Last week, I had the pleasure of interviewing the CEOs of Talisma Corp. and Aditi Technologies. For the uninitiated, Aditi's founder, Pradeep Singh, is also the company's CEO & Chairman, as well as Talisma's founder, chairman, and former CEO. Talisma's new President and CEO is Dan Vetras, former President & CEO of Captura Software (which was recently acquired by Concur Technologies, Nasdaq: CNQR). At Captura, Dan was responsible for determining the company's strategic direction and operation.

Pradeep turned entrepreneur and founded Aditi in 1994, after a nine-year career at Microsoft. A graduate of IIT Delhi, Pradeep also earned a Harvard MBA, and is an active charter member of TiE-Seattle. Pradeep narrated Aditi's interesting birth. CompuServe (now AOL-owned) was running a Q&A forum for Microsoft users, among other interest groups. When recuperating after a head injury in 1993, and upon deep reflection, Pradeep decided it was "time to give back to India", after having "won a lottery" at Microsoft. Thus was born Netquest, later renamed Aditi, which contracted with Microsoft to host their CompuServe forum, answering customer questions and offering tech support. But, this was short-lived when Microsoft launched its MSN portal in 1996, in effect competing with CompuServe and other ISPs. Microsoft didn't renew its contract with CompuServe, the forum ceased to exist and Aditi's business model pretty much died. Except, Pradeep was the consummate entrepreneur, and this led to Aditi's foray into contract programming.

At Talisma, Dan admitted that one of his main challenges remains managing three key offices - Kirkland (WA), London and Bangalore - all together, given the time difference among the three locations. "I like to see and hear directly from my managers, on a regular basis. Email communication is a double-edged sword and therefore my strong preference is face-to-face meetings, failing which I use video & tele-conferencing. I have already visited both overseas locations twice since last September, and have made it a priority to visit every 90 days." [Previously, Dan was an expatriate in London for four years, when he opened Lotus' first overseas office]. Interestingly, one of the biggest ongoing challenges Pradeep mentioned was the lack of availability of middle managerial human capital, especially in India [Aditi and Talisma both have a headcount of about 500 employees each, with a large percentage located in India].

Aditi is a provider of leading e-business solutions and custom software development services, whereas Talisma, which was incubated at Aditi, was spun off as a separate eCRM solutions company, just under three years ago. But Dan pointed out that Talisma has repositioned itself as a Customer Service Management (CSM) company. "There are upwards of 700 companies in the CRM business space. Talisma offers an entire suite of products and we have positioned ourselves left-of-the-middle, leveraging our strengths and core competencies. Our long-term approach could likely include strategic acquisitions, if we find companies with a good fit, and while I cannot give you a time-frame, it would not be unfounded to say that we are eventually looking forward to an IPO," he said. "Last year, we had revenues of $10m, and we're working very diligently toward achieving profitability, hopefully by the end of this year." Both firms are privately held. Pradeep personally contributed to capitalizing both companies and Talisma's other investors include Paul Maritz (former group VP at Microsoft), Oak Investment Partners, Madrona Venture Group, The Carlyle Group, SeaPoint Ventures and Cedar Grove Investments, with $59 million in total venture capital raised.

Exactly four years ago, Talisma became the first Indian-made-and-owned software product to be featured on Microsoft's Site Builder Network website, which also featured a trial download of the software. According to Dan, Talisma is uniquely poised to capture a large percentage of the eCRM market, within the CRM service industry (Gartner Research estimates that businesses will spend a total of $25 billion on CRM services by the end of this year, including $3.7 billion on eCRM). Over time, services have become the biggest piece of the enterprise IT pie. Services vendors are striving to develop proprietary technologies to leverage the workforce that provides CRM services, to make them more efficient, productive, and empowered.

Talisma has a Microsoft-centric product strategy, which makes it a home run for Microsoft shops, but Dan emphasized that this does not necessarily make it a washout for others. "We're happy to host it on your behalf, as an ASP model. Increasingly, IT-related decisions are being made not just by CIOs, but CFOs as well, which means it is no longer just a technology decision, but more of a business decision. It is true that our products' strengths lie with email, chat, and Web-based co-browsing, but if a potential customer service app buyer had strong telephony requirements, we can offer a highly configurable and customized product as well."

According to Pradeep, "Talisma was spun off of Aditi, for a variety of reasons. Talisma's business is that of helping people deal with customers, whereas Aditi is in the business of helping people deal with programming problems. Both companies started projecting very different business objectives and since Talisma needed to raise millions in venture capital, it was important that our future investors saw the company with a clear and separate identity." Pradeep stepped down as Talisma's CEO about 3 months ago, and when asked what prompted this change, he responded," I am a product guy and my initial goal in creating Talisma was to design a world-class product. I believe I have fulfilled that part, plus it was the right time to turn over the reins of the day-to-day operations to someone else. But I remain Talisma's chairman, and continue to provide strategic direction. And, in Dan, we have a fantastic CEO running the company [Dan was introduced to Pradeep by Fred Harman, a general partner at Oak Investment Partners, an investor in Talisma and an investor in Captura as well].

Over the past few years, just about every business and technology publication, from Fortune to Forbes to this month's cover-story in a Businessweek issue, an article in last month's The Economist and even this month's issue of CFO magazine, has written extensively about IT outsourcing & offshore software development, obviously citing India and other low-cost countries as prime examples. I asked both individuals for their thoughts on what kind of political, economic or even social impacts would this have, in this country, longer-term. Pradeep's response," We live in a global, interconnected world. Economics dictates what will survive and in fact thrive, business-wise. Look at what happened to the manufacturing industry. For all practical purposes, it has ceased to exist in this country, and an overwhelming majority of the jobs have gone to locations that were able to provide tremendous cost-effective alternatives. Dan replied, "I'm a huge believer in customer facing positions. Remember the classic recycling argument - saving trees or taking away jobs from the communities? We're leveraging our core strengths and IT outsourcing offers some fantastic advantages. Bottom line, do you want to swim with the tide or against it and sink?"

On a lighter note, Pradeep remains ecstatic that he has not (yet) received a speeding ticket since acquiring and zooming around in his favorite BMW 540i. When I pointed out that there could only two reasons for this - he was no longer driving fast or it was just plain dumb luck - he replied," It's the latter."