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SDG started in 1993 as Systems Design Group. After developing various systems and undertaking projects for corporate clientele, the company diversified into the Securities market in 1994. SDG is also the brains behind online surveillance systems at the Mumbai, Delhi, Calcutta and Bangalore Stock Exchanges in India. it@tt met up with Suheim Sheik, Founder Director of SDG. Excerpts..

IT@TT: What motivated you to enter the software field?

SS: I had learnt programming while doing my engineering at IIT Madras. Software was the only field besides engineering that was open to zero-capital entrepreneurship. It was intellectually challenging. And it did not require too much infrastructure. So I leased a computer and I'd just sit at home and program.

IT@TT: How did you get into developing software products for stock exchanges and broking firms?

SS: A friend of mine called one day and asked if I'd like to do some work for a stock-broker. I had nothing else to do at that point of time so I said "Sure,why not?" We started developing a back-office system. What I didn't realise then was that it was an amazingly established market. What in 1993 seemed a 180-day project is something we are still working on; its now been about 8 years and still unfinished.

IT@TT: What kind of products do you offer?

SS: We started off with a back office system, WorkHorse. At that time, there was an lull in the market post-scam. The success of WorkHorse prompted us to focus on the securities market full-time. We were looking at collective challenges, diversions to keep ourselves occupied. We started selling to the stock exchanges; first Bangalore, then Delhi, followed by Calcutta and finally the big daddy, Mumbai. Today, we offer comprehensive and scalable solutions from multi-tier back office software to Web-based order routing and high-performance, real-time risk management and trading engines.

IT@TT: What is the scope of IT in the Stock-broking sector?

SS: When we moved in, technology had just a 2-3 percent role in driving the stock market. It was beginning to play a major role at the Stock Exchange level. Now I think it has a 95 percent role and business plays just 5 percent. It's a technology driven market now and unless stock brokers move into technology, start understanding it and allowing it to play a major role, they will have to just wind up.

IT@TT: What has been the acceptance level or response rate of your software amongst traditional stock brokers or stock broking firms?

SS: 100 percent! There is nobody left in the market who is used to carrying on traditional businesses. They have to move into technology. Technology is the driving force. Stock markets anywhere in the world are technology driven. Technology companies are buying stock exchanges or at least trying to buy Stock Exchanges.

IT@TT: Did you ever encounter that Indian stock brokers prefer a traditional rather than progressive approach to trading?

SS: Those who did, don't exist any longer.

IT@TT: Who are your main competitors?

SS: We face competition from one strange area actually. That's the NSE itself which has an arm called NSE-IT. It's the stock exchange which actually controls the dissemination of information and tools to the vendor. They themselves have an in-house vendor. So far, that's one big competitor. Other competitors are TCS, IBM, lots of small players and one large player called Financial Technologies (FT).

IT@TT: Do do face competition from the different online trading services offered today?

SS: We are not an online trading service. We only provide technology to online trading services. The competition is technology providers to online trading services.

IT@TT: How is it that you didn't cash in on the Internet boom, and launch, say, a Web site offering some kind of online services...? In recent newspaper article you had announced plans to launch such a Web site.

SS: If we had to cash in on the Internet boom, we would have also had to cash out on the Internet bust. However, from an area of zero web interest, we now have a web team of about 20-25 people who are into servicing products on the web. All our products are going to be Web-enabled.

IT@TT: You have been in the business since 1993, gained prominence in 1998. What do you attribute the breakthrough to?

SS: We're into product development and technology awareness amongst the buyers. Products take ages to build, and we're not into the services business at all. Stock brokers have begun to understand technology very seriously only in the last one and a half to two years. Both these reasons put together constituted the breakthrough.

IT@TT: Having developed stock-broking software for so many years, have you ever made money on the stock exchange?

SS: No! Neither me nor any of the people working in SDG are allowed to trade by our company principles. This is because we are privy to all sorts of information in the stock market. We wouldn't like our guys to use that information for personal gain. They are technology people and should be driven by technology and not short term or long term speculation.

IT@TT: Finally, do you have any tips for our readers about the stock market and trading?

SS: Keep off the stock market!! That's my advice. It's because I don't believe that anybody really makes money on the stock market.

IT@TT: Isn't that a really broad statement?

SS: True, But in my experience since 1993, I haven't met anybody who's done anything more than broken even on the long run. It's probably a whole lot of long term investors who bought blue chips, but where are the blue chips today?

Stock brokers have all gone through ups and downs like any other business and most investors I've met are very closed to the stock market. The entire stock market is a very whimsical animal and my advice to anybody is," Don't go anywhere near it".

Interviewed By Yagna Balaji
[email protected]

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