Founder and chief executive of SAI Systems, Wadhwani is in a tough line of business these days: software consulting. Sales are down. The company lost money last year. Some employees have been laid off.

Still, SAI Systems has managed to endure the recession with the bulk of its operations intact. And Wadhwani is quick to cite SAI's long-standing relationships with clients as the principal reason why.

"Once we have the long-term relationship with the client, when business is less than what it used to be, they still stick with us," he says.

Thankfully for SAI systems, it has long-term relationships with some very deep-pocketed clients. Investment bank Goldman Sachs has been a customer since 1990; Deutsche Bank has been with SAI since 1994. Citibank, The Chase Manhattan Corp. and IBM all have also been customers for years.

"That's it," Wadhwani says. "Our clients have stuck by us, and we have stuck by them too."

That loyalty has helped SAI Systems through some difficult times. Revenues fell from $8.4 million in 2000 to only $7.3 million in 2001, and Wadhwani says they could fall another 30 percent this year. The company operated at a loss in 2001.

Still, Wadhwani considers himself lucky - since other businesses in his field have seen revenues fall 50 percent or more. He hopes that slimmer operations at SAI Systems will stop any further losses.

"Every client has a lot of work," he said, "but people are just looking at the bottom line."

SAI Systems does have deep roots compared to many other software consulting businesses. Wadhwani, now 55 years old, started the company with one partner in 1986 as a mail-order business, shipping electronic parts from overseas.

Before founding SAI, Wadhwani worked for General Electric Co. and ITT doing software design. In the mid-1980s ITT sold its research-and-development operations, where Wadhwani worked, to the French company Alcatel. Soon Alcatel announced plans to relocate the R&D headquarters to Paris. Wadhwani stayed behind.

"Some of us were in love with Connecticut and decided to stay," he said. "It was pure luck that put us here."

Wadhwani arrived in the United States in 1971. He received several advanced degrees at U.S. schools, began working for a medical-equipment company in 1973 and quickly realized he had a head for the software business. He went to work for G.E. in 1978, and by then was married with three children. One son works at SAI Systems today.

As the mail-order business at SAI Systems grew, Wadhwani brought on new partners and expanded into software design. The company landed its first business client in 1989: IBM, which needed help with semiconductor research. It awarded SAI a $250,000 contract, soon followed by more deals for more money.

"That gave us the foot in the door," Wadhwani said. Other big-name business customers then started knocking: UPS, Goldman Sachs. By the early 1990s, SAI Systems had annual revenues of several million dollars.

Throughout the 1990s, SAI developed three main lines of business: selling specialized electronics equipment to businesses, designing software systems for the Internet or solving Year 2000-bug issues, and selling two pre-packaged software programs it developed from its project work.

Wadhwani also forged extensive overseas partnerships to reap the benefits of cheap parts and labor. "We had to do it to stay profitable," he says. "We needed the lower costs and the access to manpower."

SAI Systems started importing electronics from Asian manufacturers in 1989. In 1994, the company struck a deal with the Indian software firm Satyam Computer Systems, which then did work for SAI.

Business continued to grow, so much that in 1998 SAI Systems opened its own branch office in Wadhwani's hometown of Pune. At one point SAI Systems had 150 employees in Pune; about 100 still work there today.

The company currently has 60 employees in the United States.

"When the Y2K glut came ... that's when we started opening joint ventures," Wadhwani said. "Outsourcing was the name of the game. That has paid off."

Now SAI Systems puts most of its resources into software development for banks and similar large businesses. And while that sector has curtailed new spending on information-technology projects, it is still a large industry with plenty of room for quality players.

"Flat spending for banks still means $50 billion a year," said Alan Yong, an analyst with the Aberdeen Group in Cambridge.

Yong said much of the financial services industry still wants software for managing relationships with their customers, to get "the whole-wallet share" of any individual banking customer. In addition, new government rules about money-laundering are forcing banks to spend more money on their internal systems. Finally, other ongoing projects have not been killed off completely.

One strength SAI has in this market, Yong said, is that long history with its customers that Wadhwani values so much.

"That's quite important," Yong said. "These buyers are always looking for staying power... These initiatives are long-term, and they want a vendor that can evolve with the project."