No More IT Coolies Pl, We’re Indians

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New Delhi, Aug 19: India’s software outsourcing sector seems northward-bound on the value chain. After BPO and software services, outsourced product development is germinating.

According to industry estimates, more than 100 small and midsized software product companies (with revenues $5-$100 million) are already outsourcing parts of their product development to independent software development firms here. More are waiting in the wings.

So far, product biggies like Microsoft, Cisco and Adobe have been developing products in India but only in their own captive centres. There is evidence now of a few small and specialised Indian companies also getting involved in the outsourced product development business. The growth path is scorching: 100 per cent a year, albeit on a low base.

In Noida (near Delhi), Induslogic is developing software products for around 40 US-based software firms. The company has grown from just 25 engineers in 2002 to around 260 now. It will be doubling its strength in the next 8-10 months by adding 30 engineers every month.

“It’s a win-win deal. Product firms reduce their costs by outsourcing. In addition, we offer them specialised skills that they may not be able to maintain on their own. Moreover, they may not enjoy cost efficiencies by setting up their own small captive center in India while we have the benefit of a large product development centre as we cater to multiple customers,” Induslogic CEO Peter Harrison told FE.

Induslogic, promoted by four Indian technocrats, is headquartered in Washington DC with a delivery centre in India.

Another Indian firm, Scicom Infotech has recently tied up with US-based Credence Systems Corporation and has 60 dedicated engineers for product development at its Noida centre. “We will be developing some parts of a high-end testing tool for chip design. The product is being developed by a 160-people team spread over multiple locations of Credence. Scicom centre will work as an integral part of the global development team,” Scicom managing director Indranil Chakravarty said. Credence is developing products for other US-based companies as well.

Impetus Technologies, promoted by Indians and having development centres in Indore and Delhi, is also designing and developing software products for more than a dozen global companies like 3M and PeopleSoft.