ComArch rakes in foreign contracts
By Aleksander Nowacki
Following the announcement of its contract with the U.S. state of Washington, ComArch last week signed five more deals with companies from four different countries. The Kraków-based software producer and integrator may well triple its exports to 18 percent of its revenue, from 6 percent last year.
The company signed two contracts with German mobile phone operators, worth E400,000 (zł. 1.78 million) and E120,000 (zł. 532,000) respectively, for deliveries of its original billing software. In the same week, ComArch signed deals with cell phone operators in Belarus and Ukraine, worth $400,000 (zł. 1.55 million) and $96,000 (zł. 372,000) respectively, and extended its contract with the national operator of Nicaragua for an extra $750,000 (zł. 2.9 million).
Most important of all, ComArch won the contract to supply the state of Washington, Microsoft's home state, with software to administer its government telecom and computer networks. The deal, worth $2.2 million (zł. 8.5 million), accounts for no more than 7 percent of the company's annual revenue, but it carries kudos for the company.
Janusz Filipiak, ComArch president, said it is the company's long-term strategy to increase the share of exports in its revenue structure. He was, however, adamant that it is no way an attempt to evade the troubles experienced by the domestic IT market.
"It's a theory our competition is promoting," he said. "That we can't cope on the domestic market so we have to look for business abroad." He went on to say that the company's domestic sales were on the up as well. The first quarter of the year was an improvement on the previous quarter and the second one would be better still, Filipiak predicted.
One of the major motives for ComArch's export drive seems to be an attempt to gain prestige.
"We design software rather than just specializing in the implementation of a ready-made product," he said. "As with any other good, we operate on a global market."
Filipiak admitted, however, that it is not easy for a company from a relatively small country, not usually thought of as standing at the vanguard of high tech development, to make its mark on foreign markets.
"It was hard at first, just fighting for basic recognition," he explained.
Three years later the company has perhaps made its first big break in terms of prestige, in the form of the Washington contract.
"Entering a foreign market is always a challenge," said Michał Janik, analyst at BDM PKO BP. "Usually it is done with a foreign partner. In this case ComArch is going it alone."
Still, Filipiak said of the E120,000 deal with the German mobile operators: "We're from Poland, so at first it's a small contract as they're looking to minimize potential losses. If everything goes well, we can go full steam into the market."
According to Filipiak, the company is to post a 20 percent higher net profit this year compared to last, while its sales are expected to rise by about the same margin.
