IMPORTED…but manufactured in your backyard

"Psst, Doesn’t matter if he messes it up. It’s not that important

anyway…"

What happens to a green-horn in a team? On Day I at his workplace, he is

assigned no work. On Day II, he begins scouting for work and lands some

peripheral tasks. On Day III, when the boss sees that the rookie has done those

tasks diligently, he is assigned some more work, stuff which no one else wants

to do. The youngster does that well too, but the boss would rather not have him

face the client.

But then, the client notices the rookie’s contribution and our man is

elevated to being the Big Boss’ left arm and then his right. Our man now works

on par with the boss and speaks his language…our man sure has grown!

Except in the case of software product development in India, the greenhorn

came of age long ago. It is only now that he has been ushered into the central

scheme of affairs. It has been well over a decade since global IT companies

started setting up development centers in India. What began as a destination for

back-end activity restricted to support, maintenance and quality functions, has

blossomed into the hot-bed of high-end research and development that is central

to the core of work done by its global parents.

For instance, the original model of i2 had all the product development taking

place in the US. "The thinking would happen there and the coding and

quality assurance would happen in India," recalls i2 President (Solutions

Operations) Pallab Chatterji. Chatterji informs that now, entire product lines

are anchored from Bangalore with the Indian team doing the thinking process and

the product management here. i2 committed a $10 million investment for India in

calendar year 2002. Set up in 1988, i2 has over 1000 employees in India.

Established in 1999, the Sun Technologies’ India Engineering Centre (IEC)

has over 1000 employees and 39,000 worldwide.

"From those early days of fixing bugs, we are now fully integrated with

the global group and work on the entire suite of products," says Murali

Subramaniam, VP-E Business Development (India Operations), Oracle India.

Oracle, which boasts of one of the largest developer forces in India among

the MNCs (2000+ with plans to scale it to 4000), has 70% of its people working

on e-business and development of new software. 20% of people work on software

maintenance like fixing issues with code and the rest of the 10% on operations

and infrastructure.

	“India plays a major role in IBM’s global Linux initiatives, and it also works on networking protocols, firewalls and file systems”
Dr Uday Shukla director, IBM India Software

"As is usually the case with new operations, the biggest challenge used

to be to get some good work. Now, there is so much work coming our way, we want

to just digest this and ask them to not send us more," smiles Pradeep

Kumar, country director, S T Microelectronics. Started in 1991 with 40

engineers, ST at Noida currently has over 1000 people.

ST Noida specialises in developing IP’s for various end applications, SOC’s

and embedded software to be utilized by ST worldwide.

Infogain, India Development Centre MD Abhay Sinha explains that earlier, all

non-client facing activities with higher turn-around time were sent offshore.

"Now we are focusing on long-term client associations like multi-year

outsourcing deals with level 1/2/3 support for products and applications,"

says Sinha.

Impetus Technologies’ CEO and president Praveen Kankariya informs that the

focus of the Indian arm has been on designing and developing software. "We

are seeing more of the design and architecture component also moving to

India," he says.

Up on Volumes



In the past, while Indian software services companies boasted of huge state

of the art complexes to house their army of software developers, MNC operations

were restricted to a much smaller number of engineers often operating out of

elegant but rented offices.

As the MNCs ramped up the headcount in India, "our own premises"

with swanky buildings full of engineers became the order of the day. The last

three to four years have seen a flush of activity in the setting up as well as

expansion of development centers here.

In 1991, Motorola Global Software Group set up its first software development

center with a dozen professionals out of a hotel room in Bangalore. Today, GSG-India

is the largest software center for Motorola with 900 professionals. The focus is

on R&D efforts in next generation wireless infrastructure and subscriber

products especially in CDMA. In the offing is a $13 million investment. Motorola

GSG has over 3000 professionals worldwide.

Intel’s India development center too started with 10 people in 1999 in

Bangalore. With 960 people on board currently, the company plans to grow to 3000

people by 2005. Intel worldwide has 80,000 people.

	“It took 2-3 years and an internal overhaul to meet Sun’s standards. Now, key work comes to India”
Vijay Anand MD, Sun Center

"The Bangalore R&D Centre is an extension of Cisco’s R&D

efforts in San Jose. With Cisco staff and the dedicated resources of our

outsourcing engineering partners, HCL, Wipro and Infosys, there are

approximately 2300 engineers working on Cisco projects in India," informs S

Devarajan, vice president and head, Cisco India Global Development Center.

"We have strong skill sets in areas such as IOS, voice-over-IP, mobile

wireless, network security, DSL, and ASIC development," says Devarajan.

Cisco has 34000 employees worldwide.

Set up in 1998, Adobe’s India center now has about 200 people as against

3500 worldwide. Managing director Naresh Chand Gupta explains, "We started

with component technology development. Over time we got responsibility for the

development of entire product. In fact, the India center is responsible for the

development of Acrobat handheld readers on Palm, PocketPC, and Symbian platform.

PageMaker 7.0 was developed out of India and now the India team has ownership of

FrameMaker."

SAS Global Services (SGS), a subsidiary of business intelligence company SAS

Inc was incorporated as an independent entity in 2000, with headquarters in Pune.

Started in October 1996 with 30 people, Infogain’s India development center

has 170 people. The company plans to increase the strength to 500 by the end of

financial year 2003-2004.

"Initially the Indian center started with only software development

work. Within weeks, the software testing team was added and a year later, the

Software Product Support — 24X7 center, was operational" says Ashok

Belle, Managing Director, Novellus Systems (India).

Hewlett Packard’s R&D laboratory in India currently has about 1000

people. HP has approximately 140,000 employees world wide. Established in 1989

in Bangalore, HP-ISO has two centers — one focusing on activities related to

product development for the enterprise business of HP and the other for HP’s

Services business to deliver software solutions.

Analog Devices Inc’s India product development center has 90 employees and

8500 employees worldwide.

The INS India Development Center (IIDC) was set up by the Integrated Network

Solutions (INS) division of Lucent Technologies in 2000. IIDC started with 15

engineers and its current strength is approximately 380. Lucent Technologies has

over 40,000 employees across the world.

Network Programs began its operations in US in 1992 and then in India in

1996.

"From a subsidiary set up the Indian operations have recently acquired

the status of being Network Program’s headquarters. With this shift, India is

going to be the hub of activity and decision making for the company," says

Network Programs CEO Vipin Tyagi.

Invensys’ India Development Center started operations in Mumbai in 1989 and

Hyderabad in 1995. Invensys has about 600 people today and plans to recruit

another 100 in the next few months. Its subsidiary– Baan has about 3000

employees worldwide and Invensys about 58,000.

	“Great communications facilities have ensured that our people are wholly integrated with the global organization and have equal opportunity and work”
Pradeep Kumar country manager, ST Micro

The Canon software development center has 40 engineers now. Additionally 75

engineers (in other Indian software companies) are working on the outsourced

software projects. Canon has about 75000 employees globally in total and about

5000 in design and development of products.

Impetus Technologies, started in 1991 has 150 employees currently and has

plans to grow to 200+ by the end of 2003.

The India Development Center of Divine was established in 1999

Up the value chain



Even as MNCs keep up the numbers game, rapidly ramping up employee numbers

and lay down infrastructure to simulate "near US-like" work

conditions, what’s more important is the kind of work that is being done in

these centers.

"So far, development centers in India were being used to drive

bottom-line savings. But there is a quantum jump in ROI if they use the same

investment to make a difference in the top-line (that is develop new products

and features that will generate revenue)," says Srivibhavan Balaram,

R&D Lab Director, Hewlett Packard, India.Approximately 35% of the worldwide

R&D for HP-UX is done in India.

For Storage and Openview Software, approximately 18-20% of the worldwide

R&D is done in India. ISO has R&D ownership of several product lines

within HP — it conceives, architects and releases products out of Bangalore.

HP ISO totaled over $40million in the past year on these three categories of HP-UX,

Storage and Openview software.

"Almost 25-30% of software in Motorola phones is developed and tested in

India. We have spearheaded WAP, Bluetooth and IP telephony technology in

Motorola and developed the GPRS software," says Soumitra Sana, MD, GSG

India. The center also developed Motorola’s WiLL system in 1997.

	“Intel has a uniform incentive scheme. An invention disclosure fetches you $100. If it gets selected for a patent, you get a well-deserved $1,000”
Ketan Sampat Intel India

Vijay Anand, MD, India Engineering Center, Sun Microsystems describes the

shift to high-end work as a natural evolution process. "It took 2-3 years

and several internal initiatives to develop our people to meet the high

standards within Sun and now we are beginning to see key work being allocated to

India" says Anand.

Novellus’ India center works with software products dealing with Real time

operating systems, embedded, and robotics technologies. "These technologies

are used in Novellus equipment and processes to make the interconnect structures

that link transistors within a chip," explains Ashok Belle, Managing

Director, Novellus Systems (India).

Synopsys’ India Development center started with test and validation

activity followed by internal application engineering. "As the site grew in

experience and maturity, more and more core software development activity

started to originate from here. Today, major portions of key releases are taking

place from our engineering teams in Bangalore and Hyderabad," says Pradip

Dutta, managing director Synopsys India.

The IBM Software Labs(ISL) portfolio includes worldwide support for diverse

IBM products in areas such as Operating Systems (OS/2 & AIX ) , Web

Application Servers ( WebSphere), Distributed File Systems, Compilers (Visual

Age), Office Automation products (Lotus SmartSuite) and Middle—ware

technologies like MQSeries and Java.

Today ISL owns product components across key IBM product offerings like

Websphere Commerce Suite, Websphere Business Integration, Lotus SmartSuite on

OS2 & Windows, DCE/DFS/AFS, TX Series (CICS and Encina among others.

	“We are catching up in the areas of requirements management and system engineering. We are away from the main markets”
Dr Chandan Haldar Lucent Tech

"Canon is currently working on the development of the Software

Development Kit (SDK) in the area of printing technology and mmbedded software

print server. (An SDK is a set of commonly used functions that provide an

abstraction for high level programming," explains Hemant Kumar, director

and GM, Indian Software Development Center (ISDC), Canon India.

The Lucent arm has been a full-lifecycle product development center right

from the beginning. "We transferred the product development, validation,

and release management of several core revenue generating products in various

areas of Network Operations Software (NOS) and Multiservice Switching (MSS) to

the IIDC progressively over the last two years. We also started the development

of our next generation network element management system products based on our

new Navis iEngineer platform at the IIDC," says Dr Chandan Haldar,

Director, INS India Development Center, Lucent Technologies.

The Invensys India Development Center has been working on software products

in the areas of Human-Machine interface (HMI), Process Automation, Simulation

and Optimization.

Analog Devices started with DSP IC (chip) design and then moved into DSP

software. "We are now designing next generation high performance DSP

processors from IPDC. Even in DSP software we started with libraries, now we are

developing algorithms and software modules for video, audio and wireless

applications. We have also started a analog and mixed signal IC (chip) design

group," explains Dr S Karthik, Managing Director, India Product Development

Center (IPDC), Analog Devices Inc (ADI).

Even at SAS, work on building industry-specific intelligence data models

began under strong project direction and control from its US and Europe

organizations. "But an international award we won last year for one of the

products built in India and the growing confidence of the parent company has

seen a transformation. SGS now has a role in strategy and direction, and greater

autonomy in execution," explains MD Vivek Gokarn.

	“Being a virtual extension of the HQ at San Jose, there is no question of ‘allotment’ of work”
S Devarajan V-P and head,Cisco India Global Development Center

The Indian arm of Divine offered software consulting services in e-commerce

and Client/server technologies. "It is now involved in the development,

maintenance, testing, and global technical support of the cutting-edge products

in the areas of customer interaction management, content management, and

collaboration," says Dr Gobind Baghasingh, director (operations) at Divine

India

But then, the abilities of Indian software professionals have been known for

a while. Why is it that MNCs have upped investment in India over the last few

years? While "cost-effective quality" has been cited as the prime

reason, the Indian contribution to products released by these companies as well

as the patents filed by the Indian arms indicate that the quality aspect has a

greater role to play in this transformation.

"Patent potential"



Techies they say, have one track minds. When engineers work on technology for
products, they may not be aware of or interested in the patent potential of

their work. It is up to the company to tap this potential. ST Noida has now

identified about 10 ‘patent mentors’ (one per team of 80 people) in the

company who closely watch and capture potential patents. "These patent

inventors also get financial compensation. The patent belongs to the company,

but the person is acknowledged as inventor," informs ST Micro country

director Pradeep Kumar. "We hope to surpass ST, USA with our plans to scale

operations," says ST Micro Director Vivek Sharma, explaining that ST Noida’s

"Patent potential" initiative is a step in this direction.

	“Companies are redefining what is core activity and what is non-core, and what processes & R&D are critical”
Ravindra Datar senior analyst, IT Services, Gartner India

IBM India has a group, which guides and encourages employees to file patents.

Canon organizes an annual "patent filing" training program in Japan

for its engineers.

Intel India president Ketan Sampat says that at Intel, employees are told

that whenever they think something is innovative, they are asked to write it

down. "There are Intellectual Property Parties held–festive events where

invention disclosures invariably come up. After that, patent lawyers examine

these and shortlist the ones that are really unique," explains Sampat.

Intel has a uniform incentive scheme for employees. An invention disclosure

fetches you $100. If it gets selected for a patent, you get $1,000.

Adobe too has a bonus scheme where an inventor gets up to $5000 for filing a

patent. Novellus and Analog Devices too have launched "patent

awareness" initiatives.

Caveat: Software exports



Does this success of MNC development centers threaten to poach into the

talent pool of Indian IT’s original success story–software service exports?

Are Indian software companies losing out?

"Captive development centers being set up by potential clients could

result in a potentially huge market lost to Indian software companies,"

admits Ravindra Datar, senior analyst, Gartner.

"Indian companies should highlight the fact that R&D could cost

significantly less without any adverse effect on quality by outsourcing to

Indian vendors" says Datar.

Swerving past roadblocks



Even as Indian employees make waves in boardrooms across the globe, there

are hurdles, which could slow down the joyride of the MNC juggernaut…

Infrastructure issues like power, communications, better roads,

transportation facilities and international airports, remain a problem.

So are customs’ restrictions on sending and receiving hardware and

prototypes, which result in delays and long drawn procedures. SAS Global

solutions MD Vivek Gokarn points out, "The more the nature of high tech

work that global companies want to outsource, the more they are zealous of

guarding it. Indian IPR laws and their implementation do not provide adequate

protection to MNCs. High-end work is mainly restricted to fully owned

subsidiaries, and pure R&D services companies beyond this holding pattern is

not very common," says Gokarn.

The right people?



Experienced engineers with deep domain skills in niche areas such as EDA

software development, are still in short supply. Dutta of Synopsys India points

out that the absence of a proper VLSI curriculum in Indian engineering colleges

is one of the main hurdles.

Dr Karthik explains that getting experienced (high quality) engineers was a

problem, especially in niche areas (high-speed analog design etc).

"However, we see an improvement on these fronts as more Indian engineers

are relocating from the US to India. We still need to cultivate more specialists

who have in-depth knowledge and experience in their areas," he says.

And often, the problem is not the expertise, but the attitude.

	“Filing a patent fetches an inventor a $5,000 bonus and an invitation to an exclusive gathering in San Jose with the top management”
Naresh Chand Gupta managing director, Adobe

"The Indian mind set is trained more to follow than to lead. While

Indian engineers are exceptional when it comes to delivering a well defined

piece of work, we need to improve our ability to deliver leading edge technology

where there is no one to follow," points out Srivibhavan Balaram, R&D

Lab Director, Hewlett Packard — India.

Ramam of Invensys points out that with more and more high-end work moving to

India, the expectations are also growing. "India has to prove its

capabilities in delivering high quality products and services at the right time.

Companies have to invest in bringing in more professionalism."

Says Oracle’s Murali Subramanian, "As we reach a critical mass, it

becomes absolutely important for the India center to outperform its counterparts

elsewhere." The greenhorn is no novice anymore. But only if he evolves to

be the best, can one say that our man has truly…arrived.

Manjiri Kalghatgi in New Delhi

The Indian Face of Global Products

Globally launched products and solutions with significant contribution from

their India research and development centers:

Adobe



Almost all Adobe products–InDesign, PageMaker, Illustrator, Acrobat,

Photoshop, Premiere, After Effects, Photoshop Elements.

Analogue Devices



The SHARC family of high performance floating point DSP was designed in

India.

Baan



Close to 50% of Baan products launched globally are developed in India

including recent releases like ibaan Procurement, ibaan sourcing and ibaan

service. The India center contributes in a major way to the Customization of

Baan ERP

Canon



Among others, Canon India has jointly helped develop ImageWARE Publishing

Manager, Document Composer, Document Manager, FormCraft Pro along with other

Canon development centers.

Cisco



SNMS or Cisco’s Small Network Management Solution as well as Cisco Emergency
Responder has been conceived, designed and totally developed in India.

Divine



Customer Interaction Management products like Divine NetAgent Suite, Content

Server and Collaboration products like MindAlign.

Hewlett Packard



Some of the HP enterprise products where HP-ISO has contributed

significantly include HP-UX, HP OpenView, Virtual Vault, Domain Guard, HP

Telecom Product Line of Opencall (OC Portfolio)

i2



i2 Supplier Relationship Management (SRM), Demand Chain Management (DCM),

Supply Chain Management (SCM).

IBM



India Software Labs is key to developing, enhancing and supporting versions

of software products like WebSphere Application Server, WebSphere Commerce

Suite, WebSphere MQ, Tivoli, Lotus Smart Suite among others. IBM Software labs

in India plays a key role in IBM’s Linux initiative, working with other IBM

labs located in the US and around the world.

Intel



eBiz applications, Media Switch

Network Programs



Net Pacer, Net Relations, Net Beeper in the VoIP market.

Novellus



The suite of deposition products like, Inova, Sabre, Speed, Vector have

features that make them highly productive in the dielectric and metal deposition

technologies. The India center has been involved in developing many of these

features.

Oracle



The India development center has contributed to the development of various

components of the end to end e-business suite Oracle 11 i. There has been

significant contribution to Warehouse Management, HRMS (Payroll and iRecruitment),

Students System, Oracle Healthcare, Sales and Marketing and Advanced Planning.

Lucent



The flagship ATM network management system of Lucent, namely Navis Core and

Xtend products are engineered and released by the IIDC with complete

responsibility and ownership. The engineering of several other product lines

such as the Navis Voice Activation Manager, and the Operations Maintenance

Center for the wireless customers, happens at the IIDC.

SAS



The India center has contributed to the development of SAS®

Telecommunications Intelligence Solution, Banking Intelligence Solution,

Insurance Intelligence Solution

ST Microelectronics



ST, Noida is the central R&D group for latest technology like the 90

nanometers– Embedded memories/ Memory generator, I/O cell libraries, Core cell

libraries, mixed analog Libraries including PLL, ADC/DAC

Sun



SunONE Application Server v6 and v7, Sun ONE Webserver v6.0, Sun ONE Identity
Server, Sun ONE Portal Server SRA, Sun ONE Meta Directory, Solstice Enterprise

Manager (SEM), Sun Management Console (SunMC)

Synopsis



Apart from significant contribution to latest releases in the company’s

flagship simulation program, VCS and testbench software Vera as well as key

modules of the Physical Compiler product are being developed in Bangalore.