Pramati Technologies Is Ready To Take On Goliath

Pramati Technologies is the latest David taking on Goliath. The small Java application server vendor, based in Hyderabad, India, is embarking next week on a U.S. product launch and marketing push, going after midsize companies that it says have been underserved by its larger competitors, particularly market leaders BEA Systems Inc. and IBM. The privately held Pramati, which means "exceptional spirit," will spend 60% of its total marketing budget in the United States. "This is a major focus for us," CEO Jay Pullur says, declining to give specific figures.

The company's strategy is to focus its sales force on signing up distributors, resellers, and partners that can get its products in front of corporate IT. On Tuesday, Pramati will start shipping version 3.0 of the Pramati Server and its integrated development environment, Pramati Studio. The upgrade has been in beta for several months and was the first application server to pass compliance tests for the latest version of the Java 2 enterprise platform, J2EE 1.3. Pramati will offer midsize companies, defined as companies with revenue of $100 million or less, a platform for building and running Web applications at a fraction of the cost of BEA's WebLogic or IBM's WebSphere. "There is no sacrifice" in technology, Pullur says. The starting price for Pramati Server, including tools, is $5,000 for a two-CPU server. Pullur says the company can sell its technology for far less than most because its 100 engineers work out of India, where wages are substantially lower than in the United States. Investors behind 5-year-old Pramati include Citibank, Intel Capital, and K1 Ventures.

In trying to break into the midmarket, Pramati will compete against some major high-tech companies, including Hewlett-Packard, which is giving away a basic version of its application server. "It's a small company that says they're going to compete on price, but how are you going to compete with IBM for example on price?" Illuminata analyst James Governor asks. "IBM could give it away until the cows come home." Pramati's success will depend on whether it can partner with large distributors and resellers and convince some major independent software vendors to bundle the application server with their products. In addition, Pramati's tools are going to have to be substantially easier to use, a challenge given the fact that J2EE is known as a difficult platform.

Regardless of whether Pramati is successful, the company represents India's potential to become more than just an outsourcer of foreign software development. Research firm Giga Information Group says India owns 80% of the offshore development market, which was worth $6 billion in 2000. "If you have great engineers and you have capital and entrepreneurial skills, you've got to eventually get some successes," Governor says. "I expect in the next couple of years there could be an Indian software company that has a household name in the U.S."