V V Kannan

Talk of dot-coms and you simply cannot leave out Sify. Satyam has been one of the most aggressive players in the Internet space and showed its ambition when it gobbled up the Indiaworld portal for a mind boggling Rs 499 crore, in what was then seen as an amazing buy, but in hindsight was perhaps one of the worst business decisions ever in Indian business. While Satyam and its subsidiary, Satyam Infoway (Sify) have always been at the forefront and have captured the media’s attention, there has been less talk about its portal, Sify.com. Though things have been silent on the portal front, the portal is a vital cog in the entire wheel of Sify’s Internet plans.

Says V V Kannan, vice-president, Interactive Services, Sify, “We believe we have a unique advantage over other sites since we are the only company in the country which offers end-to-end products and services. Connectivity, content, commerce and community are the four key strengths we have focussed our energies on, and this is a prime factor that has led to our success. With the largest chain of cybercafes in the country, along with six lakh-plus subscribers, we offer a compelling proposition to corporates.” Kannan claims that Sify.com is the largest earner of advertising revenue in the country, a claim which rival Yahoo may contest. For the fiscal year 2002, the portal earned revenues of $4.2 million, up from 2001’s revenues of $3 million.

Kannan also believes that the Internet as a model is bound to succeed only for serious long-term players and for players who are constantly innovating. Sify has been constantly innovating be it in the ISP space, where it pioneered the concept of off-the-shelf Internet packs, or in the portal space where the focus has been more on earning revenues through events. Explains Kannan, “Going forward, we believe that pure banner advertising will never be successful. What will succeed are innovations that can bring value to both the client and the customer. For example, we did a promotion for IBM Thinkpad. For a specified time, whenever a user logged onto our site, the user saw the IBM Thinkpad, creating a good brand image in the eyes of the customer. Going forward, we believe our ‘innovations’ will keep us ahead of the rest of the pack.”

It is clear that only long-term players with deep pockets will hold the key in the Indian portal space. One more factor that could tilt the scale in Sify’s favour is the fact that global models have shown that ISPs with content power rule the Internet space today. AOL and MSN are prime examples. Players like Yahoo are also tying up with ISPs abroad. Hence in the future, we could see players who can deliver services in an end-to-end manner ruling this space.

Sify is also looking at opportunities where it can make its content pay. Explains Kannan, “For example, if any ISP announces today that he is going to provide multimedia content on the Net, an Indian customer is bound to laugh at this claim. But if a portal that is also an ISP owns the network, he is better equipped to provide these services. For instance, we have around 350 cybercafes out of our total number of around 700 cybercafes on a broadband network. In the future, we can look to create a new revenue stream out of this, simply because we own and control the network.”

Rather than complaining about lack of payment mechanisms, which have been a major factor for e-commerce not taking off in India, Sify has tried to get around this problem by providing the customer the option of cash on delivery. Cases like this prove that adapting oneself to the changing environment will be one of the prime factors that will decide the survival and profitability of dot-com companies.