PolicyOne has been formed following the merger of internet software firm Duet Technologies with hardware solutions company TunnelNet Inc in Fremont, the US. Duet's India operations will now form the basis of the PolicyOne's wholly-owned subsidiary.

The company, working on development of an internet infrastructure product with hardware and software component, is making an immediate investment of Rs 15 crore in the venture.

The first product, targeting ISPs, ASPs and portal developers, will be ready for launch later this year. The offering will cover hardware and software solutions that go together to help control and ease information-sharing across distributed entities.

PolicyOne plans to immediately put in place a web-based intranet which will track all aspects of the development such as request documents, design documents, development plans and engineering schedules seamlessly across the development centers in US and India.

The Indian arm will initially have 60 software engineers in addition to 40 in the Silicon Valley who will develop software solutions, including web server, firewalls and network management software, according to PolicyOne chairman Prabhu Goel, who has also funded the venture.

``We plan to recruit another 100 software developers and ASIC, chip and board designers by the end of the year while we shift our headquarter to a new 40,000 sq ft facility in Silicon Valley soon,'' said Goel.

Later, it will also set up a large-scale sales, service and support network for its product and focus on training of channel partners. To fund the next phase of expansion, PolicyOne will come out with an initial public offering in India next year, Goel added.

India is slated to be made hub of its activities by PolicyOne and it will target large internet-ready markets like the USA, Europe and Japan for its product and later in Latin America, eastern Europe and south-east Asia, including India.

According to International Data Corporation, world-wide e-commerce spending is estimated to grow from $100 billion in 1999 to $1,400 billion in 2003. A substantial portion of this spending will be targeted at growing and enhancing the internet infrastructure.