How Pramati Technologies reinvented itself with its corporate incubator strategy
Every year, from October to January, Pramati Technologies hosts an event dubbed Infinity at its headquarters in Hyderabad’s Banjara Hills suburb. The primary purpose of the event is to identify innovative product ideas from within the company’s workforce that can be incubated, scaled and commercialised for the market.
“If we see an idea (at Infinity) that fits a hot market opportunity, we carve out the team and incubate them,” says Vijay Pullur, who founded Pramati in the late nineties with brother Jay Pullur.
The incubation programme, which has been running for two years, is an evolution of a strategy that the Pullur brothers embarked upon a decade ago when they realised that they needed a differentiated model to remain agile and continue to scale Pramati.
The outcome of that strategy is that today Pramati operates through a matrix of independent subsidiaries, each of which focus on a specific line of products and solutions. In the US, the company runs WaveMaker, a low-code app development platform for enterprise developers, Imaginea, an innovation services platform for large enterprises, and SpotCues, a micro-app platform for digital transformation.
Apart from those subsidiaries, three new products are at various stages of development -- Hyscale, a dev-ops modernisation platform for container deployment; ThumbSignIn, a biometric authentication software-as-a-service platform; and Chatlets.ai, an artificial intelligence-powered conversational experience platform. These are currently housed under another US-based subsidiary called Pramati Prism.
“Prism houses products that are mature but not big enough to stand on their own feet. After they have acquired a certain maturity, we spin them out,” says Pullur.
When it started operations in 1998, Pramati was a software services company that developed its own Java application server. Soon, it was competing with global software players such as San Francisco-based BEA Systems (acquired by Oracle in 2008), IBM and Oracle. Close to a decade after creating a stable and profitable business, the founders decided that Pramati’s future lay in developing multiple products.
The transition got underway in 2012 when Pramati acquired Bengaluru-based Arthur J Gallagher’s IT and support centre. The acquisition gave Pramati dev-ops automation capabilities among other services and was housed under Imaginea.
Then in 2013, it acquired WaveMaker, a low-code application platform, from cloud systems firm VMWare. “We acquired the company from the stables when we saw that our cloud strategy needed a piece integrated with the development environment. We grouped our cloud products with this. WaveMaker can address and modernise large applications,” says Pullur.
Today, the company has institutionalised its corporate incubator strategy under a three-stage model. In the first stage, a product owner is identified to drive the idea to the next level and becomes the co-founder when the idea reaches the venture stage. “Before we acquired WaveMaker, I was already working on a small initiative internally on the next wave for the app server business. With the acquisition, a few key people came on board at Pramati who helped in the transition. We were keen on rebuilding what was there and had a clear vision for the low code platform,” says Deepak Anupalli, vice president of engineering at WaveMaker Inc.
He now doubles up as a mentor to HyScale, incidentally an idea that came out of the WaveMaker team. The incubation model, he adds, takes away the risks and struggles involved in starting up and helps build connections with customers to test out the minimum viable product.
“As a startup founder, you have to hire each and every talent from the market. With the backing of Pramati Technologies, there is an available talent pool and there are people who can advise you from time-to-time. The company also takes care of other aspects of the business including administration, legal and human resources, so that the founder and team can focus on developing the product,” Anupalli says.
The incubation model has also started to spawn entrepreneurs outside Pramati. Anupalli cites the example of Rajiv Shivane, co-founder of Qontext, an enterprise social networking platform that was incubated by Pramati and was acquired by software corporation Autodesk. Shivane has now started his own venture called Agilitix.ai, an AI-powered analytics platform.
“As a co-founder, the journey gives you a lot of learning from developing a new product to taking it to the market,” Anupalli adds.
This sentiment is echoed by Praveen Kanyadi, co-founder and vice president of products at SpotCues, which was formed out of a gap in productivity and communication.
“I come from Yahoo! where a lot of my colleagues moved on to set up their own companies. Only 5% of their time was spent creating a minimum viable product and finding the right market for it. Rest of it was spent getting investors on board and other functions. Pramati’s model takes that away and lets you focus on building the product,” says Kanyadi. He calls Pramati a ‘finishing school’ for entrepreneurs.
At the ideation stage, the product’s intellectual property is owned by Pramati Prism. Once a venture is spun out into a separate entity, the IP rests with the newly formed company.
“We of course cross-leverage and cross-sell products but more than that it gives focus for each product team to be the best in their category. Also, from an exit standpoint, each company may have a different target and different growth path,” says Pullur.
He adds that while institutional knowledge of building products and services such as human resources, finance and legal are shared, the format allows individual product leaders to dream big and become successful in their own markets.
Pramati and its network of subsidiaries have been profitable over the last 10 years and operations are now spread across India, Europe and North America. The firms employ close to 1,500 engineers. Refusing to comment on the specifics of scaling the business, Pullur says that the revenues are spread out between the multiple entities Pramati owns.
“We have a Pramati Singapore entity that is our APAC hub but is also our investment arm for spun-out US ventures. In the US, we have multiple companies focused on each product,” he says.
He adds that it is difficult to get one single picture by looking at the business performance of Pramati India.
“Pramati has been running profitable for the last ten years. Our cash to operate at a large scale comes from profits from business and income from mergers and acquisitions,” he signs off.