TechLahore

There out of business, current vendors are looking alternatives .
Word is they declared bankrupt , no specifics however over leveraging is to be blamed , that and the times we live in .

Yes, that’s what all the messages I have been receiving seem to suggest also. While they had several sharp people on the team, I think the Si3 story does serve as another reminder to never, “grow opex before revenue”.

I have heard a slightly different version. They have scaled down, they are keeping a very low profile, they still have contracts that they are working on and that they will have a future albeit a smaller scale one.

Depending on who you ask you will hear similar rumours about most firms in the technology industry in Pakistan right now, including yours truly.

I received another email from a participant who wishes to remain anonymous. Here’s the content of the note:

“dead in the water….and stuck on the edge of a black hole… i am sure that explains all.
really, its dead in the water….”

Si3 was destined to meet this fate, because of non-IT people at the helm of affairs. People who, when retired from AFF, assembled few investors and thought they are going to be the next killer tech enterprise of Pakistan.

They expanded real fast, hiring top notch people, way above market levels, spending hefty bucks on infrastructure but they had no real business plan (launching high street ISP and getting few sub-contracts through leveraging doesn’t count as a plan). The air is out of balloon for some time now, most of the good guys have jumped ship and I guess the ‘partners’ are waiting for a safe exit themselves.

Anybody remembers Swede Bus here? Pakistan’s first CNG Bus project, taken to rot by AFF and its affiliates.

I must caution that while Si3 may be winding down, that in no way reflects the list of successful technology businesses in Pakistan. Si3 was more like the “glamor” fast rising star, backed with alot of good PR but maybe not enough contracts to sustain the high costs….

There is a long string of companies that are moving forward with speed and doing very well despite the slowdow; Kolachi, Systems, TPS, Mixit,Inbox, Pixsense, and the list goes on and on….so I just hope people don’t generalize on the basis on one firm.

@Admin: Very true. Its just that like any other business, tech start up should also have a business case. PR may give a boost but it won’t go for long.

In fact, small businesses (5-20 ppl) are doing far better in IT Industry of Pakistan than some of the goliaths, may be due to agility and adaptability factors.

I agree Mohtashim (aka Admin – would you fix that please?!), Si3′s failure is in no way indicative of the Pakistani software industry in general. It is simply a case of spending ahead of the revenue.

Entrepreneurs, learn this lesson well before it happens to you. Being profitable in a completely unglamorous garage or apartment is far better than 5-star digs that pull you into the red!

Si3 exactly reflects what is wrong with our IT industry. Or least part of it.

We need to have and glamorize more garage based companies as oppose to companies owned by expat Pakistanis (which is not bad at all), sons of ex bureaucrats(which is next to horrible).

the way I see it-though I’m an illiterate in these matters-is the lack of domestic demand for software. there is practically no market for software in Pakistan. our software industry depends heavily on exports, which will lead to its downfall when western economies go bankrupt. we need to create and promote local use for software. all corporations and enterprises must embrace software so that our software companies can have something to do. the only local demand for software I can think of in Pakistan is maybe a free internet chatting or browsing tool or something?

Actually there is a lot of demand for software in Pakistan… if it’s the right kind of software… at the right price.

On the consumer side, ad-subsidised models, “micro” fees, e-commerce driven models and service-subsidised models are taking over across the globe. An eyeball is an eyeball, whether it’s in Pakistan or the Netherlands. One can make money off relevant applications.

Rozee.com.pk is an example of a good old fashioned subscription based service that is quite profitable. The issue is not demand. It is coming up with something that is worthy of demand.

On the enterprise side, around the world there is an increasing hesitance to pay for big $ apps. Gone are the days of multi-million dollar web apps. Those are few and far between. Open Source, offshore development and other trends have “cheapened” enterprise applications. However, there is still a reasonable amount of demand in Pakistan for ERP/CRM and other process automation applications. Only a handful will pay SAP/Peoplesoft rates, but at a certain price point, there is demand.

Once again, you could apply some of the consumer app monetization methods to enterprise apps also (ala Salesforce.com) and come up with a winning combination.

DesiBackToDesh. Except those rumors regarding Alchemy aren’t rumors at all, Alchemy hasn’t paid its employees for months, and while Alchemy has an office, it is, for all intents and purposes out of business.

For a company that is out of business, Alchemy seemed to be buzzing with activity today. Cash flow problems hit everyone from time to time, especially when there is a large amount in receivables in the market. Let’s not jump the gun, shall we?

Thanks for clarifying this, Jehan. We wish Alchemy the best of luck!

I agree techlahore, there is -alot- of growth to be had in local software. a simple way to gauge is the super high price small companies are ready to pay for oracle apps because of lack of a suitable local competitor, the elusive “local” erp brand. If there was no local demand, the large telecoms would not be going crazy trying to figure out how to break into the “micro” payments/micro “fees” markets…

About Alchemy : Nano, take a break , its never as bad as they say it is (alchemy) and never has good as they say it is either (Si3). GM is the one going bankrupt, not agile little Alchemy. It’s a tough business environment, all around, for everyone, in every part of the world. Come to New york, its brutal and ugly and I mean literally. We, as an industry as doing alright. We really need offer thanks and work on the next growth cycle… all of us.

@techalore: I’m crushed! you dont like “Admin” ?? hehe.

Cash flow problems are a reality, there’s no disputing this, but consider that: Alchemy has not paid it’s employees for 3+ months and has only sold one license in the last 1.5 years, it’s reasonable to assume that the company is out of business.

Dear Nano,

Not sure who you are or what your agenda is since you have been brave enough to put your “real” name and your “real blog” behind your claims.

a) We have paid salaries as recently as March, April, May and June 2009. The last payroll cycle ran on 5th June 2009. That is four months running. The owners and directors haven’t been paid but we haven’t complained.

b) In the last twelve months we have closed two licenses deals and four consulting engagements. Our current receivables stand at 150,000 US$ and our qualified pipeline is in excess of 500,000 US$. Our monthly cost base is a small fraction of our receivables and our pipeline. If you extend the window to 15 months, the number goes higher.

c) Yes we have outstanding dues from the really difficult months in December, January and February but 80% of these dues are to Directors and owners. Once again we haven’t complained.

d) About the trips to Dubai, Singapore and US that you have complained on other blogs. All of these were paid for by the clients who we do work for in Dubai and Singapore. And the last time I checked I haven’t been in the US in six years.

Please get your facts straight before you malign us. And if you still feel so strongly atleast do us the courtesy of putting your real name and your real intentions out so that the rest of the world can guage why you are so pissed at me.

Lots of love and hugs and kisses

DesiBackToDesh

It is now confirmed that the recent exit of two ppls ffrom IBM (one in KHI and the other immigrated to Canada) was because of having sex in the IBM elevator which was caught on tape. The guy was married with small kids and the girl is still unmarried. Both were asked to resign or they will be kicked out. Both resigned. The tape is available on utube for viewing.

I met with a representative of Si3 at their stall at Rozee Job Fair at Lahore. She was brand manager of Si3. My friend was very anxious about the company to know and to apply. We read a lot of interviews by its CEO and other success stories in different magazines and on blogs. I think she did a great job to brand it. And it was a great hype.

Only sufferers were the staff in all sections.
they (including me) didnt get their Provident fund amount till latest date that is 24-May-2011.