The five technology funds identified by the company span three continentsand are expected to further enhance HCL' technical coverage. The fundsinclude Diamond Head Ventures and Arena Capital in the US, Carlyle Europeand Viventures II in Europe besides Carlyle Asia to cater to the AsiaPacific region.

To broaden its access to emerging technologies, the Shiv Nadar-promoted HCLis evolving a technology market acquisitions strategy. The multi-prongedstrategy includes plans for identifying technology funds focused on fundingemerging technologies, forging alliances with select technology funds,offerring technology start-up kits to customers of these funds and theoption of retaining the option of equity investments in these start-ups.

To focus on technologies and the related skill-base, HCL has developed theconcept of `technology cradles'. "These off-shore units, where key resourcesare allocated, will identify emerging technology opportunities. About 9 percent of HCL's offshore manpower is focussed on areas like bluetooth, WAP,XML and VXML technologies," HCL Technologies chairman, president and chiefexecutive officer Shiv Nadar said.

For instance, HCL is developing embedded software modules for the nextgeneration multimedia cell phones for a Japanese client. Work includesdeveloping imaging modules for image conversion, resizing, JPEG encoding,audio level reporting and developing audio modules.

Research and development (R&D) will be the major focus area for the company.It has invested Rs 8.9 crore in Harmony Software Inc, a US-based company inWeb-related ASP (application service provider) business in partnership withChevron and Reuters. HCL will also pursue the same strategy in the comingyears, Nadar added.

Harmony is an analytical engine for business-to-business (B2B) andbusiness-to-consumer (B2C) exchanges, portals, ASPs and platform partners.Besides strategic investors like Reuters and Chevron, Harmony's otherinvestors include KPMG and Ernst & Young.

The company has a team of experts and advice support from Digital Equipment,Apple and IBM to develop and deliver an integrated business intelligencesolution including data warehousing, web decision-support and user interfacetechnologies.

"HCL has also been evaluating merger and acquisition (M&A) opportunities inthe US and Europe. A six-member team is scouting for companies in theselocations. HCL Technologies has spent about Rs 7.6 crore since January 2000to this effect," Nadar added.