Tech multinationals? research and development (R&D) gravity is fast shifting from the West to the East. Their developer network in countries like India is growing at a scorching pace, both in terms of quality as well as quantity. If semiconductor majors Texas Instruments (TI) and Cadence Design Systems were the trend setters in the early 1980s to set up shop in the country, nowadays, the likes of Adobe, Cisco, Hewlett-Packard, IBM, Intel, Microsoft, Oracle, ST Microelectronics and Yahoo are doing a lot more research. Most of the centres in India are carrying out about 15-20% of the global R&D work for the parent companies and in some cases, such as print and publishing major Adobe Systems, around 35% of global R&D is currently done out of its India centres in Noida and Bangalore.
Naresh Gupta, managing director (India R&D) and senior vice-president (print and publishing business unit) of Adobe says, ?Tech multinationals are doing a lot more research and development in countries like India and China than they did a decade back. For instance, in 1998, Adobe had all its R&D activity in the US. Now, around 40% of our R&D activities happen in India and China.? As the economies of India and China grow, more R&D would happen from these markets to tap the high quality talent as well as to develop specialised products and services targeted for these markets. ?Increasingly, the teams in India are starting to focus on the special needs of local customers and develop targeted products. We are already starting to see some success in the digitisation area,? he adds.
Gupta makes a pertinent point in the sense that earlier, developing new products and bringing them to market in the shortest possible time at the lowest possible cost with the best talent around explained their strong India connection. The endeavour now is to create new and relevant technologies, devices and services for addressing the needs of the customers. Their R&D activities span across all key verticals, with prime focus on the hi-tech verticals such as software, storage, platforms, semiconductor/ electronic design automation, communications and networking.
Most of the tech majors are building up more local R&D capabilities and cultivating a vibrant local partner ecosystem so that they can systematically design and market locally-relevant offerings. Microsoft India Development Centre (MSIDC) at Hyderabad is a case in point. Their Emerging Markets Labs team has developed a set of transliteration tools that help users enter Indian language text into computers easily and quickly. This technology is available both in the desktop and the Web versions, uses free form transliteration and can be leveraged to support other non-Indian syllabic languages also. The tool is available in 10 languages?Hindi, Bengali, Kannada, Malayalam, Tamil, Telugu, Gujarati, Marathi, Oriya and Punjabi.
Srini Koppolu, corporate vice-president and managing director, MSIDC, says, ?There is a huge demand to consume and interact with Indian language content today. Tools that make it easy to search, communicate and create content in Indian languages are key for broader computing adoption and our tools are aimed at addressing this need.? Other products that have flown from the Hyderabad centre include the Windows XP mode and mobile extensions of Windows 7; the Microsoft-SAP Duet product; half of Microsoft?s Customer Relations Management (CRM) solution; BizTalk for Server 2010; Data Protection Manager, the compact edition of SQL Server and the distributed caching technology, Velocity.
Close on the heels of its alliance with Yahoo on search-related technologies, Microsoft has opened a new development centre in Bangalore?a decade and a year after it set up the centre in Hyderabad. The new centre will consist predominantly of Yahoo employees, 200 of whom will form the core of the new group that will work on product development and applied research in Web search and online advertising, which will help the two tech majors leverage each other?s strengths to create a formidable online search solution with sharpened advertising relevance.
Yahoo already has a R&D centre in Bangalore which completely manages offerings such as Yahoo Hot Jobs, Yahoo Finance, Yahoo Autos, Yahoo Real Estate and Yahoo Weather. Yahoo India centre is responsible for 25% of the global development engineering.
Similarly, Hewlett-Packard Labs India is creating relevant technologies for customers arising from rapidly growing markets such as India with distinct technological, social and economic characteristics. Some of the contributions from HP Labs India include the Gesture Keyboard, a unique device for entering phonetic scripts. This is a pen-based, low-cost device that can be used to input text in these languages. HP has developed the device for Devanagari and Tamil scripts and an average user can achieve a speed of 10 words per minute with just two hours of practice. There is also Lipi Toolkit (LipiTk), an open source toolkit for online handwriting recognition (HWR), supported on Windows as well as Linux, created and maintained by HP Labs India.
Sudhir Dixit, director, HP Labs India, says, ?Consumers, government, small and medium enterprises and enterprises are the market segments that are driving the R&D operations at HP Labs India. We are ramping-up our capabilities and investments to meet local needs and to be successful in doing so, we work with the thought-leaders, academia, NGOs, and many of our customers and suppliers to identify the unique requirements and then bring differentiation in our products and services to better meet the local needs at affordable prices.?
The Bangalore-based Intel India Development Centre, the chip major?s largest non-manufacturing site outside the US, is also making waves in the market place. Amongst the engineering groups in Intel India, Mobility Group has contributed significantly in the development of graphics and memory chipsets for the Intel Centrino mobile platforms. The Digital Enterprise Group?s efforts have resulted in Intel?s first six-core processor?the Intel Xeon Processor 7400 series?formerly codenamed Dunnington. Significant part of Dunnington was designed by the team in Bangalore. Intel Labs co-developed the world?s first programmable processor delivering teraflops performance from its Bangalore centre.
Among others, the Bangalore-based centre of Texas Instruments (TI) was extensively involved in developing LoCosto, the industry?s first single chip solution for wireless handsets. TI India has achieved many ?firsts? in its impressive track record. In 1995, TI developed the first processor designed in India for control applications.
The Bangalore centre is extensively involved in developing solutions for applications like wireless handsets, wireless infrastructure, video (security and surveillance, IP phones, set-top boxes) and high performance analog. TI India officials maintain that today, there is hardly any chip produced by TI that is not touched by engineers at TI India in Bangalore.
It is obvious that the two key factors driving higher R&D from India are high availability of high quality talent and reasonable cost of talent. At the same time, the value of local R&D is immense in situations where the product functionality requirements of the local customer are significantly different from needs of customers in the developed markets. However, in areas where the needs are similar, local R&D adds some value but not much.
Take for example Adobe products, explains Gupta. Most of the products are so feature rich that a single product meets most of the requirements of customers around the world. Local R&D for such a product is unlikely to add significant value.
On the other hand, if one were to consider an individual water purifier market, a product from developed market is unlikely to succeed as the operating conditions are so different. The water may be hard, may have significant impurities, and the power situation is unreliable. Thus, local R&D would create a product suited to tackle the local realities better, he reasons. No wonder, rich media, rich internet applications, content and application usage tracking and optimisation, cross platform and cross device support, SaaS applications, usability, and creativity are some of the themes driving Adobe?s R&D efforts in India.
HP Labs India?s Dixit says, ?Our primary focus is on the Indian (and thereby the whole of the emerging) market, but at the same time we transfer the innovations to the global market through our global business units.?
It is obvious that tech multinationals are embracing a new business model for their R&D operations in India; a model in which their capabilities are geared up to swiftly seize regional opportunities and yet are integrated into a global innovation network.