BANGALORE, INDIA (10/10/2000) - E4e Inc., positioned as a technology holding company for startups offering Internet-based infrastructure services, Tuesday launched a Bangalore arm as part of its international expansion strategy.
Starting with capital of US$125 million, the Santa Clara-based company, with a subsidiary in Bangalore, aims to create a network of complementary companies with a common customer base. These companies will leverage India's technical and managerial skills and the ability to offer "24 x 7" (all day, all week) operations to deliver services remotely from India to both enterprises and communications carriers in the U.S. and Europe.
In the computing utility model that is emerging, customers do not want to build their own infrastructure, but instead use services such as data center hosting and application services, Kilaiyur Balakrishnan Chandrasekhar, chairman and a cofounder of e4e, told IDG News Service.
"E4e will be the platform for companies offering new kinds of services, across a wide range of industries with very specific requirements," he added. Chandrasekhar is also the founder of Santa Clara-based Exodus Communications Inc, a leading provider of Internet hosting for businesses, and founder and chief executive officer of Sunnyvale, California-based ASP (application service provider) aggregator Jamcracker Inc.
The new model of services companies also requires different kinds of financial and other support that venture capitalists cannot provide, according to Chandrasekhar. "Traditional venture capital was all about technology development, which worked wonders when you are developing technology for a user because he was his own integrator," added Chandrasekhar. "But in a world where the customer doesn't buy a technology anymore but a utility, you need a longer term operating model, which means that you need to work with the entrepreneur to ensure that the capital is long-term capital. Also a higher level of synergy is required with other companies in the portfolio to make it happen."
E4e Inc. is part of Chandrasekhar's bid to create an ecosystem of companies. One of the first companies that e4e has invested in, Bangalore-based software development and systems integration company Aztec Software and Technology Services (P) Ltd., is already a technology solutions partner for Jamcracker and some of its customers. "It is quite likely that Jamcracker will be a channel for some of the utilities offered by the services companies that e4e invests in," added Chandrasekhar. Jamcracker and some of its partners already use Exodus hosting services.
E4e's investors include both individuals and venture capitalists like California-based Walden International and Global Internet Ventures in Bethesda, Maryland. "Venture capitalists invest in technology companies, and all of these technology companies need service companies to deploy their solutions, their products," said Somshankar Das, president and chief executive officer of e4e.
In the first phase, e4e will focus on startups that offer services such as network management services, wireless data services, managed information technology services and customer relationship management (CRM) for the financial and telecom services sectors, as well as e-business consulting and implementation services, according to Das. Although e4e Inc. will invest primarily in services startups, it will also fund companies that build technology of relevance to service providers. "We will get into products and technologies that can give our services companies an edge," said Sridhar Mitta, managing director of e4e Labs Pvt Ltd., the Bangalore-based subsidiary of e4e Inc. E4e will also invest in companies that offer market access, for instance, the company's investment in Peak XV Networks, a California-based network outsourcing company.
E4e Labs is also doing technology development, said Mitta. These technologies will then be transferred to the services companies. E4e plans to invest about $300 million in about 12 companies in the next three years, according to Das, who added that the funds may be used also for acquisitions of technology or services companies.
E4e Inc. in Santa Clara, California can be reached at +1-408-764-5100 or http://www.e4eventures.com/