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| June, 1999 Volume 5, Number 6 HOME EDITORIAL COVER STORY SPECIALS IMMIGRATION EVENTS CLASSIFIEDS HEALTH ARCHIVES |
Cover Story
SMART MODULAR TECHNOLOGIES: Staying Smart in
the High-Tech World All's well that ends well. It is good that Ajay Shah's previous employer, Samsung, was not interested in Shah's idea of memory modules manufacturing, 11 years ago. Had it been the other way, perhaps Shah would not have thought of starting his own company, SMART Modular Technologies, Inc., to give life to his ideas. Founded in 1988 by the young trio Ajay Shah, Lata Krishnan and Mukesh Patel, SMART is a leading independent designer and manufacturer of memory modules, flash memory cards, embedded computers and communications products. SMART's commitment to quality, advanced technical expertise, fast time-to-market, build-to-order flexibility and unparalleled customer service have propelled its growth over the years. The Smart Trio Ajay Shah, Chairman, President and CEO of SMART Modular Lata Krishnan, one of the co-founders, who is also the wife of Ajay Shah, graduated from the London School of Economics. Prior to co-founding SMART, she served in corporate accounting and held finance positions at Montgomery Securities and was a tax accountant in the Hill Vellacott & Company, London, England. She is a member of the Institute of Charted Accountants in England and Wales. At present she is the vice president, human resources and administration. Mukesh Patel, Vice President and General Manager of SMART, is another co-founder of SMART. He has been a friend of Shah for 14 years and was a colleague at Samsung. He has a digital electronics background and the technical strength of the company lies in him.
Shah raised a capital of $120,000 from friends and family, Krishnan composed a business plan and Patel worked on the technical side and the smart trio successfully launched the SMART Modular Technologies, Inc. in Fremont, CA, in the summer of 1988. The Company Founded as an independent memory module maker in 1988, SMART has grown
significantly since its beginning. In 1995, SMART stepped into the fast-growing
communications industry by acquiring Apex Data, Inc., a manufacturer of wireless and
wireline data/fax modem and connectivity devices. SMART went public in 1995. Started with just three people, SMART's employee strength has now grown to 1700 including those in the offshore offices. The company's revenue has gone beyond its expectations and a 73 percent revenue increase from $401 million in 1996 to almost $700 million in 1997 shows how well the company is managed. The company has four manufacturing units in Fremont, CA; Aguada, Puerto Rico; East Kilbride, Scotland; and Penang, Malasia. Its state-of-the-art design centers are at Bangalore, India, and Fremont, CA. It has its sales offices in the U.S., U.K., Australia, Germany, France, Malasia and Singapore. The company spends on R&D in proportion to its sales. The company has one issued patent and it expects to file new patent applications where appropriate to protect its proprietary technologies. SMART's employees are of multicultural background. It is advantageous to have a cosmopolitan atmosphere. We are an international company, manufacturing in many locations. Our customers are all over the world and they should feel comfortable with us. So it is advantageous to have a multicultural, cosmopolitan team of employees. Moreover, I enjoy this atmosphere. Personally it is very stimulating for me to work in such an atmosphere. This is one of the things that Silicon Valley brings, comments Shah. Partners and Customers SMART has the world's premier technology leaders as its key partners: Intel, Microsoft, Hewlett Packard (HP), Motorola, IBM, Rockwell, Nokia, Rambus, Ericsson, Ascend, Phoenix Technologies, WindRiver, VentureCom, Lucent Technologies and AMD. SMART works in tandem with its partners to deliver memory modules, memory cards, I/O products and embedded computers to advance the world's high-tech end-user applications in the PC, server/workstation, networking /telecommunications and electronic consumer good sectors. When companies partner with SMART, they do so with a high degree of confidence in its long-term stability, success and strength. Some of SMART's big customers are Compaq, HP, Cisco Systems, IBM, Toshiba America Information Systems Corp., Fujitsu and NCR. Awards Won SMART has been recognized as one of the Fortune magazine's 100 fastest growing public companies. For the past four years, Deloitte & Touche has marked a place for SMART in the Silicon Valley Technology Fast 50, a list of the 50 fastest growing technology firms in the region. SMART was also awarded the prestigious Gold Circle Award, granted only to six companies that have experienced exceptional revenue growth within the past eight years. In recognition of the company's innovation in design, quick turnaround and cost-effectiveness, SMART was named Supplier of the Year by Cisco Systems, Outstanding Supplier by NCR and was also recognized by NCR for innovation in designing custom memory modules by NCR's WorldMark servers. Competition SMART is coming up in a highly competitive market. In the memory market, SMART competes with semiconductor manufacturers such as Samsung which maintain captive memory module production capabilities. It also goes head to head with independent module makers such as Celestica Inc., PNY Electronics, Inc. and Simple Technology, Inc. In the computer systems reseller market for memory modules, the company competes primarily with Kingston Technology, Viking Technology and Vision Tek. Within the embedded computer subsystem market, SMART competes mainly with Force Computers, Motorola and Radisys. In the communication card market GVC, TDK and U.S. Robotics, Inc. are the competitors of SMART. SMART's Products SMART is an independent manufacturer of a 500-item product line, including memory modules, flash memory cards, high performance embedded computer modules and I/O product solutions. SMART's products are designed and built into a wide variety of technology products. Some products work behind the scenes, performing critical business, medical and telecommunications functions inside end-user applications. Others are used in consumer applications such as digital cameras and cell phones. SMART's custom and application-specific memory modules are generally used in mobile computers, workstations, servers and telecommunications devices such as routers and switches. The company's standard memory modules are typically used in desktop personal computers and printers.
Key Strengths One of the key strengths of SMART is its management team that retains up to date knowledge of every aspect of the business and the market. The three founders not only get along well but they are also very good friends. This has done the company a world of good. The Shahs maintain such a degree of professionalism that very often employees don't remember or know that they are married. During staff meetings every one has a say and no one addresses Krishnan as Shah's wife or him as her husband. They have their individual responsibilities and they work towards what is good for the company. Mukesh is the technical strength of the company. I don't think either of us could have been successful in this company without the other, says Shah, who feels that it just so happens that because he is on the marketing side and Mukesh is on the technical side Shah has been elected and identified as the spokesperson. On the other hand, Patel feels that Shah is very knowledgeable of market situation and the technology, and this allows him to understand what is going on throughout the company and get involved with the customers. Patel also appreciates Shah's strong work ethic which serves as an inspiration for SMART's employees. No matter how busy he is, Shah always finds time for his employees and he shows genuine concern for their issues and problems. Shah is an active leader who remains informed and involved in all aspects of his company. His hands-on style is a great strength for the company. Shah is imaginative, practical and conceptual and he has a clear vision and is a strategic thinker. SMART has always been good in picking up the right people. Its employees are technically very strong and their success has led to the success of the company. What makes SMART unique? Shah proudly answers: It is our everyday activity of executing well. Our position has been based on strength and execution. Anybody can put out a press release, they must be able to deliver, and SMART delivers. When asked for the reason for his success Shah says, It is no magic. It is the same old thing of throwing a bit of hard work and having a bit of luck. I would say focused effort is very important. We are not running after all kinds of opportunities. We are very focused on a few opportunities and concentrate on them. For New Entrepreneurs Being focused and willing to compromise are important for a business person in Shah's point of view. He advises the would be entrepreneurs not to start a company thinking that they are going to make lot of money. Those who start a business with that attitude usually fail. One has to enjoy it and the rest comes later. You have to take risk. Now for the Indian community there are so many opportunities and we have the benefit of, I would say, positive discrimination. In fact we have a good reputation. So keeping that reputation from the ethical stand point is extremely important. The moment we lose that reputation we will have negative discrimination. Today it is positive. Make use of it. Throw a bit of hard work and be focused in what you want to do. You have to work at it and think about how to position yourself in the industry. And finally it is your luck, advises Shah for those who want to become entrepreneurs. Did you like this story ? |
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Technologies, was born in 1959 in Kampala, Uganda. He holds a
bachelor's degree in engineering from the University of Baroda, India, and a master's
degree in engineering management from Stanford University. He held marketing management
and engineering positions at Advanced Micro Devices, where he was involved in all aspects
of the company's operations, from wafer fabrication to product marketing. Later he held
strategic management and product line management positions at Samsung Semiconductor, Inc.,
where he was responsible for all new semiconductor memory product development and managed
Samsung's leading line of memory products. Shah is the director of TiE and he is actively
involved in organizations promoting education. Traveling and reading are his hobbies.
It is interesting to note that all the three founders are Indians, who were
born in Africa before they went to India and then moved on to the U.S. Perhaps the
similarity in their backgrounds kept them together. Their partnership began in 1988 at
Samsung when the Shahs and Patel were co-workers. Mukesh and I were involved in memory
business in Samsung. He had more technical background. He was more into design and product
engineering and application engineering. So as a result, we had a good idea of the
marketplace. We saw an emerging market for memory modules which was not addressed
adequately, says Shah. At that time our employer was not interested in our idea. So we
decided to do it by ourselves.
The
company's acquisition of RISQ Modular Systems, Inc. in 1996 further expanded SMART's
product line to include embedded computers, which are products designed to meet the
computer-intensive requirements of the telecommunications, networking, industrial control
and image processing markets.
SMART has three products divisions: memory
products division, embedded computer division and communications division. The memory
products division delivers memory modules in SIMM, DIMM, SO-DIMM, RIMM and custom form
factors that utilize the latest SDRAM, DRAM, Rambus, SRAM and flash memory technologies.
It also supplies flash memory cards in PC card, compact and miniature form factors. The
communications division markets wireless and wireline data/fax modems, connectivity and
communications devices for both desktop and mobile computing markets across critical
technologies. These include ISDN, HSP, GSM, analog cellular, 56K PCM and landline
certifications worldwide. SMART puts these technologies to use in various forms including
PCI, ISA and PC cards. The embedded computer division delivers a selection of standard and
perfect fit embedded computers with complete software support that offers varying
price/performance processor and industry standard bus interfaces. SMART's embedded
computers are incorporated into an ever increasing array of products used in a variety of
applications including internetworking, communication switches, industrial control and
medical imaging systems.