Leaders Speak

Mr. Suresh Reddy
Co-founder and Chairman, Ybrant Technologies

Jun 21, 2006 – Ybrant Technologies delivers support services and software tools for enterprise e-marketing. Ybrant began as USAGreetings.com, in September 1999. This early entrant quickly became popular for its wide range of original and hi-tech animated content, and grew to a user-base of 1 million. In November 1999, the company introduced the ‘Powered by USAGreetings’ engine — its first eMarketing product. In June 2000, the company metamorphosed into Ybrant Technologies Inc. Ybrant offers custom software solutions ranging from developing and maintaining new applications to implementing third-party software with expertise in developing large web-based software systems and tools designed to address the varied needs of our clients.

Suresh Reddy, Co-founder and Chairman, Ybrant Technologies is responsible for the strategic direction of the company. Prior to co-founding Ybrant, Suresh was a consultant to Charles Schwab, Pacific Bell, Chrysler and Caterpillar. He has extensive cross-industry experience and holds an MS in Engineering from the Iowa State University and a B. Tech. from the Indian Institute of Technology, Kharagpur.

Mr. Reddy tells Anil Mascarenhas of India Infoline that Ybrant proposes to capitalize its technology base in India with acquisitions in the US in the same space with cross selling and profitability improvement opportunities.

Online spend is gaining momentum. What is the expected spending via online medium? Going ahead what are the trends we are likely to witness?

The concept of eMarketing is picking up globally. More and more advertisers are spending their ad budgets on online than offline. Forrester Research forecasts say that “the marketers will spend US$26bn in 2010 on online display ads, email, search, and classified ads will represent 8% of all advertising spending, rivaling spending on cable/satellite TV and radio.” The eMarketing industry as opined by experts is all poised for a giant leap. According to the IAB&PWC, Internet advertising revenues in the United States totaled over US$12.5bn for 2005, increased nearly 34% over 2004, which is of US$9.6bn. Forrester Research forecast internet based sales to touch US$329bn in 2010. Over the years, internet has evolved as a medium for lead generation since the online usage has gone up significantly. With the technology sophistication, effective targeting can be achieved for an online campaign.

Internet has emerged as one more channel over TV, Print, Radio, hoardings for marketers to reach out to consumers and potential consumers. Technology being the backbone of e-marketing acts as a powerful tool to track the campaigns. Campaign mix can be optimized using tracking.

Speaking of Ybrant, what changes have you witnessed as far as support and software tools for enterprise e-marketing is concerned?

The technology sophistication is increasing by the day needing continuous improvement on the tools needed to manage and monitor a campaign. The requirements of the marketers are and with technology as a back bone, the demands of the marketers are being achieved. With the large amount of data being accumulated by companies through various e-marketing campaigns, we expect intelligence being built into systems for effective targeting.

Briefly, could you explain what services do you offer your clients?

Custom Software: We offer custom software solutions to meet requirements ranging from developing and maintaining new applications to implementing third-party software.

We have expertise in developing large web-based software systems and tools designed to address the varied needs of our clients. Ybrant offers custom software solutions on a project basis or in the form of the services of dedicated programmers. Creative Services: Ybrant offers best-in-class creative services to lend that professional ‘look and feel’ to your web and print presence. Our creative services include web site design and redesign, Email marketing creatives, Newsletters, and Landing pages.

Ybrant’s creative services suite includes marketing collateral design for web and print media, Flash and PowerPoint presentations, illustrations, and animations.

We specialize in providing electronic communications that maximize customer response and ROI. Email Marketing: Ybrant offers solutions to help you leverage best practices to market using Email. We follow CAN-SPAM 2003 compliant methodologies.

SEO Services: Ybrant offers proven strategies to drive more qualified visitors to your web site by optimizing them for search engines.

Our SEO specialists combine technical know-how with domain expertise to deliver a unique competitive advantage to your business by means of increased traffic and revenues.

Affiliate Marketing and Co-Registration engines provide companies to manage their campaigns. Affiliate marketing is marketing the products and services through affiliate website with tracking systems on the traffic flow and revenue sharing flow.

We have a strategic advantage of being a player in the US markets in the e-marketing space and having a significant base in India. Technology is the back bone of e-marketing. Our clients benefit with our tools, custom software and the services for managing building and managing campaigns.

What does it take to be a leader in this space?

Ybrant started as a online greeting card company which has evolved into an eMarketing ‘Fire Brand’ providing eMarketing tools and services to 140 plus US-based clients.

To be a leader one needs to understand the various elements that go into creating, developing and maintaining customer relationships online, which we specialize in and with proven methodologies and industry expertise, Ybrant ensures clear and measurable results for its clients.

Our experience and expertise separate us from the rest. Our strong focus on business need and ROI for customer, an eye for detail and quality, ability to work within tight time frames and fixed budgets enable us to consistently provide top class work. We are highly flexible and we custom package each solution and offer a level of customer service that is rarely found elsewhere in the industry.

We are the only company in the space with backend in India offering end to end solutions for e-marketing companies. Ybrant proposes to capitalize its technology base in India with acquisitions in the US in the same space with cross selling and profitability improvement opportunities.

What is the market size? Domestic and global?

There are no numbers available for domestic markets. The size of US markets for the calendar year 2005 was US$12.5bn. It is expected to touch US$15bn in 2006 and to US$28.5bn by 2010 (Source : emarketer 2006).

You began as USAGreetings.com and then metamorphosed into Ybrant Technologies Inc. What triggered this move?

We saw e-marketing as a means of using the power of internet to monetize dotcom traffic. USAGreetings.com was the top ten greeting cards sites in the US but was a dotcom. The revenue flows were minimal and the opportunity for growth was limited. Having understood the internet space, the power of internet and with the technology base in India, we saw an opportunity for developing tools and services for e-marketing. We felt we can never go wrong with the shift in strategy taking a cue from Gold Rush of US, wherein whether the gold digger made money or not the tool provider always made money. We focused on technologically sophisticated tools backed by services from India to leverage the e-marketing opportunity offered in the US.

Update us on your major clients. What growth do you see going ahead?

Some of our major clients are Yahoo!, CapitalOne, Vayan Marketing, AdDynamics and SEOInc. Ybrant has developed a strong reputation in the eMarketing space as a reliable partner in delivering quality solutions. The company has grown by over 50% in revenues, client roster and employees year on year for the last 3 years. We are on track to do better than 50% growth this coming financial year.

Give us a geographical spread of your clients. Going ahead which are the markets you plan to tap?

Ybrant has about 140 clients spread across the US. Going ahead we intend to focus on US markets only since the market is huge. We are observing the trends in Europe, China and India but have not taken strategic decision to tap the markets immediately.

How much of your revenues come from exports?

Around 98% of our revenues are from exports and all the exports are to the US.

You have a number of platforms on which you operate. Which are the popular ones and what advantage do they have?

The revenue mix is fairly spread and our platforms for email marketing, Affiliate Management, Search Engine Management and Co-Registration are quite popular apart from our custom services for software tools upgradation.

Between your services, which are the ones which bring in maximum revenues?

Technology platform sales and Search Marketing bring us maximum revenues.

What are the search engine optimization techniques you offer. How much would it cost for a company to drive traffic to their website?

Our years of interaction with e-Marketing companies coupled with our technical expertise make our SEO Services among the most sought after. Our SEO services cover the entire spectrum:

Web Site Redesign
Content Optimization
Link Building
Site Submission
Maintenance and
Pay Per Click Campaigns.

We understand our clients have their own individual needs and budgets and we make our services completely flexible to suit them – be it complete optimization or only link building.

Give us an idea on how do you charge the clients? How are margins in this business?

The model for charges are different for each segment of tools are services being offered. The models for charging range from pay per use, software license fee, software development charges (hourly rates) and performance based charges.

Tell us more on your customer support.

Ybrant provides customer support services to help you manage customer queries and concerns through multiple touch points including e-mail and chat on a 24/7 basis. Our services include round-the-clock technical support and problem resolution for computer hardware, software, and Internet infrastructure, involving installation, product support, troubleshooting and usage support.

What is your growth strategy going forward?

We expect to grow at over 50% annually. The markets are good and there is good amount of traction in sales from our customers. We are also having mergers in the related domain as a strategy for growth.

You are planning some inorganic growth in US. Are they your existing clients?

We already have signed LOI with two companies in the US for acquisitions and the due diligence process is on. Since we intend moving up the value chain in the e-marketing space, the typical profile of our acquisitions would be our clients and potential clients.

What is the amount set aside for the same. How is it being funded? What synergies does it bring?

The total budget for acquisitions is being worked out and we propose to fund by way of private equity. The acquisitions would enhance the offering of the company while retaining the technological base.

Who are the promoters of your company. What is the shareholding pattern?

Mr. Vijay Kancharla and myself have co-founded Ybrant. Vijay Kancharla is the Chief executive officer, responsible for the organic growth.

At what price and to who are you planning to dilute stake?

The numbers are being worked out.

Where are you opening your new facility. How was it funded?

We would be moving to our new facility shortly and is based in Hyderabad. It is funded from internal accruals.

Do you plan to tap the capital markets? When?

We are looking at the strategic advantages of tapping the capital markets. We are looking at various options before we freeze on our plan to tap the capital markets.