POWER NET CONSULTING: The IT&C Market Depends on Projects Based On Structural Funding

• (An interview with Eduard Dimitriev, Managing Partner and CEO, Power Net Consulting)

BURSA: What does it mean to be a provider of integrated IT solutions on the Romanian market? What are the difficulties and challenges to be faced in this industry?

Eduard Dimitriev: This is an increasingly popular concept among beneficiaries, who prefer more and more often to sign one contract with one company and receive a turn-key solution, to go to a single source to find solutions to all the problems related to the roll-out, maintenance and subsequent development of the selected solution. The difficulties are caused by how this type of business is understood. It is a matter of managerial culture. The integrator of an IT solution is a project manager, who makes use of their own competencies and of those of several subcontractors. There are several challenges as one needs to find a collection of competencies in the respective field of business, a number of subcontractors to cover any potential requirement of the customer. Coordination and the pricing policy are key.

BURSA: How do you see the development of the market this year, compared to the past 2-3 years?

Eduard Dimitriev: In the best case scenario, the market will stagnate. The pessimists even see a slight decrease. The actual development will also depend on the performance of the market for projects based on structural funding in the second half of the year. The current crisis comes at a very bad time, because the market for integrated projects designed to develop IT solutions was picking up well in the past couple of years. Even last year, the market saw the first truly integrated projects that included entirely new architectures and software solutions to answer challenges related to security, network management, equipment management and storage, including data centres.

BURSA: What are your projections about the performance of your company this year? What are your expectations regarding the turnover in 2009, compared to last year?

Eduard Dimitriev: Our projections point to 80% of the turnover we had in 2008, that is, 27.5 million EUR last year and 20-21 million EUR this year, but we will be happy if we manage to maintain the turnover the same as it was in 2008.

BURSA: How is the crisis impacting companies in this industry in Romania? How is it impacting the business of Power Net Consulting?

Eduard Dimitriev: We are able to see a setback in the planning of several investments and projects that had received the green light for this year. For the time being, we have managed to avert the effects of the crisis, as we have been involved in projects that started in December 2008 and are planned to be rolled-out in 6-7 months. In the meantime, the emergence of new projects has given us work to do until after September 2009. The end of the year figures will be essential for knowing exactly whether 2010 is going to bring the end of the crisis or its prolongation.

BURSA: What are the "winning" IT services in the battle against the economic crisis?

Eduard Dimitriev: The winning services are based on offering turn-key solutions on demand, solutions that comprehensively cover the needs of the customer for a competitive price and are capable of generating rapid return on investment. However, the time for fairytales is over and all this needs to be proven to the customer. The customer needs to see the net benefits of the solution, as well as the amortization time and the return time.

BURSA: What kind of partnerships are you counting on this year: those with public institutions or those with private customers? What would be the motivation?

Eduard Dimitriev: We hope that the split between public and private customers is going to balance. For the past few years, the ratio has been 60% in favour of the public customers, but now the private sector has started paying more attention to intelligent IT solutions. The motivation for partnerships in the private sector is easy to understand as the availability of structural funding for various axes co-financed by the EU is stimulating the small- and medium-sized businesses.

BURSA: What is your company"s investment calendar for this year?

Eduard Dimitriev: Our plans for this year are to invest only in infrastructure and human resources. We want to consolidate our team with new certified and qualified members. We also intend to create the most flexible architecture we can achieve in terms of availability (hardware, software and services) in order to be able to rapidly answer any requirement in this area.

BURSA: What is the best case scenario for Power Net Consulting in 2009? And the worst case scenario?

Eduard Dimitriev: The best case scenario points to a turnover of 27 million EUR. In the worst case scenario, we will only make 20-21 million EUR.