Hardware start-up breaks even

Tejas Networks, an Indian start-up in the latest generation optical networking products for telecommunication infrastructure, has made history by achieving virtual cash breakeven in its third year of operations (2002-03) at a time of severe global slowdown and falling prices.

"This puts us ahead of any other similar start-up in the world in our time," says Sanjay Nayak, CEO of Tejas Networks.

The company expected its turnover to grow at least two and a half times to Rs 70 crore (Rs 700 million) in 2003-04 from Rs 28 crore (Rs 280 million) in 2002-03, he said.

"Tejas proves that Indian companies can move up the value chain in globally competitive products," adds Nayak.

The company has been able to devise new generation and practical products at low prices. What makes it special is it has made a success of its cutting-edge proprietary products in the face of global competition by leveraging Indian infotech skills in designing complex ASICS chips and systems.

Tejas' customers include domestic firms like Hughes Telecom, Reliance and Tata Teleservices, and foreign firms like CNC, China's third largest carrier, and Hitron of Taiwan.

Its products are undergoing laboratory trials with original equipment manufacturers and service providers in the US.

The products designed by Tejas are loaded with its own software, while their actual manufacturing is contracted out to firms like Flextronics.

Tejas sells its products both on its own and through OEM vendors. Its products were used while rolling out South Asia's first intelligent optical network for Tata Power and are being deployed in the optical fibre network being set up for Railtel.

It acquired 10 new customers last year. Indian firms have global presence in software, but little in hardware.

However, Indian presence is negligible in proprietary products, both software and hardware. Tejas' distinction lies in designing and successfully launching hardware products -- the sort of "boxes" that have made the likes of Cisco globally famous.

The company's TJ100 range of products enable telecommunication carriers to build converged networks, which carry voice and data and offer new generation services like bandwidth-on-demand and Ethernet leased lines.

Besides Nayak, Tejas' founders are Kumar N Sivarajan, chief technology officer, and Arnob Roy, vice-president (engineering).

It counts as a friend, philosopher and guide Gururaj Deshpande, who is an investor in the company along with Sycamore Networks, which was founded by him.

The company has received two rounds of funding totaling almost $12 million and is unlikely to require any further cash injection.