Vendors Pulled A fast One

Jetage Computers was a leading distributor of Canon and Philips in Chandigarh till 2004. But later it had to bid adieu to these principals due to disagreements over business practices. At the end of it all, Jetage was poorer by Rs 15 to 20 lakh.

Sanjay Walia of Jetage Computers claimed that these events came about because Canon had unjustified policies compelling its partners to sell below cost price. Moreover, the vendor had blocked Jetage's backend incentives for almost eight months and this amounted to Rs 5 lakh.

SANJAY WALIA Jetage Computer Chandigarh

Walia tried his best to recover these funds from Canon. He even requested eSys India, a Canon distributor, to resolve the issue but he claims that he did not get any support.

That very year things also started souring between Jetage and Philips. As part of an incentive package, the vendor was to take Walia to Australia but it refused to do so. “I then asked them to give me cash against this incentive scheme, but this too was rejected,” he rued. These two incidents led Walia to suffer a loss of Rs 15 to 20 lakh and he has not been able to recover it till date.

However, he decided to move on and over time signed up partnerships with two more leading brands-Viewsonic and Microsoft. This gave Jetage a safe harbor and soon he was able to recoup his business. Today the company's turnover is over Rs 5 crore. With 10 people on his payroll, Walia is now trying to get more channel partners in his fold and tap the retail segment as well.

Coming back stronger

Alok Gupta had prepared himself for most business contingencies. But he had not made any provisions for terrorist attacks to impede his business. And this is precisely what happened.

When the Al Qaeda bombed the Twin Towers in New York on September 9, Gupta's business was also hit. He had made huge capital investments in creating infrastructure for his software business. But after the 9/11 bombing, the stock markets were in a tizzy and recession set in.

ALOK GUPTA Samtech Infonet New Delhi

“The recession caused a great setback to my business and I could not get access to the US market. We had offices in US and Europe and 80 percent of our business was coming from them. Whatever investment we made suffered huge loss and we could not regain it,” said Gupta.

With business being hit, Samtech's business registered a big drop and turnover was reduced to half. Gupta had to shutdown his business in the foreign markets and concentrate entirely on the Indian market. Over time, he has gained ground by working on software designed for the Indian government and bagged some good contracts.

Today, Samtech's turnover is around Rs 12 crore and it has around 200 people on its rosters. This is no mean comeback for a company, which was as good as wiped out just five years ago.

Changing Strategies To reach Higher

Computek India started with providing hardware maintenance and support like installing or configuring computers, printers, file servers, web servers, or other hardware to its clients.

SHASHANK SHAH Computek India Bangalore

Additionally the company also provided comprehensive networking solutions that included entry level LAN. During the mid 90's, like many other players in the arena, Computek too faced problems of shrinking margins and higher overheads especially since they were not in a level playing field and faced huge problems from the gray market.

The result was a slow down in business. Recalled Shashank M Shah about the situation, “We realized the only way to survive was to grow big. Unfortunately at the time when no bank funding was coming our way, the only route to grow better was by changing our strategy.”

A strategy change was exactly what Computek undertook. Shah and his brother Sunil decided that they would increase focus on software products. Their determination and hard work paid off. “From mere box selling, we have today become a solutions company with a growing installation base in government, educational institutions, banks, PSUs, defense, corporate and SOHO segments,” Shah claimed. Today the company has a team of 22 people and a turnover of about Rs 10 crore.

VINITA BHATIA
With inputs from Piyali Guha in Kolkata, Amrita Tejasvi in New Delhi and Subbalakshmi BM in Bangalore

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