After doing time in both the U.S. and India, serial entrepreneur Sanjay Shah didn’t have a hard time deciding where next to set up shop.

“Bangalore is an IT haven, and yes, certainly the costs are low,” he explains. “But what makes it attractive is the availability of good local talent.” Not to mention the great weather. So Mr. Shah moved the R&D department of iCode Software, which he co-founded, from Dulles, Virginia, to Bangalore in 1997.

Today he’s steering Skelta Software. It’s the first wholly Indian enterprise for Mr. Shah, who grew up in the western Indian city of Baroda and studied at the famed Indian Institute of Technology in Mumbai, and it may be his biggest project yet.

Skelta specializes in enterprise-wide business process management (BPM), which combines automated processes like workflow systems, XML Business Process languages, and packaged enterprise resource planning (ERP) systems. Skelta targets small and medium-sized companies, a base Mr. Shah believes will get his company a niche market over the next few years. “We are much better suited toward the needs of the small companies than most of the other players are,” he says. “We can implement our software within two to three weeks. A company like SAP will take months, and that is just not feasible.”

With the BPM space expected to grow to as much as $6.5 billion over the next few years, Mr. Shah’s company has room to grow. “We are not SAP or Baan,” he says. “Our target is to have 3,000 customers over the next few years in the small and medium-sized space, and that is a sizeable number.”   

Mr. Shah knows IT innovation. Over the last 17 years, he’s gone from the PC hardware manufacturing business, where he founded white box computer retailer Accel, to the less predictable ERP space in 1994, building software to help businesses coordinate and manage their various components. At iCode he helped develop ERP solutions for small and medium-sized businesses. He also served as the company’s managing director in charge of India operations, and head of the Bangalore-based R&D unit. One major milestone: Everest, iCode’s business management software. The prototype had been developed at Accel as the Automator.

“We had to build the Automator ourselves, because there was no off-the-shelf software available,” says Mr. Shah. “It was perfect for keeping our costs low, and our margins high.” Seeing the interest in the software among other computer manufacturers, Mr. Shah decided to develop it again from the ground up to expand its scope for other industries. And thus Everest was born.              

Soon after, Mr. Shah decided to move on. “The company was obviously growing bigger,” he said. “It was drawing $10 million in annual revenue and I decided it was time to appoint a professional CEO and hand over the reins to him.” After the Shahs’ return to India, his wife Kalpa, a former AOL employee and entrepreneur in her own right after setting up a chain of video stores in the U.S., started Skelta.

Mr. Shah introduced BPM software products into the company’s portfolio in 2004; in February 2005, it signed its 100th customer. He is CEO and a 50 percent shareholder in the company, and hopes to find additional funding in the second half of the year. Skelta’s revenues are split 30/70 between professional services, its original business, and product licenses, and the company already counts Motorola, Siemens, and i-flex as customers.

The Bangalore move, it seems, was a good one.