R. Ramaraj

CHENNAI: After being with the company since its inception, R. Ramaraj has quit as the Chief Executive Officer (CEO) and bid bye to Sify Ltd. Following this development, Chairman Raju Vegesna has also become the Managing Director and CEO of the company. Mr. Ramaraj, however, will work as a consultant for an interim period to see Sify through the transition smoothly.

Promoter Mr. Vegesna steps in to take over operational control even as a few top officials of the company have indicated their desire to pursue greener pastures. Among them are: Ajit G. Abraham, Chief Human Resources Officer, Rahul Swarup, Head of Enterprise Business, Rustom Irani, Chief Technology Officer (CTO) and Durgesh Mehta, Chief Financial Officer (CFO). Even as Mr. Abraham and Mr. Irani are expected to leave the company in a month or so, Mr. Vegesna-led team is reportedly pressing Mr. Swarup and Mr. Mehta to stay put. Sources said a few more senior officials from the finance and technology fields have indicated their desire to quit.

Interestingly enough, the announcement of Mr. Ramaraj's resignation came on a day when the company released its first quarter result for the year.

Sify reported revenues of $28.74 million for the quarter ended June 2006, up by 29.1 per cent compared to the same quarter last year. The sequential growth in revenues over the previous quarter was 2.5 per cent. The cash profit, in adjusted EBITDA (earning before interest, tax, depreciation and amortisation) terms for the quarter was $4.03 million, an increase of $3.71 million compared to the same quarter last year. The net profit for the quarter under U.S. GAAP was $1.36 million compared to a net loss of $2.14 million in the first quarter of the previous fiscal year. The company has ended the quarter with a cash balance of $55.27 million after capital expenditures of $6.7 million.

Mr. Ramaraj moves out as Sify begins to see profit. "We have come out of tough times. The company is on a good wicket," he told this correspondent. Mr. Ramaraj said he would help small entrepreneurs scale up their businesses. Notwithstanding the depth in the management within the organisation, the imminent departure of top officials may yet pose a big challenge for the Mr. Vegesna-piloted new dispensation. Long-time industry watchers are keenly awaiting the direction the new team will give to Sify.

Highly placed sources said a combination of factors ranging from cultural incompatibility to lack of an appraisal-based incentive system and severe belt-tightening exercises have led to a want of drive among the senior management, resulting in the current exodus.

Mr. Ramaraj has been the face of Sify since its inception. He was largely responsible for making Sify the first in country to launch Internet Protocol Network at a time when Internet itself was still an untested phenomenon. Today, Sify is the largest player in the IPVPN (Internet Protocol Virtual Private Network) space. Even when it was nascent and dabbling in an unknown field, he was able to bring a good crop of talent into Sify. It was Mr. Ramaraj who saw the potential in Internet cyber café. Those who worked closely with him in the early days agreed that it was he who was largely instrumental in Sify capturing the imagination of the Indian corporate world by getting the company listed on Nasdaq. In the past few years, however, uncertainty over the ownership of the company had its own impact on Sify. "Yet, he kept the ship cruising and shored it to safety," observed an ex-official of Sify.

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