Is Pentasoft selling product titles?

The market is abuzz with rumors that Pentasoft Technologies Ltd is in the process of selling few of its product titles to US-based Protechsoft Inc. However, when contacted, a top official at Pentasoft denied it but confirmed that Pentasoft and Protechsoft are getting into a strategic agreement whereby the latter would be involved in product enhancement, maintenance, support and marketing for Pentasoft as their `Technology Partner'. Protechsoft would be working closely with Pentasoft in banking and Enterprise Resource Planning (ERP) businesses and their relationship would be extended to both domestic and overseas market.

According to D Kannan, CEO of Pentasoft, the company is neither selling the products nor the prices but rather appointing Protechsoft as the technology partner. "To succeed under the current competitive global IT market scenario, the best way for IT companies is to combine the strengths of different organizations and put a consolidated front rather than trying to go alone in the market place. Accordingly, it was agreed between Pentasoft and Protechsoft to work on a common strategy to enhance the global marketing of its products and services by entering into technical alliances whereby the profits will be shared on an agreed formula which will be a win-win situation for both the organizations. Based on this approach, some of the Pentasoft products in the areas of banking and ERP segments have been given to Protechsoft," said Kannan. Pentasoft is also looking at similar partnerships where it would offer its products to companies specialized in the respective area. 

However, Raman, CEO of Esdotcom, a partner company of Protechsoft based out of Chennai, said that discussions were on to acquire products from Pentasoft, which was likely to happen by the beginning of next year. This is in confirmation to the information available in the company's website
(www.esdotcom.com).

Meanwhile, Kannan said that Protechsoft is into banking, financial and ERP space, so Pentasoft is giving its banking and ERP products to Protechsoft to further enhance them in the domestic, Middle East and Asia Pacific markets. "Presently, we have signed an agreement for two years, which would be renewed later," he said. "It was explicitly agreed between both the organizations to collaborate over an agreed period of time during which, both organizations will try to trigger their market connections to bring in product sales and the connected software services opportunities. It has also been agreed that development, implementation and support related activities along with global marketing support on the select products will be undertaken by Protech by retaining some of the senior Pentasoft personnel as key advisor roles or on deputation from Pentasoft during this period," he added.

Kannan was reluctant to disclose the financial information quoting NDA clauses in the agreement, which prohibit them from revealing the financial agreement at this point of time. 

The company recorded a slump of 74 percent in net profit to Rs 6.97 crore on sales of Rs 85.45 crore in their second quarter ending September 30, 2002. This is against the net profit of Rs 26.61 crore on sales of Rs 133.09 crore for the same quarter in the previous year.

Nisha Kurian 

(CNS)