Business Today

Let us fix your PC

Two tech support companies aim at servicing computers, mobile phones and other gadgets you own.
Nandagopal Rajan | Print Edition: June 9, 2013

At the high-tech DLF Cybercity business park in Gurgaon, near Delhi, a bunch of boards in a new building block points to the offices of iYogi. No, the company is not in the business of yoga. Rather, it provides technical support over the telephone for computers, connected devices and smartphones in more than a dozen countries, including the United States. Set up in 2007, iYogi began offering services in India only this March. Why? "We had been thinking of starting in India for four years," says co-founder and CEO Uday Challu. "But as our international services were growing rapidly we thought we should consolidate those before looking at new markets."

The company's rapid growth is apparent from its financials, with annual sales touching $100 million (about Rs 540 crore). This has attracted a host of investors. iYogi has raised $72 million from venture capital firms Canaan Partners, Sequoia Capital India, SVB India Capital Partners, SAP Ventures and Draper Fisher Jurvetson. In the US, iYogi has a network of 15,000 technicians on retainership who are called as per the expertise needed and location. It employs around 5,000, and will recruit more for the India business.

A couple of kilometres away, in Gurgaon's Udyog Vihar, is the company that will be iYogi's main competitor in India, eTechies. Founded in 2010, this was the first branded multi-city tech support company in the country for individual consumers and small businesses. "We all quit cushy jobs to take up this venture," says CEO Rohit Chaudhary, who cofounded it with two others, Siddharth Bhatia and Samarth Goyal.

The trio had previously worked at outsourcing companies Spectramind and Quattro BPO. Old associate Rajan Anandan, who now heads Google India, soon came in as an angel investor. Venture capital firm Inventus Capital Partners later invested Rs 10.5 crore in eTechies. Today, eTechies gets up to 300 calls a day in six cities. It also hopes to expand overseas.

eTechies Set up in 2010, it provides services in six Indian cities
eTechies Set up in 2010, it provides services in six Indian cities. It is tough to build a subscription model (in India): Rohit Chaudhary, Co-founder and CEO, eTechies
Strangely enough, eTechies and iYogi are the only branded multi-city tech support companies in India that cater to individual PC users and small businesses. There are companies that provide the service within a city or a specific region, but none does so across the country. Companies like Hi-Tech Informatics handle multicity tech support for manufacturers, but never directly for the customer.

All major PC makers provide aftersales support to large clients, but they have not created a sustainable model to cater to the individual consumer. Such a consumer still relies on the neighbourhood technician to fix all problems he has with his PC, once the warranty on it expires. "The problem of providing tech support to large enterprises was solved a decade ago.

The question was how to solve the problem for individuals and small businesses," says Alok Mittal, Managing Director at Canaan Partners. "The key factors here are acquiring customers at a lower cost and then having a platform that can service a large number of customers in a standardised manner."

Apart from the fact that one focuses mainly overseas and the other on the local market, there are other key differences between the two companies. iYogi mainly provides remote service and sends technicians when required. eTechies uses remote support when home visits by technicians are not enough to solve a problem. Chaudhary says India is not ready for remote tech support alone.

iYogi's Challu disagrees. "In the US, over 90 per cent customers prefer solving the issue in an assisted do-ityourself format rather than getting someone home," he says. Challu is confident that iYogi's strategy of being a sort of family doctor for gadgets, with their technicians knowing the client history and the devices he owns, will work in India. Swati Sasmal, Vice President for Research and Consultancy at Kolkatabased market intelligence firm AMI Partners, feels the same.

"Remote support can be more appealing since it entails fast, effective and hassle-free solutions for consumers," she says. The two companies' payment models also differ. iYogi prefers subscription-based services, while eTechies thinks pay-for-service is a better option. "It is tough to build a subscription model," says Chaudhary. "With a five to 10 per cent renewal rate at the consumer level it is not very easy. But the subscription model can work with small businesses where the renewal rate is about 90 per cent."

iYogi plans to get customers to sign up for a subscription after the first service. Its annual package for individual customers in India costs Rs 2,599 (about $48), less than a third of the $169.99 it charges its clients in the US. It also has a pay-for-service model. eTechies charges upwards of Rs 1,500 for onsite tech support and Rs 600 for each remote support call.

eTechies caters to customers who run small offices and have multiple PCs, such as doctors and architects. iYogi is offering services to small and medium businesses with up to 100 PCs in the Gurgaon-Manesar belt. Vishal Dhar, iYogi's co-founder and President-Marketing, says the market to provide tech support to small businesses in India is worth at least Rs 10,000 crore. This is almost double the consumer market, he says.

Both iYogi and eTechies agree that sending technicians to customers' homes is risky, as they can do freelance work on the side or come to their own arrangements with clients. So iYogi engages in a three-way conference call with the client and technician while eTechies uses an application downloaded on the technicians' phones to track them real time.

Will the two companies be able to exploit the vast opportunities available? Their record so far suggests they have a very good chance.

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