Ascent of the Drones

The network of Bogdan Padiu for the regional expansion of Teamnet seems easy: it mixes the rules of basketball with the new technologies, from UAV and CLOUD, to GIS. The acquirement budget of 5 million euros completes the strategy.

Technology exporter

He understood from basketball that, if you want to play in the NBA, you need a powerful team, and if you want to mark the 3 point field goal, you need precision, technique and force. To bring Teamnet in the regional IT dream team, Bogdan Padiu says, exclusively for Forbes Romania, that he bets on 5 million euro worth of new technologies and acquisitions. Additionally, on the list of Teamnet shareholders, IFC, investment division of the Worldwide Bank, will be mentioned, too.

Passionate about basketball, but IT dependent, Bogdan Padiu applies in the business field the most important lessons learned in the team game. He has been managing the group of companies of the Teamnet technological field since 2001, and for two years he has been the majority shareholder, after the withdrawal of his ex-colleague, who became parliamentarian, Sebastian Ghita. Like any passion, the fascination for technology appeared, as well as the one for sports, in his childhood, before ’89, when he had the occasion to see a computer for the first time and it seemed extremely interesting to him.

Then, the high school years also allowed him to win his first money through IT. Particularly interested in the field of useful applications, he obtained a private scholarship in this field and with a few colleagues, started to develop waging, invoice and stock administration applications for some companies in Ploiesti.

“The incomes were not high. We were still high school students, we were trying to mix the interest in computers with education, course attendance and good results”, says Padiu. The story that started during high school continued for a few years, after which, together with his friends and ex school colleagues George Stan, Ovidiu Trascu, Bogdan Nedelcu and Sebastian Ghita, set the Teamnet bases.

“I had an initial investment from Sebastian Ghita, of 100,000 dollars and we began to develop applications. At first, we wanted to be a company that activated, besides the Romanian market’s development, quite small at that time, on the outsourcing market as well. This was the trend in 2001. We wanted to deal with programming for the big foreign companies”, he explains.

Step by step, the company went through different changes, and this day, he is one of the main players of the software Romanian market. Now, Teamnet draws IFC as strategic investor, the investment department of the Worldwide Bank, which will buy shares of 5 million Euros and will grant the company, too, a loan of 10 million Euro, according to an announcement on the IFC website. According to the same source, IFC will support Teamnet in drawing long term finances, improvement of the company capital structure to support the further development and increase of the company credibility in front of the partners and clients of Romania and on the other markets of the Eastern Europe. The investment was approved by the IFC board on 26.12.2013, but it has not been signed yet, according to the cited source.

Teamnet plans 2014 to be the year that will mark the powerful input on more markets of the whole world. “For the extension of the company, we mainly aim the organic development”, Padiu states. However, in the countries and on the market segments whereby he plans a fast development, the official Teamnet states that he will acquire relevant players.

“Therefore, we proposed ourselves a budget of 5 million Euro”. The first acquirement has already been finished the last year – the Spanish company Hidrocanal, specialized in the design, performance and technical supervisory of water channel civil works, in city planning and for environment projects. “This way, we followed the consolidation of our position in the water treatment and purification field, a market segment that, according to the estimations, will draw projects over 2 milliard Euros until 2020.”

The first step for extension was made two years ago, while Teamnet opened offices in four countries: Serbia, Turkey, Republic of Moldova and Belgium and started some projects in 10 other. But the target is not the extension in the Balkans, Russia and in the CSI countries, in the Middle East and Northern Africa. The investments in international projects, the adaptation of products to the external markets, training of the persons who will work for the new projects and the delivery of products means investments up to 15 mil. Euros during the next four years.

“On many aspects, Romania has products that can be successfully readapted abroad, this being one of our competitive advantages. The fact that during the last seven years, there have been huge investments for the alignment with the requirements of the European Union system currently allows Romania and companies to export this know-how on certain fields.

Obviously, we have met many challenges, but we learned from them and currently I think that we may remake our projects in other countries, too”, says Bogdan Padiu. And the following important step that the company will make on the second half of this year will be the expansion in Croatia.

Described in a few words, all these plans could seem easy to commission, at least as long as it is an investment fund, wherefrom it starts. But the things get complicated when you truly access the relevant markets, which implies, besides passing over certain cultural and linguistic barriers, finding trustful local partners.

What has Padiu found out during all this searching process about the adequate partners? That not all of them trust the team game as much as him. The foreign markets proved him that there are potential partners interested in the Romanian’s projects, but there may also be a lot of companies that reject the idea of making business with them from the beginning, due to certain preconceptions or distrustfulness of a Romanian company. “I met very good partners, willing to make business with us.

But I met, instead, many partners who didn’t want this, for the simple reason that I was not from their country. In Romania, our main advantage is that we have a more open-minded society in accepting people from other cultures, countries and business”, Bogdan Padiu says. Another challenge met during this expansion process occurred when the potential partners, apparently opened to the cooperation idea, only betrayed their trust. “I too met partners who only wanted to take advantage, to convince us to make an investment with them, to make some payments for the adaptation of certain products, to show us which are the opportunities on the relevant market, and then they were telling us: “we are sorry, we aborted”, the Teamnet representative says. He thinks that the strategy of making consortiums, which he tries to adopt in the markets like those of the Middle East, it is absolutely necessary to face the multinationals.

On the other hand, he admits that, in certain situations, this behavior of “the profiteer partners” led to financial losses, but he thinks that such obstacles can only be surmounted with a lot of patience, a lesson he learned from the Romanian business environment, also subjected to numerous troubles. One of the threats that the IT field meets nowadays in Romania is the human resource crisis, actually generated by a market’s strong point – the high demand of the well trained labor force. “A human resource problem started to delineate. Romania has created a very good reputation worldwide with respect to the quality of specialists, their professionalism and creativity. A lot of international companies came here and opened service centers, providing these services from Romania to Western Europe countries. Once the Romanian educational system produces high quality, but not enough, the investments that create jobs for 500 IT programmers or 1.000 specialists create an unbalance on the market between supply and demand”, Padiu explains.

Moreover, he states that such a crisis could create an artificial increase of the market costs, which could make Romania less competitive from this point of view.“The flexibility of labor market is quite high when it is a pressure, but quite low when certain international companies decide to move to other countries, that are more cost efficient”, Padiu argues.

In other words, the lack of staff could determine the great players to go to other countries, with a higher labor force and with lower waging pretentions. A solution of this issue could come even from the private environment, Padiu claims: “for this reason, we oriented ourselves to the higher education units and established a partnership with the University of Politehnica and with other universities”. The turnover of the group was 53 million Euro in 2012, which represents an increase of 630% during the last five years. In 2013, the business surpasses 60 million Euro, according to the market estimates.

And if 13 years ago, the company started with only seven employees, the last year, their number reached 600. For all these results, “the prizes” made no delay, Teamnet being considered for six years consecutively one of the most dynamic companies, according to the “Deloitte Technology Fast 50 Central Europe” classification. The group is made of four companies: the IT service integrator – Teamnet, the medical software company – Teamnet Dedalus, the automation company – Teamnet Engineering and the cloud company – Ymens, with the headquarters at Bucharest, Iasi, Galati, Bistrita and in the four places abroad.

Currently, the highest ponder in the group’s turnover is owned by Teamnet. Until 2018, Bogdan Padiu estimates that the foreign projects will bring about 40% of the group’s revenues. For the most part, these revenues were cashed by the contracts with the public sector (80%), and the balance will be further, too, bent to this area, but during five years, 30% of the revenues will come from the private sector.

“It will still be the highest turnover that we make with the public sector, because it is a business area where we have very good skills currently. I think, on the other hand, the public sector will continue to invest significantly in technology. Romania evolved considerably during the last seven years, but it will continue to progress in the future, this is also the reason why in the work plan with EU, have been established: 800 million Euros – 1 billion for structural fund investments for the period 2014 – 2020”, states the Teamnet manager. Among Teamnet’s most important projects, is the E-viza project (electronic portal for the facilitation of the visa procurement process), amounting 16.4 million lei, or the contract concluded with Administratia Nationala Apele Romane (National Administration ”Romanian Waters”) for technical support and maintenance services for the national informatics system in the water field (WIMS), amounting 4.8 million lei. But the project that Padiu hopes to successfully remake abroad also, is the management system of emergency situations of the national system 112.

“The integrated system for the emergency service has an essential role in the administration of emergency situations. In certain insolated cases, like the one in January 20th, the system operating normally is not enough. Many issues depend on the input data and the procedure flow, therefore there are necessary actions that perfect the location of the calls. At the EU level, many organizations whereby the European Association of the Emergency Number (EENA) consider that more lives could be saved if the legislation regarding the 112 system would be amended, so that the telecom operators to duly provide the information about the exact place of a caller in emergency situations”.

In the list of the beneficiaries of this project, there are the Town Hall of Bucharest Municipality, the Special Telecommunication Service and several county councils. Another product that the Teamnet manager would like to export during the following period refers to the development of UAV, aircrafts without a pilot or the so-called drones. The aircrafts have autonomy of about three hours, may reach the speeds of more than 110 kilometers per hour at heights of more than 2.500 meters and may be used in different fields like cadastre, agriculture, hydrology, but also the emergency situations.

But the list of Teamnet technologies that use abbreviations doesn’t stop to UAV. The company has been using the GIS technology (Geographic information system) for five years in order to develop 30 projects of maps and geo-space systems in Romania. GIS allows the establishment, storage, analysis and processing of geo-space data and grants the most efficient representation solution of information on the map, including the overlapping of several theme layers (different information), but also relations between the databases and their graphic representation. By the aid of GIS systems, developed by Teamnet are managed, for example, all the Natura 2000 sites of Romania (over 530) and all the protected natural areas (over 900). The outsourced services (Business Process Outsourcing – BPO) are, in their turn, an important bet for the Teamnet extension, according to Padiu, with the cloud segment. The analysts foresee an important development of the cloud service requests from the companies, especially from the small and medium companies.

And these are just a few of the projects, that Padiu bets on, in the foreign markets conquest strategy. Meaning those that should bring Teamnet in the NBA of the IT companies.

• Teamnet could attract IFC as a strategic investor, according to an announcement made by the World Bank’s investment division.
• Higher and higher – The Teamnet business have accelerating been developed during the last years, despite the crisis, and the number of employees increased from 7 in 2001 to about 600 last year. The company states that in 2013 also, it continued to develop, the rhythm surpassing “two digits”.
• Turnover (mil. Euros).

The Drones, between the experiment and necessity

Many associate them to the technologies strictly related to the military industry, others consider them only experimental instruments. What are drones actually and for which purposes could they be used?

“The term of drone somehow invokes the idea of hostile military defensive”, Michael Toscano, the president of the International Association of UAV Systems (aircrafts without a pilot) says. But this is not the only purpose of this technology. The trading aircrafts without a pilot have a wide range of use, from the monitoring of the electricity transport system up to the monitoring of wild fauna; they may be used, too, in fields such as hydrology or agriculture and many others.

In Japan, for example, during the last four years they have been used especially for the herbicide of agrarian crops. After they ascertained that these are more useful than the small planes that usually treated terrains with herbicides, the Japanese government concluded a partnership with Yamaha for the manufacture of drones with a design especially created for this purpose”, Toscano explains, according to Forbes.com.

However, in very many countries, due to bureaucratic problems, their potential is not yet fully exploited. In the United States, the Federal Administration of Aviation prohibits their use, with little exceptions, until it will be a clear legislation in the field. The legislation is in the process of elaboration in Europe also, and implicitly, in Romania. The governmental institutions and the universities are the only ones that can entirely benefit from the utility of drones in the United States, provided that they obtain certain authorizations, and their use may only be made for certain purposes. Among those who showed the most interest in the possibility of using this technology, are the researchers and scientists, who thereby have the possibility to elaborate maps for certain important and hardly accessible areas or follow the progress and habitat of rare animal species. Among those who may require the authorization to use the drones for scientific purposes, there are the representatives of academic environment.

“A very little time ago, only five-six universities were using the drones. Now, their number is almost 200. The high quality data collection may be made with a minimum effort and low costs, and this especially happens due to the development of aircraft systems, the machinery and new endowments of this industry. As for example, the price of cameras and cinema cameras has significantly decreased during the last period”, Michael Hutt, the manager of UAV system within the U.S. Geological Survey (USGS) says.

But, apart from the trading and scientific utilities, the drones may be used in case of emergency situations or natural disasters. The possibility of sending these machineries to the hardly accessible areas could help for the localization of disaster survivors. Their utility in several emergency cases has already been tested. As for example, a non-governmental organization of Germany built an UAV that delivers cardioverters to the patients who had suffered a heart attack and that may reach them faster than the paramedics. Another example is the one of an American research company, Physical Sciences, which created a drone called InstantEye, which identifies the survivors of an accident, or persons isolated in the areas without any access and have the ability to carry mobile phones whereby the victims may keep the contact to the authorities for the emergency situations.

The driving of UAVs is obviously made much easier than of the fight aircrafts, but however, is not just a children game. Most of the times, the wind may constitute a major challenge.

Then, there are questions about the possibility of damaging the wireless system or, maybe the most important fact, those related to the safety they provide, unless they are a threat for the private life. The public thinking is not yet very favorable to them, but the certainty that these devices are not used for the spy is an issue that may be solved by the aid of laws that regulate the use of UAVs. As for their performance and the risks they represent in the case of defects, it’s important to know that this technology is still in the progress stage, we are currently talking about the “era of drones 1.O”.

In Romania, Teamnet launched, after a project of investments and research developed during the last two years, a plane without a pilot that has an autonomy of about three hours and that could reach the speeds of more than 110 km/h at the heights over 2,500 meters. The aircraft may be used for the data collection about the state of crops, the monitoring of pests, for the issuance of detailed maps or the monitoring of activity on large land areas. The UAV system includes three Hirrus aircrafts without a pilot, a control-command station and the emission reception antennas.

Author: Raluca Abrihan

 Publication: Forbes