals, route maps, neighborhood cafés and bookshops, etc,” explains Amit.
In the meanwhile, Aditya has completed a consultancy project for interactive TV system for AC buses run by BEST in Mumbai. It is working on a consulting project in the e-learning space. And to fuel this expansion, Vardhaman is expanding OEM partners. “We want to work closely with many application vendors—like Scala, Ryac for digital signage, POS Software for POS, Citrix and VMware for thin clients, and local ISVs who have vertical specific applications,” informs Nikit.

While Amit takes care of technology, OEM relations, and branding and marketing.
Nikit is incharge of purchase, procurement and channel sales.

Both brothers have the same role model. “Our inspiration is Steve Jobs. We want to develop cult products like iPod, iPhone and iPad, and take it to the world.” says Nikit.