From the Netxpress Archives: Where Have All The Companies Gone?
Tuesday, July 1, 2008 19:13Editor’s Note: As we were digging up old documents and archiving files from the years when we were less savyy of storage and mining mechanisms, we came across a whole bunch of articles from the times BEFORE 2004. Here’s one we thought we’d post up just for old times sakes!
January 2004 issue: Netexpress takes a look at the wave of technology companies that have come and gone over the past four years – Is this really the sign of the times?
When Information Technology hit Pakistan, everyone went mad. Completely insane. Con artists, who are in great numbers in every exciting, shiny, new field, showed up at the doors of anyone who had absolutely any money, with hopes to land an investment in a technology company. And so we saw the rise of IT institutes, hardware stores, small web development houses, CD stores, Cyber Cafes – the list is really endless. The supply side was pumping to the hilt with no stopping in sight.
Then we had the creation of the hype and demand amongst the masses. Anyone who knew even the “Eye Tee ka alif bey” was frequenting the genre of stores listed above, trying to figure out what the best deal for themselves. See, not everyone understood exactly what the difference was between an ISP and a DSP, so people had to rush out into the market to find out. Students enrolled into IT institutes, short courses or any course which would help them understand what Information Technology was all about, by the hundreds. Thus, the demand increased.
Companies sold. People bought. People demanded. Companies offered. But in all the kithdi, natural market forces eventually started to settle in. Survival of the Fittest. Shape up or ship out. If a company couldn’t give the consumers quality over an extended period of time, as is the general commitment, they eventually left the market.
Pakistan has a lot of seths who own tremendous companies that are doing a great deal of business in various sectors other than technology. Agriculture, textiles, pan masala… When the government starting moving its focus towards IT, these seths immediately set up technology-related companies. The likes of Fauji Fertilizers invested into Fauji Soft; the likes of Lakson Tobacco giants invested in companies such as CyberNet and others; textile manufacturers invested into ISPs; World Online took shape after its leather export backing finally put money into its development – the list just goes on.
It does, however, make sense to have such sector giants putting in money to setup the IT businesses. In order for any company to run, you need one thing: money. Once you have the financial backing, you can buy everything else – the property, the people, the expertise. Money, contrary to the belief of most dreamers, can buy everything. Up until the time that the finance is still around and sound, the business will survive. The moment the bank balance reaches zero, everything stops. That is why, on a tangent note, it is so important to run a background check on a company to see where its finances originate from, prior to engaging in any kind of business with them. If you can’t see a money trail, chances are the company won’t be around for too long either.
A lot of companies have gone out of business over the course of the last three years. Once the market place settled a bit more, with competition on the rise, the better product and best quality of service and support survived.
There are lessons to be learned by the companies that have shut down. Rather than pass them off as dead, a slightly more in depth autopsy on why the companies shut down can prove to be a real eye opener for existent companies.
ZoomNet the ISP started off in Pakistan with a great bang, speed, style and gave the user everything he could have ever imagined. They were amongst the first to create the Dealer Network along with SuperNet. They were also amongst the first ones to put out the scratch cards for pre-paid Internet. Leaders in so many ways, it was one grounding element that brought their downfall: poor management. Even though they offered affordable connectivity, great packages and so much more, there was a lot of money mismanagement and the entire operation was eventually very badly managed. Thus, their downfall.
Software companies that opened up trying to ride the IT wave, did have great management and wonderfully sharp managers, however a mistake which most of them made was the unforgivable sin: over spending, better known in the business world as the Mismanagement of Funds. With the prospect and promise of so much business, software companies mushroomed all over the place, looking for ideal locations to set up shop, had an image to protect in order to attract business, hired too much manpower for too little business. The business, for many, just never picked up.
The MT industry, often joked about as the “empty industry” was an opportunity disgraced. When the West wanted cheap labor to type dictated transcripts, they looked to countries in the Sub Continent area. A simple per line charge could be earned providing the transcriber had sufficient typing speed, passable English and good listening skills. There was so much work since the Western world was, and remains under pressure to digitize all its records, that there was more than enough for everyone. As a result, hundreds of MT companies opened, failed miserably because they simply couldn’t keep up with the deadlines, and shut down. Neither did most companies have the minimum skill set needed to get the job done. Companies such as InfoTrain and countless others simply could not manage, suffered the loss and closed shop. However the failed businesses hurt more than just themselves or each other. They managed to smear our repute as a country into smithereens by taking on easy-money work, and not being able to deliver. Many MT associations around the world, though whom work is transmitted, simply refused to conduct business with Pakistani companies.
Then there were IT institutes who mushroomed all over Pakistan, and boy was that a big mess. Simply because in the process of ruining itself, due to its nature, an educational facility also ends up ruining the lives of the students attending the courses. Take a peek into the buildings on Shara-e-Faisal and you will find countless ex-institutes. IT institutes who couldn’t pay their monthly bills, had evaded taxes, cheated their students, ran away from the KESC and other utility company dues. Compare the Gulshan-e-Iqbal area of 3 years ago to today and you will see a lot more empty space there. Reasons for the disaster? Lack of quality and control. A student who graduated from an already-low level institute, will get together with a few friends, and open up his own institute, and the process keeps repeating itself. What you are left with ultimately, is a state where the “teacher” is neither older nor wiser than the students he is trying to teach.
Conducting business in the field of Information Technology requires a few fundamental things: professionalism, timely delivery, commitment and a hell of a lot of dedication. Unless we work on all of the above, we need to take a close look at what has been going on in the local industry, and then fix it so it is not repeated with the extremity that it has been. Only then, can the Pakistani company stand for anything close to quality. The lessons we need to pick up are not in the things that we should do; rather need to figure out what it is that we shouldn’t be doing, and then get on with IT.
