eSys rises like a Phoenix to touch S$3.4 Billion
From a sales coordinator to a billionaire, the five-year journey of Vikas Goel is worth documenting

Five years back, hardly any gray beard of the Indian IT industry could imagine that a company called eSys Information Technologies could make a deep impact in this business with operations in 31 countries, 792 employees and a revenue of about S$3.4 billion in its current financial year. Today, when eSys is basking in the glory of achievements that it has been ranked first among the winners of this year’s “Enterprise 50 Awards” in Singapore, you may wonder how it happened, given the fact that there is a wafer-thin margin in the IT business.

The success of this company is not a sheer coincident but a saga of hard work of the person behind the entire show. His name is Vikas Goel, Chairman & CEO of eSys.

Vikas’s journey starts like an average salaried employee in Singapore. Like others, he has also undergone the trauma of career hazards in life. In 1996, Vikas, 26 years old at that time, distributed copies of his resume literally in every office with the hope for a job. However, after much toil, a low-profile job –sales coordinator –came his way and the company was American Components, an IT distribution company. During his stint with this company, he used to distribute Seagate’s HDDs in India and it was very nicely done.

Later on, he joined Fujitsu with a better package and subsequently joined Karma, a small company, with salary and some share in profits. This was perhaps the turning point in his career. During his assignment with Karma, the company suddenly collapsed, but Vikas made a buy-out of the company. This is to emphasize here that Vikas betted big on a dying horse, but as luck would have it the horse won the race. Here, the script of eSys history started in obscure letters. The twist in the tale came when a loan of US$3.5 million was sanctioned by the Bank of India in Singapore. Vikas recounts, “I just walked into the office of the CEO, opened my laptop and gave a presentation. A few weeks later, he loaned me US$3.5 million. It came after all the banks in Singapore turned their back on him. It was definitely Vikas’ passion and the fire in his belly that influenced the banker to sanction him such an amount.

The company had a very modest beginning. eSys started from a single-room at Macpherson Road with the distribution of hard drives in India. His business acumen and hard work helped the revenue of the company to touch US$108 million. And, in the second year, it had spread its footprints in 12 countries with a revenue of US$240 million. Then, it had a meteoric growth to US$860 million in 2003, and in 2004 it touched US$1.4 billion.

eSys’ successful chapter in India for Seagate actually brought fortune to the company. Once Seagate developed confidence in the company, it started extending its relationship with eSys in other countries as well. Looking at this success, the competitors of Seagate also banked upon eSys. Today, eSys has its presence in Asia and Europe with 25 in-country subsidiaries and 65 points of presence. All the eSys subsidiaries employ in-country sales teams and carry local stocks. It was perhaps the largest HDD distributor in 2004 in the world with 20 million disk drive unit sales. It is distributing brands like Seagate, Maxtor and Western Digital. eSys is also the largest distributor of Hynix Memory Chips (Asia and Europe). Besides HDDs, the company’s portfolio includes products like CPUs, mobile phones, servers, monitors, ODDs, motherboards, modems, consumer electronics and other non-IT products.

Vikas’s uncanny knack of forecasting the future is, to a large extent, responsible for the enormous success of the company. One should not forget that in 2000-01 there was a worldwide recession in the IT business, but Vikas by choice put everything at stake. Secondly, in 2003, eSys brought out self-branded PCs and built plants in the US, Dubai and India. When everyone thinks that China is the ultimate destination for manufacturing, in 2004, he moved eSys’ PC manufacturing from China to Changi in Singapore. It was again a brilliant move. Vikas realized that, in terms of logistics, in China, it takes at least six weeks extra to get one’s products in and out because the ports are congested and factories are located in remote places. All this involved inventory holding, obsolescence and warehousing costs. Then, if you are in a free trade zone, all your staff have to travel for at least 90 minutes to reach his workplace and back, so productivity goes down. The cost of labour in one PC is about $1. In China, it might cost you about 50 cents less. But then the cost of flying just one hard drive into China is more than $1. On top of it, you need to pay 17-per cent VAT in China, which is not there in Singapore. So, keeping all these aspects into consideration, the cost goes down by 40 per cent if it is manufactured in Singapore. And, this calculation clicked for him.

Another management skill, which characterizes Vikas, is the credit management. eSys used credit insurance. It means the credit is insured. This meant a bigger satisfaction and comfort for the customers to work with eSys. The customers wanted long-term credit, which was given to them because it was insured. The same thing was also applied in the case of suppliers, which enabled a free flow of supply to eSys and bankers also cooperated with this. And, the net result was cheaper finance. Another remarkable strategy was that Vikas moved all the back-office operations to India. So, the overheads of each country’s operations were minimized. Most of the office functions like HR, finance and management information systems are handled out of India. It means that, physically, there are 10 people at the front office, whereas another 30 people are there behind them in the back-office to support. It means that virtually there are 40 people at work. eSys uses the latest technology to save expenditure. The company uses Internet telephony. Seventy per cent of eSys offices use VoIP (Voice over Internet Protocol) services. The use of Internet telephony has led to enormous savings, given the connectivity and communications needs of eSys.

Finally - Another characteristic of Vikas’s personality is adaptability. He was adaptive to the business policies of both ––the suppliers and the customers. Today, the company’s turnover is S$3.4 billion and the way the company is growing, it will not be difficult for it to touch S$17-billion mark by 2010, as is expected by Vikas. Our strong belief is that it would surpass many milestones by that time.

Launch of Vikas Goel Foundation
At the official opening ceremony, Mr. Vikas Goel also announced the launch of the Vikas Goel Foundation which will work towards the delivery of education and healthcare benefits to remote and underprivileged societies of the world. Mr Goel has pledged a seed capital of SG $1 million. Over the next three to five years, he will pump in an additional SG $5 million.