Interview: Alex Burn (COO, WilliamsF1 Team)

Alex had come down to India sometime back to sign a contract with Tata Technologies, it was then that I had met him. He seemed quite eager and enthusiastic about his trip to India and I had suggested some ‘typical Maharashtrian’ delicacies, like missal pav. He couldn’t try it due to paucity of time, but promised that he will next time round. Am waiting to hear from him. This interaction was published in the Dataquest Magazine: (

‘IT is making us a whole lot quicker… to work at speeds similar to our race models’

The date May 1, 1994, has a special significance in the sport of F1 racing. It was the day when Brazilian Formula 1 driver, Ayrton Senna de Silva died in a car crash in San Marino Grand Prix in Imola, Italy. He was racing for the Williams-Renault team and was in a winning position, when his car crashed into unprotected concrete barrier. The death of Senna brought the dangers of the sport into the limelight.

Post, 1994, all Formula 1 racing teams have put in massive security procedures in place to ensure that such a event does not occur again. IT plays a very critical role in this aspect, as companies are using the latest computational technology for better car design.

WilliamsF1 has been in the racing circuit for around three decades and is renowned for its FW models released year after year. The company recently signed an agreement with Lenovo, who would be one of the main sponsors of the team. Sometime back, Alex Burns, chief operating officer, WilliamsF1, had come down to India to visit Tata Technologies facilities in Pune. In an interaction with Shashwat Chaturvedi from Dataquest, Burns talks about how his team is using IT and why outsourcing might not be such a bad term after all. Excerpts.

What role does IT play in the development of an F1 car?
Technology is a critical element behind the success of any F1 team. Today, without any exception, every F1 team is investing heavily in latest tech mechanisms to get the best out of their models. Take the case of FW28, used in the 2006 season, we used over 4,500 CAD drawings during the design phase. We are heavily dependent on computational fluid dynamics, telemetry and other to not only develop an F1 car but also run it well.

To be frank, the FIA has introduced rules over a period of time that effectively slow down the car. It is driven by security needs, because otherwise all the cars would be trying to increase speed aggressively. There are whole lists of tests and reports that one has to complete before launching a model. There are the wind tunnel tests and crash analysis tests. Today, with the latest cutting edge applications, not only is it more cheaper than the traditional way but also a whole lot quicker. All this is only due to IT at work.

Once the model is up and running, what is the role that IT plays?
Running an F1 car is a highly data intensive job. For instance, over a weekend of grand prix race, close to 7GB of data is generated. This data needs to be meticulously analyzed and the design changes need to be implemented quickly. Also, this requires speed. At times, we work at speeds similar to our race models. When the car is running there are thousands of sensors that are attached all across the body reporting on different parameters. To make sense out of all this data and implement changes quickly, is a job that is best done with the help of IT.

We function at the very edges of technology. Our work is quite akin to the space industry. The components have a short life, we are constantly testing and incorporating changes. It is a very dynamic industry.

There is a general feeling that F1 racing has become overtly technology driven, the cars are more like computers. Your take?
I do agree that there is a general feeling of overuse of technology but you need to understand the reasons behind it. Since racing is a very dynamic and speed driven sport, any small error can be huge, not only in financial terms but also in terms of risk to the driver. Thus, one has to ensure all the safety and security that one possibly can, this is where IT is extensively used. And to that end, I support the use of technology. But, at the end of the day, the car is just an entity in the hands of the driver and it depends on the individual skills of the driver to steer the car to the premier spot.

What is the reason behind your engagement with Tata Technologies and the benefits of outsourcing?
The very same that are driving a host of companies around the world, namely time and money. Developing an F1 model is big money, and, as I said earlier, a lot of this is in the technology costs. Using the skills and facilities of companies like Tata Technologies we intend to shorten the development time and also decrease costs. We have a production cycle from September-March. That’s when we develop models for the next racing season. We would be working with Tata Technologies (Incat) on CAD models, etc for the FW29 model. Hopefully, as time goes by, we will increase our engagements with Tata Technologies. The quality of skill at Tata Technologies is high, and they have the ability and the wherewithal to put in the requisite numbers if need be for a project. It has the makings of a great marriage. We can do things faster and also in a cost-effective manner due to our association with Incat.

A word or two on the upcoming FW29?
In many ways FW 28 did not really meet the expectations of the WilliamsF1 team. We have learnt a lot from our outings in the 2006 season and we are going to apply them during the design for FW29. As we are retuning back to using the Toyota engine again, hopefully things will be very different in the coming season.

Interview: Noble Coker (CIO, Disneyland HK)

One would be hardpressed to find a person who does not know about Disneyland. But a lot many do not know that behind all that magic there is a lot of IT & Technicality. It was amazing interacting with Noble COker, who is the CIO of Disneyland HK, he is a man without airs and seems to love the challenges that keep cropping up all time. This interaction was published on CIOL, the link is (

‘Magic @ Disneyland

Noble Coker marched into the meeting room. As the CIO of the upcoming Hong Kong Disneyland, this was his first interaction with his local team members. For the meeting, he had prepared an agenda and was ready to thrash it out with his colleagues. Strangely, throughout the meeting the team kept mum. On being pushed by Coker, the team members would only show their appreciation for the project.

“They found it incredulous to tell their boss that he was wrong, while it was much the case in the US,” he recalls. This was Coker’s first cultural shock, but he quickly learnt the ropes and next time round he was prepared with a solution.

To say that Coker is a fast learner, would in no means be an exaggeration, after all during his college days he learnt Lao language from all the refugees who were being resettled in California and later on took classes on the language, “to pay my way through college.” He joined PriceWaterHouseCoopers as an analyst and subsequently was hired by Disney as a programmer. Rising up the ranks, he took up the challenge to oversee the construction of the fifth Disneyland in Hong Kong, and the rest as they say is history.

In a freewheeling interaction with Shashwat Chaturvedi from CyberMedia News, Coker talks about the “magical experience” at the Disneyland and how IT makes it happens. Excerpts:

Can you tell us about the use of IT at Hong Kong Disneyland Resort? How much has been drawn from the other Disney parks in the U.S. and Europe and how has the HK Disney been unique in terms of technology adoption?
At Disneyland, the use of technology can be classified under four different categories, as follows. The first one is business transaction, the use of IT in hotel reservation, merchandise dale, food point of sale, etc. The second category is communication, the use of email, IP telephony for internal communication. The third category and a rather important one for us is the safety and security for our guests and visitors right from food to park monitoring. The fourth one is the entertainment; we use a technology in a variety of ways to enrich the guest experience. Hence, we extensively use IT at our parks.

Giving a precise figure on how the common technology between the Hong Kong and the international parks is a tough call, but I can hazard a guess that it must be around 80:20 international and local mix, respectively. We have used technology in very many unique ways in Hong Kong.

You have often emphasized on creating “magical experience” for the guests, can you share with some instances on how technology is being used to create that “magical experience”?
When our guests walk out of our park, I would rather have them remembering Disneyland for a great magical experience rather than a great technological one. I want people to say, “wow, how did they do this” and our technology is geared towards creating that very experience. Starting from the website, we have created a similar experience much like the one that a guest will experience at the park. At the park itself, we are using a variety of tech applications for instance, at the park there is a wireless broadcast that synchronizes the timing through the park, this ensures all the different elements work in perfect coordination, like the parade and the floats.

We also have piped music that is running through the underlying infrastructure. Or take the case of the newly introduced FastPass at Disneyland. In the past guests had to stand in long queues to be able to enjoy their rides. Now with Fastpass, they can register themselves for a slot later in the day and comeback in that slot and enjoy their ride. This helps the guests spend more time on the rides rather than queuing up. Even our park attractions use technology to reinforce the ‘magical’ feeling. Take the case of Stitch Encounter, based on the Disney character Stitch. He dynamically interacts with the guest and his responses are based on what the guest tells him.

One of the challenges (mentioned by you) was working with multi-cultural team, how difficult or easy is it to work with diverse teams?
To be honest, working with multi-cultural teams can be extremely difficult, if one is not sufficiently prepared for it. I committed a lot of mistakes and learnt through them. Such experiences forces one to remove our filters; filters that one acquires over time. The experience can be quite humbling. For instance, when I had come here, I was trying to achieve things without understanding the significance of different cultures. Typically, Americans have a bad habit of talking first, and listening later and giving away a lot content without much context. I quickly understood these issues and got down to working them out by understanding the people and learning more about their culture.

Do you think current-day CIOs pay much (more than required) attention to this aspect?
Though companies are going global, I still fell that as CIOs, we do not pay much attention to cultural sensitivity issues. By nature CIOs are naturally project driven and focused on getting the job done, and no one frets over such things. But, I personally feel, that resolving these issues can be critical to the success of a team.

What is the IT strategy roadmap for the future, i.e., technologies that are being tested for the future?
Going ahead, we have created a New Technology Group that has representatives from all the major Disney Parks like Hong Kong, France and the U.S. The group examines all the emerging technologies across the world and then uses them at the parks. For instance, some years back, the mobile penetration in Hong Kong was much ahead of what it is in the U.S., so we perfected the mobile applications out here and now they can be cross deployed in the U.S. market.

In the times to come, convergence across varying media will be big thing in the days to come. Today media is ubiquitous; there is a plethora of devices like iPods, mobile phones, etc. The challenge will be to deliver multi-dimensional experience. Guests in the future would want a more enhanced experience, so when they visit the Tarzan tree house, they would like more information on Tarzan or even like to see a movie clip of the film. We are gearing to deliver that enriched user experience. Disneyland will always be magical.

Interview: Scott Griffin (CIO, Boeing)

Scott Griffin is well-respected in the industry for the way he has turned the tables at Boeing. For the past few decades, the battle between Boeing and Airbus has been more than just 787s and A380s; it is war that will continue for as many years. And in such a scenario, the IT infrastructure can give a strategic advantage like none other. At least for now, Boeing seems to have it processes under control more efficiently than the European giant (which was beset by quite many technological issues in the past). Griffin is ensuring that Boeing does not give away the lead. My interaction with him was published in the Dataquest Magazine, the link being:(

‘My biggest challenge is to speed up IT absorption to meet changing business requirements’

In 2006, Boeing overtook Airbus to become the world’s largest civil aircraft company in terms of orders. In many ways, IT has been the driving force behind the company with over $60 bn in revenues.

Founded in 1916, Boeing was the first airline company to employ digital technology to designing an airliner, and under the aegis of the current CIO, Scott Griffin, it is committed to technology. Griffin has been with the company for over two decades, working his way up through various departments. Currently, he is entrusted with the responsibility of not only ensuring that the 155,000 employees spread across the world are connected and productive but also that the company stays a step ahead in the face of onslaught from across the Atlantic, ie the Airbus A-380. Scott Griffin, CIO, Boeing, shares his experience and vision with Shashwat Chaturvedi of CyberMedia News. Excerpts.

Boeing as a company has been evolving over the last many years, especially so in the last few years-from an aircraft manufacturing company to being an aerospace and defense technology firm. How is IT being used in this transition?
Information Technology is the lifeblood of a technology company. It is used to create digital (3D) design of parts, plan tools and processes. It enables “design anywhere, build anywhere”, design reuse, design partner collaboration, globalization of the supply chain, and provides tools for increasing productivity and growth.

777 was the first commercial airliner to be designed using CAD. How have technology systems evolved at the company and how has IT been strategic to it?
777 was the first commercial, digital airplane. For the first time, we did not test the fit of the roughly 4 mn parts by building a mockup. We designed the parts and assembled them in the computer, using the Dassault Systemes CATIA CAD/CAM software. Then we checked their ‘fit’, using computer simulation.

Today, Boeing and our design partners do concurrent, 3D solid design of parts, plans, tools and processes. This has enabled us to take significant cycle time out of the design/build process, and will allow us to create derivative models with minimal effort.

With over 155,000 employees based across the globe, how do you ensure connectivity within the organization and what kind of IT infrastructure is in place?
Our infrastructure is global and standard. Boeing has customers, suppliers and partners in over 100 countries. The only way to provide a reliable IT infrastructure is to provide a standard IT infrastructure.

How has your role of a CIO undergone a change at Boeing?
Boeing IT has become a proactive partner in helping the Boeing business units achieve their growth and productivity objectives. Boeing IT employees support the Boeing enterprise, but we also provide revenue-generating IT through our existing programs.

Which component or technology (enterprise) will be take the major share of your company’s budget pie in the future?
Collaboration systems and infrastructure will continue to be a key investment for us in the next few years. Boeing has also been closely working with various Indian IT firms. How has been the engagement so far and can you also touch on all the work that has been done through Indian soil?In 1997, I became the CIO of Boeing Commercial Airplanes and within my first year, I had built partnerships with 5 Indian IT firms. We are still working with all of them today, and have added several more. My Leadership Team and I visit those IT partners in person at least once a year.

We intend to differentiate ourselves from our competitors in the way we use IT products, not in building the best IT products ourselves. That being said, Boeing has a healthy IT business selling IT products to our customers, and we will continue to build IT solutions where we see external customer need.

What is the IT roadmap for the future and can you touch upon some of the innovations that have been brought out by your teams at Boeing?
My systems strategy in support of Boeing is to ‘buy and integrate.’ Our intention is to buy commercial, off-the-shelf applications and integrate them into our architecture rather than write the applications ourselves. We intend to differentiate ourselves from our competitors in the way we use IT products, not in building the best IT products ourselves. That being said, Boeing has a healthy IT business, selling IT products to our customers, and we will continue to build IT solutions where we see external customer need.

Your views on the subject of cross-cultural teams?
Diverse and cross-functional teams provide the most innovative and timely IT solutions. Boeing is a global company, and our employees, suppliers and partners are diverse in terms of culture, nationality, and geography.

You have been associated with Boeing for over 2 decades, how has the journey been, and what would you term as your high-points and the biggest challenges faced?
I have had fun in dealing directly with airline and government customers. We are a customer-centric company, and it is challenging and rewarding to work directly with our customers. My biggest challenge is shared by my CIO peers, it is speeding the absorption of enabling information technologies in order to meet changing business requirements.

Feature: Whither Indian Software Products?

When will we have a Google or a Microsoft from Indian shores? Is a question that bugs me quite often. We are the undisputed leader in software services, but there has been little attention paid to creating IP or to be specific, software products out of India. It is a shame that only a handfull of companies in India are developing products; considering the kind of experience we have in the IT domain. But things might change, as these few players are getting ambitious by each passing day and their successes might herald a whole new shift to product development.. In the article, published recently in the Dataquest Magazine, I spoke about a small revolution that is taking shape, and how this just might be it..(

Point of Inflection
How some Indian players have sniffed out the global product opportunity, and are gearing up for the $350 bn market.

Thursday, May 10, 2007
Faqir Chand Kohli in not someone who can be easily ruffled. The octogenarian, fondly referred to as the father of the Indian IT Industry, has a very benevolent and benign stance towards things in life-right from the way the government is trying to enforce reservation on meritorious institutions to the way his created entity (TCS) is performing, or even how Indian politicians are not progressively inclined and just a bunch of nincompoops. But one thing surely gets his goat, literally. Call India an IT super power and suddenly one can catch sight of a stirring in his pupils. Kohli perks up and speaks in a voice that hardly seems to come from the grand old man of Indian IT.
“India is not an IT super power, how can you even call it so, we account for a few percent points in the total global IT pie. Look around you in India, the benefits of computerization have yet to really percolate to the commonest of the common. It is a fallacy to call ourselves an IT power house,” he virtually thumps the table.
Peering into his graying pupils one can discern a tinge of sadness. After the outburst, Kohli seems to calm down, accepting the inevitability of things and returning back to his calm and serene self. “Services alone will not make us a super power. We need to make our own hardware, our own software, our own applications,” he says unequivocally. And that is the truth, the bitter pill.
The Story So Far
For the past decade or so, we have been toasting the success of Indian IT; the flattening of the world or the emergence of Bangalore tigers. Year after year, Dataquest keeps coming out with the Top 20 volumes talking about how Indian IT super heroes, namely, TCS, Wipro, Infosys and others are faring. The most celebrated IT body, Nasscom too compiles an annual report that talks about the growth of the export market and many such statistics. The robust annual growth of the IT industry, some 30-40% year-on-year seems to have had a lulling effect.
Everyone hopes that the good times will continue to be and the million dollar contracts will continue to flow. It will, before the law of probability catches up or some other low-cost populous destination comes up, or a shattering innovation replaces the countless number of individuals employed in India. It is not an IT Armageddon, but a course of life. Many analysts and industry watchers have warned of the same, time and again. So what needs to be done? The answer has always been there, as Kohli said earlier, Indian companies need to look at creating IP, creating hardware products and, more significantly, making use of our intellectual capital, creating world class software products.
Consider this. India’s largest IT company, TCS, which is into consulting, services and business-process outsourcing, started its operations in the year 1968. Meanwhile, Microsoft was setup by a bunch of college dropouts in 1975, purportedly to sell software for the highly popular Altair 8800. This year, TCS crossed $4 billion in revenues and employs some 89,000 people globally. While, the Giant at Redmond (Microsoft) reported revenues of around $44 bn in 2006 and some 70,000 employees worldwide. This is how India’s largest IT company and the largest American (global, to be more precise) company compare.
And therein lies the answer. Indian IT companies have been primarily focused on application software development and implementation unlike global biggies like Microsoft, Oracle, SAP and their likes. Creating world-class products is the key to success. The good news is, India, and more importantly Indian companies, are discovering the benefits of pumping money into R&D of new products.
Changing Gears
Mumbai-based i-Flex solutions is a classical success story. It was in 1991 that Rajesh Hukku convinced Citigroup, where he used to work, to invest close to $400,000 in a software venture of a different kind. Rather than create application or software for foreign clients, he would make a product. After years at it his company, i-Flex, launched a solution for the banking industry, namely Flexcube. The product was a resounding success and found customers across the globe. It became so hot that Oracle decided to buy a 44% stake in 2005. A year and more later, Oracle has increased its share and is now the majority stockholder in the company with close to 83% stake.
There are more such stories emerging out of Indian shores, like 3i Infotech, Subex Azure, Cranes Software, Polaris, Ramco and others. “While last year was a great year from product companies’ perspective (product revenues touched $481 mn), and the winners were really the big firms such as 3i infotech, IBS, Ramco, etc. But the heartening part is that unlike the biggies, higher market growth came from players such as Tejas Networks, Ittiam, Tekriti Systems, Newgen, Nucleus, Skelta, and Axcend Automation, Aftek, and other companies that are often labeled as small players,” says TR Madan Mohan, director (Consulting, ICT Practice), Frost & Sullivan.
Little wonder then that more and more entrepreneurs are ready to take a plunge into this evolving industry. Take for instance the numbers given by Deepak Ghaisas, CEO (India Operations) and CFO, i-Flex. He is also the chairman of the Nasscom Product Forum: “According to figures available with us, there are around 346 companies in India that are into product development. Of this around 228 companies have a product offering.” Last year, the numbers of product companies were pegged at 250; this translates into quite a substantial increase in numbers.
Ghaisas provides another interesting insight into the numbers. “Close to 60% of these product companies have been started by entrepreneurs, mainly Indians returning from abroad who want to start something of their own,” he says.
Services Hangover?
Products is greatly different from services, is a phrase that every player utters at least once during the conversation. Indian companies have been renowned to take a de-risked approach to investment, and services is well suited for it. The product is a high risk and oft times high stakes business, the margins. For failure are pretty low. One has to invest in building a product over a few years and then market it to all and sundry. The RoI cycle can be pretty long.
Subash Menon, founder chairman, managing director & CEO of Subex Azure sums up the situation succinctly. “The product industry is yet to evolve properly in India. With the focus on export of software services most companies have ignored this segment, and consequently, there are only a few players in this space. Yet none can deny that the opportunity is quite huge and Indian companies need to work at making the best of this emerging industry,” he says.
Meanwhile, Amar Chintopanth, executive director & CFO, 3i Infotech seems to be a bit generous towards the services companies. “Over the years, the services giants have created a favorable atmosphere towards India. They must be credited for building brand India. Thus, product companies from India are no more taken as mere rookies anymore and are regarded with a certain amount of respect,” he says.
The Pot of Gold
According to market estimates, the global software product market is pegged at $350 bn and the Indian market is estimated to touch $7 bn by 2010. Thus, it is a big opportunity for Indian players both in the export as well as the domestic market. Unlike the services industry, products players have been known to hone their products in India and other developing nations before taking them to more mature markets globally. This is what i-Flex did in the nineties, 3i Infotech also followed suit, and so did Subex Azure and a host of product companies.
India is also attracting a host of companies who are setting up their development facilities. Take the case of PTC, the company has its largest R&D centre based in Pune. Meanwhile, last year, Nvidia had acquired a small Pune firm, Pace Soft Solutions. At that time, Jen-Hsun Huang, the CEO had said, “We have invested close to $50 mn in India and plan to invest close to $250 mn in the coming years.”
Not just BFSI
There has been a bit of an issue with Indian product companies so far. They have been mostly focused in the BFSI space. The reasons are plenty-the immense success of products like Flexcube and Finnacle could have spawned a whole generation of me-too players. Also the fact that till sometime back the only Indian sector that was able to provide business was the banking sector. Thus, there are a host of companies in this space.
Yet, there have been a few ventures that truly stand out. One of them is Cranes Software that makes statistical analysis tools. It has a unique business model of ‘Acquire-Enhance-Expand’. Re-engineering them to add new features and functionalities, and expansion to the global market in itself involves a significant amount of R&D. Newgen is another noteworthy example in the document management space and many other ventures like these.
Big Services Daddies
It is not only the dedicated players that are eyeing this segment, so are the big daddies like TCS and Infosys. TCS, after its acquisition of FNS has been relatively active in the core-banking space. It has not really been worth too much in terms of revenues for the company. As TCS is getting much money from servicing clients, it does not seem to be too keen on the products game.
Infosys has been accelerating on the products domain. Its banking solution, Finacle, enjoys quite a good installed base in the industry and yet its contribution to the overall revenue is not something to sing about. “Finacle contributes approximately 4% of Infosys’ total revenues. However, this data point does not reflect the fact that Infosys has packaged software only in the banking solutions space while services focus continues to be across verticals,” says Sanat Rao, global head, Finacle Sales, Infosys Technologies.
The issue is of mindset, it is quite hard for a TCS or Wipro or Infosys to break the shackles and succeed in the new domain. As long as the services industry is going great guns, the big daddies will continue to remain marginal players.
Governmental Interference
Most of the industry players complain about how the government has done nothing for the industry at large. By imposing excise duty on packaged software in the last budget, the domestic market has been badly hit.
“It is the IT industry which created the culture of quality, globalization, technical education, building world class infrastructure and a brand to recon with in the international markets. I can bet that if the government had consumed all the tax benefits instead, India could be a laggard country as it is in all other sectors. Minus, the rise and shine of the Made in India brand of the software and the BPO industry globally, India has no international standing whatsoever,” says Hanuman Tripathi, MD, Infrasoft Technologies.
Menon from Subex wants organizations like Nasscom to play a more proactive role. “They really need to promote the industry like they have done for BPO. Once the word is spread, more and more entrepreneurs will come forward and the industry will flourish,” he says.
Kohli’s Gift
Coming back to the father of Indian IT. Kohli has not let age or anything come between him and his vision. He was responsible for recently engineering a CBFL (computer based functional learning) method that has provided literacy to many thousands in rural India. He even talks about creating a product for the numerous kirana stores dotting every town and city in India. “These stores with a computer and a custom made solution could then compete with the Walmarts and HomeDepots of the world,” he mentions.
Vision is the key. If an octogenarian can still think about creating products and solutions that can be used by millions, what really encumbers millions of computer geniuses and management whiz kids from doing so? It is perfect time to move into the product space, to do something truly path breaking. The product industry is indeed at a point of inflection.
Talking Services
For over a decade now, i-Flex has been famous across the globe for a single thing, a core-banking product known as Flexcube. The product, developed in the early nineties, has blazed a trail like none other. Even today, though the company has a variety of successful brands and products, Flexcube continues to be a dominant force. And one of the chief reasons, according to Deepak Ghaisas, CEO (India Operations) and CFO, i-Flex Solutions, has been its adaptability to different cultures and market dynamics.

“We have been able to do so through the service support that we provide to the customer. We do not sell a product but sell a solution,” he says. And all the while his cash registers keep ringing. Services today reportedly account for around 50% of the company’s revenues. Not small considering that i-Flex’s revenues is estimated to be in the range of $330 mn annually.

“Services is crucial to us, not only from the revenues perspective but a lot other ways as well. We have found that services can often act as an incubator for the product, nurturing it in the initial phase. It can also be a very good employee retention tool as the turn-around cycles in a product company can be quite long,” adds Ghaisas.

As part of the initial strategy the company had deliberately avoided going all out in the advanced economies, instead it went to developing economies in Asia and Africa. Now, i-Flex is taking another step to ensure its continuous success. The service profile of the company is improving with each passing day, as it ramps up for the next level of growth. With Oracle’s (as it holds around 83% share in the company) marketing and servicing might behind it, i-Flex can truly change the way Indian product companies have fared till date.
Vision is the key. If an octogenarian can still think about creating products and solutions that can be used by millions, what really encumbers millions of computer geniuses and management whiz kids from doing so? It is perfect time to move into the product space, to do something truly path breaking. The product industry is indeed at a point of inflection.
Going Glocal
Ambition is a good trait, but like any overdose, can be quite hazardous at times. There have been quite a few cases in the recent past wherein a company that was cash rich expanded rapidly and burnt itself out rapidly as well. As Alexander Pope had once said, the same ambition can destroy or save.

3i Infotech believes in taking steady but firm steps and part of its strategy is to go glocal. With around 80% of its revenue coming from overseas it is pretty obvious that 3i Infotech needs to have a presence in all the countries that it works in. But it can be a costly and risky affair. Opening an office in a foreign country means investing precious capital that could have been otherwise used. 3i Infotech has taken care of that problem by going global through the local way, ie, through appointed local partners.
“As we have around 300-400 customers and most of them based overseas, it naturally makes sense for us to expand overseas. Thus we have adopted a partner strategy. For instance, before venturing into any country, we conduct a thorough research on the market and its potential. Once convinced, we appoint a partner in that geography and operate through him or her. As the business expands we add on a few partners more, and after a critical stage, we ourselves enter the country,” says Amar Chintopanth, executive director & CFO, 3i Infotech.
Currently, 3i Infotech has a partner network in more than 10 countries of the total 50 that it operates in. By using a partner, the company saves a lot on the cost of capital that would otherwise need to be invested. “And this capital we plough back into R&D,” adds Chintopanth. For product companies in India that are short of cash, going glocal is the best possible option.
Inorganic Approach
Subash Menon is a man who should be truly admired for his gumption. An electrical engineering graduate from a university in Durgapur, Menon decided to float a company in 1992, without much help or experience. He had an idea and the urge to make it happen. Subex Systems evolved from being a telecom SI to a product company focused on the telecom space.

Then last year, Menon decided to go full steam ahead. In a move that surprised many, Subex acquired UK-based Azure Systems for close $140 mn in an all share deal. At that point Subex was worth some $25 mn compared to Azure at some $31 mn. The new entity, Subex Azure, was well suited for the telecom OSS market. But Menon is an ambitious man and recently went in for two more acquisitions in the range of $100 mn. So how does the organic strategy works?
“M&As are an important part of our roadmap and we pursue both organic and inorganic routes to enhance our product portfolio. As a policy, we work on a 4-year roadmap, it clearly states where we want to be in 4 years time and how. The recent acquisitions are based on the plan that we have chalked out for 2010. In the last seven years we have made seven acquisitions amounting around $320 mn in cash and stock. We are also in the process of raising around $200 mn by issuing Global Depositary Receipts (GDRs),” says Menon.
According to Menon, Subex Azure will continue to look at expanding the inorganic way, and is looking for possible buy-outs in three areas, namely revenue maximization, service fulfillment and service assurance. “We have evolved being a fraud management solutions company to being a telecom OSS vendor. Our aims have become bigger and so has our addressable market. We intend to go full steam ahead,” says Menon.

Pola-rising Market
Sometime in 2001, Polaris did a reality check. It was established in 1995 and doing reasonably fair for a services company, but Arun Jain, CEO, Polaris, knew that it would not be able to compete with the likes of TCS and Infosys. For all its efforts, it would be tough to break into the big club. It was around this time that Polaris changed tracks. It adopted the Blue Ocean strategy; instead of slogging it out in the highly competitive services domain, why not coast along in the relatively newer space of product development. The company’s expertise in the banking domain would also come very handy. But even the banking domain had a few strong players like i-Flex and others. There were quite a few players competing on the plank of technology and cost. Polaris decided to bring its technical expertise on the table, and introduced componentized products based on SOA principles.

“The idea was fairly simple, but complex at the same time. Rather than selling a product, we decided to present a platform to our customers, whereby he or she could pick and choose modules or applications that were required by the business rather than going for a big-bang implementation. We termed it as Non-Disruptive Measured Steps Method or NDMS,” says Jaideep Billa, CTO, Polaris Software Lab.
With NDMS, companies were able to migrate from another core-banking platform to the Polaris platform with little or no hassle. And the results were there for all to see. “Today, top 7 banks from the top 25 use our solutions in some way or the other,” says Billa. Though Polaris could not be a shining star in the services domain, it certainly emerged as a force to reckon with in the product domain.

Does it Tally?
Till a few years back, Tally was the poster boy of Indian IT industry. A homegrown solution aimed at the small domestic players, Tally really grew in real stature. Since Tally package was customized for Indian needs and requirements, it had completely dominated the SMB space.

Over the years, the big ones like the SAPs and the Oracles of the world were focused on the big companies in India. That was till a few years and now the very same international have woken up to the immense opportunity in the SMB space. Suddenly, Tally was under attack with international players products at lower price. Its price plank was removed, the growth was stagnant and suddenly the company seemed vulnerable.
To counter the situation, Tally is trying to reinvent itself. After being funded by Reliance Mukesh Ambani Group, that also picked up a stake in the company, Tally has been trying to reach out to different markets like the Middle East. It has also decided to take the game to the enemies’ court, by venturing into the ERP space. Tally also came out with a solution for the retail sector. Time will tell if Tally will be able to tally all the different things that it seems to be doing or will it, just not tally.