'We have grown at 100% CAGR, against 15% growth of CAD market'

Can you give me an overview of CAD market in India? The Indian 2D/3D CAD software market is pegged at approximately Rs 200 crore in 2015, and is growing at a CAGR of 15 percent. Of the total CAD software market, the architecture, engineering and construction (AEC) verticals are the largest contributors followed by mechanical and manufacturing verticals. These two verticals corner nearly 65-70 percent of the demand. Places like Surat, Vadodara, Ahmedabad, Jamshedpur, Nagpur, and Pune, are experiencing high growth in the manufacturing sector, which are increasingly employing CAD solutions for product designing. Government and education segments are the two other prominent sectors that leverage 3D solutions. We see all round growth for our CAD solution going forward. However, government segment holds big opportunities due to the present’s government’s focus on programs like land record digitization and smart cities. How is Graebert's India business doing? What are the growth drivers? Graebert set up a subsidiary in India in 2012 with a state-of-the-art India Development Center. Today, this center is the largest development center globally for Graebert and plays an important part in developing key CAD technologies. We set up our sales operations in India in 2014 and our flagship products—ARES Commander and ARES Touch—are distributed by Ingram, the largest distributor of IT products in the world. We have made significant investments in India at the India Headquarters in Noida, and in a full-fledged state-of-the-art training center in Noida to impart CAD training to customers, partners and students. Our reseller network spans across India. Being a private limited company, we don’t reveal our revenues. However, in the last two years we have grown roughly at 100 percent CAGR, against the 15 percent CAGR growth of the overall CAD market, which means we are gaining market share from our competitors. Because of our superior products and flexible licensing, many large Indian enterprises like ONGC, Hindalco, Airport Authority of India, Fedders Lloyd, Motherson Moulds and Essar Oil are migrating from competing platform to Graebert. Looking at the business momentum, we are confident of garnering 100 percent CAGR growth in India and a market share of 50 percent in the next 5 years. How do you think the needs of Indian customers are evolving and how is Graebert evolving to meet these needs? Who are your customers in India? India is a promising market for CAD software. The adoption is on the rise due to increased usage of rapid prototyping and tooling by industries like automobile, aerospace, machine tools, healthcare, consumer durable and manufacturing. Product visualization is also driving the CAD software adoption. Development of quality products depends on superior quality of drawings. Usage of CAD software helps engineers to reduce errors in their product, plant or machinery designing processes. By using CAD efficiently companies can reduce their product design and development cost by almost 80 percent. With our latest ARES Commander 2016 and ARES Touch software solutions, we are poised to offer the best cross-device CAD experience. Few of our customers in India include, Indian Navy, Airports Authority of India, Pizza Express, Funskool, ONGC, Hindalco, LG, Essar Oil and Gas, GE Triveni Turbines, Motherson Molds and Die Casting, and Fedders Lloyd. What’s your go to market strategy for CAD solutions in India? We have a multi-pronged growth strategy for India. Winning competitors’ customers: Our main competitor has moved from perpetual licensing to software subscription model, which has not augured well with Indian companies as it raises the cost of using the CAD software significantly. As a result, we are seeing a trend where several large customers are migrating from competing platform to our platform. Expanding sales and distribution network: We already have a set of 45 strong partners. With new opportunities arising out of Smart City, Make in India and Digital India projects we plan to expand partner network to tier-2 and -3 cities. Launching new products: Besides the newly-launched ARES Commander 2016 edition and ARES Touch, we plan to launch our globally acclaimed products and services including ARES Map—a hybrid solution bringing together the intelligence of GIS contents and a full-featured DWG-based CAD system; our surveying solutions, SiteMaster and surveying services, iSurvey. These new offerings will significantly expand opportunities in the Indian market. Focus on government projects: With the new offerings soon to be launched, Graebert has set of offerings that are important for government’s flagship projects—Smart City and Digital India. ARES Commander, ARES Map, SiteMaster and iSurvey are important to the Digital India Land Record Modernization Program. The total budget outlay for this program at the central government is expected to be Rs 5,000 crore over the next five years. States will have their own outlay. Graebert is part of the Association of Geospatial Industries that is advising Nasscom and DoLR (Department of Land Resources) on selecting the right technology framework for this project. Further, all our solutions are important for creating digital maps which are integral part of planning and implementation of Smart City projects—intelligent parking, intelligent transportation, smart water management system, intelligent utilities, etc. How is Graebert gearing up to provide a cross-device CAD Experience moving forward? Graebert GmbH is a German company, recognized as a true innovator in the CAD industry with more than 30 years of expertise in CAD software development and customization. With a strong R&D culture, Graebert’s DWG-based CAD systems were the first to run on all three OSes—Windows, Mac and Linux. We were the first to launch mobile CAD and cloud CAD. Millions of users use our ARES CAD technology across 100+ countries around the globe. We already offer the best cross-device CAD experience with our ARES Commander and ARES Touch software. The latest ARES Commander 2016 has several innovative and unique features that increase productivity and efficiency in creating CAD designs. Our customers appreciate the superior features of ARES Commander over competing products. Further, ARES Touch is the first and most complete CAD solution for mobile devices. It supports more than 150 commands. ARES Touch is bundled with ARES Commander. When you buy one, you get the other at no additional cost. Not just that we offer flexible and unique licensing options that help customers reduce the number of licenses and costs. With LicenseToGo feature, the same user can activate one main computer and work from others from time-to-time without deactivating the license from the first one. Users can even use computers under different operating systems. Under our Flex License options, a single license can be shared between concurrent users or PCs on the same network to reduce the number of licenses and costs. Users can also take away the license for a defined period if they need to work outside the network. Further, we plan to launch our globally acclaimed products and services including ARES Map—a hybrid solution bringing together the intelligence of GIS contents and a full-featured DWG-based CAD system; our surveying solutions, SiteMaster and surveying services, iSurvey. These new offerings will significantly expand opportunities in the Indian market. What are the top challenges for Graebert here in India and how are they different from developed market? We are a new entrant in the Indian market as we began our sales operations only in 2014. Hence our big focus has been to increase our brand awareness. The second major focus is to build a strong and profitable partner ecosystem. Since 2014, we have made good progress on both these fronts. Our brand awareness has grown significantly which is evident from the fact that several large Indian enterprises ONGC, Hindalco, Airport Authority of India, Fedders Lloyd, Motherson Moulds, and Essar Oil have become our customers. On the channel front, through distributor Ingram, we have built a strong network of 45 partners in tier-1 and tier-2 cities. With new opportunities arising out of Smart City, Make in India and Digital India projects, we plan to expand partner network to smaller tier-2 and tier-3 cities. In the next couple of years, we will add 30-35 new partners. Going forward, we will continue to spend significantly in enhancing Graebert’s brand awareness and build a strong and profitable partner network. Both these aspects are crucial for achieving our goal of 100 percent CAGR growth over the next 5 years. What are your major investment plans and priority areas? India is important for Graebert’s future growth, both, in terms of developing new path-breaking products and business opportunities. We have major investment plans to expand the Indian operations. We have already invested $4 million in India and plan to invest similar amount to match our growth. The investment will go into expanding our sales and support teams in India in keeping with our growth targets; expanding our India development center; and substantial amount will go into marketing for creating brand awareness.