Hyderabad: Srini Koppolu, the former managing director of the Microsoft India Development Center, has purchased a minority stake in SETU Software Systems (P) Ltdand been named chairman of the Hyderabad-based technology company.

Koppolu, who left Microsoft last year after a 21-year career at the world’s largest software maker and became an angel investor in start-up companies, refused to disclose the size of the stake he has purchased and for how much.

He said he had been attracted by the information access technology developed by SETU Software, which was spun out of a research lab in the International Institute of Information Technology (IIIT), Hyderabad, and offers local language search, enterprise and semantic search, social media monitoring and automatic text summarization services. The company supports search in around 70 world languages.

Koppolu’s role will be to build strategy and a long-term road map for the company, he told reporters in Hyderabad. “The company’s strong technology foundation can lead us to many unique business opportunities and enable us to create solutions for education and social empowerment," Koppolu said.

SETU Software was started in 2008 by Prasad Pingali and Vasudeva Varma, professors at IIIT, Hyderabad.

The automatic text summarization technology developed by SETU will be of help for media and Internet companies to generate content, said Vasudeva Varma, chief scientist and co-founder of SETU Software. The technology based on artificial intelligence performs search and analysis and presents content in a readable form.

“From day one we were a profitable enterprise, but the challenge ahead of us is how to build a successful scalable business model out of our technologies," said Pingali, chief executive officer. “This is where we believe Koppolu will add tremendous value due to his vast experience."

Currently SETU Software generates revenues by licensing its technologies. It counts companies, including Samsung of South Korea, Rediff.com and Manipal Universal Learning among its clients, besides government agencies. The company also markets a hand-held education device called MyDrona to aid students.

“Enterprise search and social media monitoring are fast growing areas," said Surya Mukherjee, lead analyst, information management technologies at Ovum Ltd, a consulting arm of Data Monitor. “However, whether SETU will hit the mark will depend on what its core value proposition is.

While Mukherjee sees abundant potential for growth, he says the company is still at an early stage, has “very few real clients" and its target market appears to be Indian companies.

“On average, Indian companies tend to be at the lagging end of the technology adoption curve—this is evidenced from the fact that software such as business intelligence (BI) and data warehouses are still not commonplace in large Indian companies, whereas companies in Western Europe and the US have had BI for decades," he said.

Ovum estimates the global market for enterprise search technologies at about $2.3 billion in 2011. “Enterprise search is a fast growing area and as per our estimates should record growth rates above 10% per year," said Mukherjee.