Philippine software firm eyes China, Middle East

Local software company, Guarango Software, is seeking to expand its global presence by acquiring local partners in developing markets.

PHILIPPINES--Local software developer Gurango Software is aiming to expand in China and the Middle East as part of the company's efforts to further its global presence.

In a press briefing Monday, the company said it is looking to aggressively expand by acquiring local partners. It currently has country offices in Singapore, Australia and South Africa, and is best known as a local premium partner of Microsoft.

Joey Gurango, CEO of Gurango Software, said the company's preference is to take a "100 percent" stake in the foreign partner-organizations to allow Gurango Software to enter new markets.

Gurango said the company's business model remains the same, adding that all its products and services will be delivered from the Manila head office to the respective markets.

The software maker is one of only a handful of Filipino companies that are aggressively buying controlling stakes in foreign companies to allow it to enter previously untapped markets.

Gurango Software is looking at "developing markets" as its primary target for its expansion, Gurango said, adding that Middle East and China fall under this category.

China, he said, is "unique" because market demands vary significantly from one major city to another, unlike other countries which generally have the same requirements across their market.

"We look at China as not a single, large market, but as a market with multiple, unique needs," Gurango said.

He said the company will continue its strategy to take over or buy controlling stakes in foreign businesses to expand its reach.

Revenues and forecasts
Gurango Software specializes in developing and licensing applications based on Microsoft Dynamics, and is currently the top reseller of this application suite in the Philippines. Most of its revenues are generated from exporting its software to foreign markets, according to the company.

Gurango Software reported a 10 percent revenue increase, year-on-year, and a first-quarter earning of some 7 million pesos (US$161,000). The company is forecasting a 500 percent increase in revenue for 2009, or some 270 million pesos (US$6.2 million). A bulk of the revenues came from software licenses, the company said.

According to Gurango Software COO Fermin Taruc, the company differs from other valued-added resellers (VAS) because it is investing heavily on intellectual property rights for its software products.

Taruc said sales of licenses have already exceeded targets and increased ten-fold from last year's figures.

CEO Gurango said the company is also considering an initial public offering. "My first priority is to list on the local bourse," he said. "But if we can't list on the local stock exchange, then will explore other options."

However, he ruled out an IPO exercise this year, and declined to disclose further details.

Joel D. Pinaroc is a freelance IT writer based in the Philippines.