Infusion Development Corp.’s North American partnership with Microsoft opened doors in Dubai.
Leaning on its big New York bank clients introduced Infusion to international banking circles in London, where Barclays became a client.
And now Infusion’s Toronto-based president, Alim Somani, is eyeing other international expansion opportunities. With some assistance from early made connections.
For small to mid-sized enterprises, doing a great job for big-name clients close to home and then leveraging those relationships to expand abroad is a savvy way to grow, economist Jayson Myers, head of Canadian Manufacturers & Exporters, one of the country’s biggest industry groups, said in an interview.
“Often the best sales strategy is not going directly into new markets, but it’s leveraging up your existing customers. We are seeing this in a lot of manufacturing sectors, in a lot of technology companies. We [Canadians] have very, very good products, but often these products have to be packaged or integrated into a bigger service for customers.”
That was Mr. Somani’s experience in Dubai. Three years ago, he dropped in on the local Microsoft office while working on a community service project. Already an enthusiastic adopter and promoter of Microsoft products in North America, where Infusion is recognized as a certified partner, Mr. Somani wondered about the prospects in Dubai.
“If you are coming to Dubai just to do software development, there are lots of companies that do that. India is only three hours away,” Mr. Somani recalled being told by the Microsoft manager there. “This is a market where there is a hunger for innovation; they are interested in pushing the envelope in Dubai,” he remembered being informed.
Microsoft had just launched a new product called Surface, a table-top touchpad technology that allowed corporate clients to load with product information, videos and other interactive applications.
Mr. Somani helped Microsoft introduce Surface in Dubai, gaining new business leads for Infusion in the process of pitching Microsoft’s product. “We spent the next year visiting with different clients, kind of doing business development, learning the region and slowly deploying people on the ground in the region,” he said.
This led to a business relationship with the Jumeirah Group, a giant that operates luxury hotels and resorts around the world. “They have this vision of really being able to distinguish their brand through technology. We hit it off with them and they became our first partner in the region. We redid their website, which subsequently won some awards … and that really opened the door for us with other clients.”
Mr. Somani was an electrical engineer straight out of the University of Waterloo when he was recruited in 2001 to head the fledgling New York software development firm’s Canadian operation.
He and three young cohorts started small. To save money, they painted their own office space in Toronto’s Spadina Avenue tech corridor.
They built the business step-by-step, gaining traction as an inexpensive “nearshore” information technology option for Wall Street financial institutions, back in the day when the Canadian dollar was trading below 70 cents (U.S.) Each big client led to international prospects, which led to growth.
Today, 175 of the company’s 350 employees work out of the Toronto office, which serves Infusion’s global clients. “This year, we grew 46 per cent, so we are going to finish the year having $53-million (U.S.) in sales,” Mr. Somani said in an interview – on the eve of a business trip to Dubai, where luxury hotel operator, Jumeirah Group, has become a pivotal client.
And that, as goes the formula, is leading to other growth opportunities.
Since its formative days in New York and Toronto, Infusion has established offices in Dubai, London, Houston and Boston, and is the process of setting up shop in Krakow, Poland. Mr. Somani is a big believer in having “feet on the ground” and hiring local talent in the regions his company serves.
“This model has worked for us,” he said.
There is a lot of risk in entering new markets – “finding the right customers, the right suppliers, dealing with regulators, dealing with border issues,” Mr. Myers said. “I think it’s important to look for partners who can help you.
“It is a very effective strategy to look at leveraging your existing customers, especially your domestic customers,” Mr. Myers added. “If you can provide them a solution for their export customers, then you can begin to develop a pretty good export business based on that supply chain.”
Breaking in
Assess the risks: “It’s really important for businesses [considering international expansion] to sit down with other executives who are already in those markets and talk to them about what’s the best way to set up, and what are some of the issues around intellectual property, importing and exporting, patriating profits, treatment of investments and things like that,” Jayson Myers, president of Canadian Manufacturers & Exporters, said.
Till the ground: “A lot of companies make the mistake of just setting up a sales office, announcing that they are open for business and expecting that the money will flow,” Alim Somani, president of Infusion Development Corp., said.
It can take years to build trust and business relationships in regions that have only recently opened their markets to foreign companies. Infusion’s approach to building business abroad includes hiring and developing local talent. “Just as you nurture relationships with clients, you start nurturing relationships with the recruiting market.”
Understand the supply chain: “I took a company that specialized in water remediation technology to Hong Kong last year. They had a meeting with the public procurement people in Hong Kong, and the government said, ‘This is one of the best technologies we have seen in water remediation, but we don’t buy technologies, we buy turn-key packages and we go to an environmental engineering firm for that,’” Mr. Myers said. “You need to understand the supply chain and procurement policies.”
Virginia Galt
