After 16 years, Skali’s listing on the horizon

  • Company is largest commercial open source player in South-East Asia
  • Hits targeted US$21.6mil revenue for 2013, cloud a major contributor
After 16 years, Skali’s listing on the horizon

SIXTEEN years after being part of the quintet that founded Skali, group chief executive Farith Rithauddeen (pic above) says the company is gearing up for a public listing in 2014, with Affin Merchant appointed as its merchant banker.
 
“We need to move up to the next level,” he says of the company that started out as the Asian-based mirror website for AltaVista, a search engine that was popular back in the mid-1990s.
 
Today, Skali has evolved into a cloud service provider, an ‘e-business enabler’ and “the largest commercial open source company in South-East Asia, with 400staff,” claims Farith.
 
With revenues of around RM60 million in 2012, Skali was aiming to hit RM70 million (US$21.6 million) this year, a target Farith confirms it has hit.
 
A chunk of that revenue comes from the tail-end of a US$79.6-million (RM258-million), six-year project that Skali Sdn Bhd won in 2007 and executed from 2008.
 
The Managed Portal Services (MPS) project involves developing and maintaining 150 government (at the federal, state and local council level) websites and portals. This was its single largest contract to date.
 
In the 2013 Malaysia Government Portal and Websites Assessment report, all of the MPS portals and websites were rated four-stars and above, with 96% rated five-star, compared with 90% the previous year.
 
It is an achievement Skali and Farith are proud of, but the future for the company is squarely on its cloud services and its web CMS (content management system) that it offers on the LifeRay platform.
 
LifeRay is a US company which in late 2011 was ranked by Gartner as being a leader in its Magic Quadrant for Horizontal Portals, along with the likes of Oracle and IBM.
 
Skali had previously built its own CMS on top of the JBOSS enterprise platform by open source pioneer Red Hat Inc, but found the going tough.
 
“We thus switched in 2009 and today have around 80 engineers who are certified and we are on the way to building our own applications on it [LifeRay],” says Farith.
 
With 30% of its revenues for 2013 coming from cloud-related services, it is no surprise that this is where Skali is focusing its attention. It already claims to be the first public cloud provider in Malaysia back in 2011, and this year has expanded its cloud offerings to Thailand via a partnership with a telco there.
 
In Malaysia, Farith says Skali has around 100 engineers focused on its cloud services with its 2,500 sq ft data centre in Cyberjaya the hub of it services.
 
He claims Skali has “a lot of customers,” including a state agency that has saved 60% of its cost by moving to the Skali cloud.
 
“It only has two peak usage months in a year, and by being on our metering model, where you pay for what you use, it has been a very happy customer,” he adds.

With 70% of Skali’s revenue coming from the public sector, it is imperative that Skali keep this segment very happy, be it through its cloud offerings or any other service –
especially with its MPS contract ending this month.
 
This metering model is offered on both its public and private platforms. For the public cloud, it is essentially where a customer buys a long-term contract and in return, Skali will install the required infrastructure at the customer’s premises and charge a lower price. The customer pays a minimal monthly fee and in the two peak months, simply pays for the resources it consumes.
 
Farith also contends that the existing service providers in the market do not offer the flexibility that the Skali cloud offers.
 
One of the models it offers in the public cloud is where customers get an alert to top up when they reach 80% of the capacity used up, he claims.
 
How will its listing help its cloud ambitions? Besides expanding its footprint to South-East Asia and the possibility of acquisitions, Farith is looking at deepening Skali’s relationships with some of its existing partners too, via a possible equity injection.
 
“We have been working together for years and the chemistry and relationships are strong, so why not?” he says.
 
Besides LifeRay as its technology partner, Skali works with 27 local partners, outsourcing RM40 million worth of work to them over the six-year period of the MPS, which mainly involves coding, content and translations in English and Bahasa Malaysia.
 
“This is all part of our industry development programme,” Farith says.
 
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