5-year plan for ex p andin g into managed ip infrastructure services

5-Year Plan for Expanding Into Managed IP Infrastructure Services

10 March 2006

The information provided in this business plan is confidential. Please do not disclose it to anyone without checking with me first. Thanks.

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Overview

Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info

Key Assumptions

1. This company is currently successful in selling and supporting computer HW/SW

2. This company possesses a long list of repeat corporate clients

3. This company wants to improve her profitability through an entry into the more lucrative and rapidly-growing local and regional market for high-quality IP infrastructure

Summary … Company … Services … Market Analysis … Strategy … Financials

Managed IP Infrastructure Services

A provider of secure, managed, guaranteed-high-availability IP infrastructure and applications

Focused on the financial, telecom and oil & gas sectors

Sales, support and training presence in Lahore, Karachi, Islamabad, Dubai, Dhahran and Beijing


Mission

Planned and sustained growth in:

Number of professionals

Revenue per professional


Mission

Build lasting relationships with our clients by consistently exceeding their expectations


Key Objectives

1st Year 5th Year

Number of Professionals 15 177

Revenue (million PKR) 38 1,841


NOTE: These objectives do not assume the offering of managed services

Strategy

SalesDevelop partnerships with Cisco and NCR; They will do the sales for us.

SectorsFocus on FDI-rich sectors: telco; financial services; oil & gas

Cultural Focus Speed through innovation; Craftsmanship

HR Retention Ensure professional growth

HR Growth Stand-alone training center; Dubai center


Main Risks

Short Term None

Long Term Growth in the number of professionals


Overview


Key Assumptions

1. This company is currently successful in selling and supporting computer HW/SW

2. This company possesses a long list of repeat corporate clients

3. This company wants to improve her profitability through an entry into the more lucrative and rapidly-growing local and regional market for high-quality IP infrastructure


Growth Path

Dubai

TRAINING

CENTER

Dhahran Beijing

Lahore

KarachiIslamabad


Growth in the Number of Sales/Engineering Professionals

1st Year 2nd Year 3rd Year 4th Year 5th Year

Lahore 10 20 30 40 50

Karachi 3 20 30 40 50

Islamabad 2 4 6 8 10

Dubai - 4 8 10 12

Dhahran - 2 3 4 5

Beijing - 5 20 30 50

Total 15 55 97 132 177

Training Center 2 4 6 8 10


Start-Up Expenses

Cash required for first year’s operations:PKR 20 million

Net expenses for running first year’s operation:PKR 3 million


Overview


Service Description

We will provided services for the deployment, monitoring, maintenance, and up-gradation of IP infrastructure

The reliability of our deployments and speed of our execution will be our hallmark

Our focus will be on IP infrastructure and services for the financial, telecom and oil & gas sectors


Deployment/Maintenance, then Managed Services

Our initial focus will be on deployment, maintenance and network/information security

Later we will move into managed IP services. Managed services’ customers want service providers to not only deploy, but also manage their network infrastructure/applications (e.g. VPN, IP telephony) to reduce costs and improve reliability as well as security.


List ofServices

LAN WAN Enterprise Networks Core Networks

Wireless Networks Fiber Optic Networks VPN IP Telephony

IP Contact Centers Video Conferencing Network Security Monitoring Information Security Management


Competitive Comparison (1)

The competition comes in several forms:

No competition at all:

– In-house team

– Most significant

– Disadvantages: Inefficiency; High employee turn-over

– Our advantages: Focus; Speed; Cost; Long-term support



Large, multinationals (e.g. NCR):

– Disadvantages: Generalists; They drive their clients; Cost; Lack of innovation

– Our advantages: Specialists; Innovative solutions; Speed; Managed services



Local companies

– Not many, yet! Unable to meet even the local demand

– Disadvantages: Unplanned growth; Having problems in attracting/retaining talent; Focus on low-end deployments; Lack of control on cost/schedule/quality

– Our advantages: Sector focus; Methodology fine-tuned for speed; Focused on attracting/retaining talent; High-end services (managed, security); Strong project mgmt.


Overview


The Business Opportunity

Spending on IP infrastructure is increasing in Pakistan as well as the surrounding region (e.g. look at Cisco’s sales-team growth in Pakistan)

The convergence of voice and data networks requires corporate data networks’ up-gradation

The difference between supply and demand for IP services is widening with time


Summary

We will be focusing on medium to large organizations

The reliability of our deployments and speed of our execution will be our hallmark

Our focus will be on IP infrastructure and services for the financial, telecom and oil & gas sectors


Market Segmentation

Focused on long-term ROI. Security is a key focus area.

Medium-size Organizations

Large Organizations

Interested in the lower costs offered by managed services.


Types Our Contracts


We will be responsible for the deployment, 24x7x365 performance and security monitoring, maintenance, up-gradation, and meeting SLA targets.

Turn-Key ProjectsManaged ServicesWe will deploy and then handover the system to the customer. We will also provide on-demand maintenance.

Overview


Why Pakistan?

The IP infrastructure is growing at a brisk pace in Pakistan as indicated by Cisco’s order-of-magnitude sales-force expansion

Same is happening in the region surrounding Pakistan.

The number of quality EE/TE/CE graduates is set to get a boast due to the launch of new programs at universities like NU (Lahore, Karachi, Islamabad, Peshawar), LUMS, and others


Selling Our Services

Our services will be sold mainly on a word-of-mouth basis, with relationships with our partners/end-users and past experience being the important factors

The key to a favorable decisions made by our initial clients and partners will be based the trust in the professional reputation of the company


Sales Strategy

We will start the sales effort in Lahore, followed by Karachi, Islamabad, Dubai, Dhahran, and finally in Beijing

Our initial focus will be on building strong partnerships with companies like Cisco and NCR. They will play a key role in brining us high-value customers.

The emphasis in Dubai, Dhahran, and Beijing will be on finding local partners of high repute along with leveraging our relationships with Cisco/NCR, etc.


Sales Supplements

The business expansion will begin with additions to the corporate Website establishing the positioning, followed by a printed brochure


Certification/Partnership Target

Year Certification/Partnership

1 ISO9001:2000

1 Cisco Premier Partnership

2 Cisco Silver Partnership

3 Cisco Gold Partnership


Revenue Growth Per Professional

Our key corporate goal is to systematicallyincrease the overallper (sales/engineering) professionalproductivity

0

4

8

12

1 2 3 4 5

Year of Operation

Targets for Revenue-per-Professional (Million PKR)

+20%

+20%+20%

+20%


Revenue Forecast(million PKR)

0

500

1,000

1,500

2,000

1 2 3 4 5Year of Operation

NOTE: This forecast do not assume the offering of managed services


Overview


Forecasts:Revenue, Pre-Tax Profits

-500

0

500

1000

1500

2000

1 2 3 4 5

Year of Operation

Mill

ion P

KR


NOTE: This forecast does not assume the offering of managed services

Investments

NPV @ a discount rate of 17% PKR 247 million

1st Year

PKR 3 million

Returns Over Five Years


NOTE: These numbers do not assume the offering of managed services

Financial Worksheet

RevenuePakistan 5x15x0.5 38 6x44 264 7.2x66 475 8.6x88 757 10.4x110 1,144Overseas 6x11x0.5 33 7.2x31 217 8.6x44 374 10.4x67 697TotalCapEx for Training Lab/ Workshop EquipmentPakistan 5 5 5 5 5Overseas 5 5 5 5TotalCost of Workforce (salary, rent, utilities, computing, travel, support-staff)Pakistan 0.6x15 9 0.72x44 53 0.864x66 57 1.032x88 91 1.248x110 137Overseas 1.44x11 16 1.728x31 54 2.064x44 91 2.496x67 167TotalCost of Equipment Sold (70% of revenue)Total 26 208 485 792 1,289TotalPre-Tax Profit

Operating Margin

NPV @ 17%

148

All currency figures in PKR millions

9 69 111

4th Year 5th Year

238

1st Year 2nd Year 3rd Year

485

38 297

5 10

792 1,28926 208

(3)

-7% 4% 13%

10 87

13%24713%

182 305

692 1,131 1,841

10 10 10

The number ofprofessionals isshown in bold

Start-up year’sramp-up discountis shown in italics

NOTE: This worksheet does not assume the offering of managed services

The Training Center

A non-for-profit, stand-alone, self-sustaining operation in Pakistan – focused on the training of networking professionals for our staff as well as others

Training will be provided by full-time trainers as well as members of our installation/maintenance engineering staff

Joining the Cisco Networking Academy program is an option as well. It will, however, require the registration of a separate non-profit entity.

5-year plan for ex p andin g into managed ip infrastructure services

Documents

regional market

computer hwswthis company

corporate clientsthis

offering of managed

long list

training presence

years operations

business plan