Applying IP

What Wipro once called the "silent revolution" sweeping Indian IT
is now official. The push towards value-added services has never been so IP
studded. Telecom, automotive and finance sector clients have taken the initial
lead in the Indian IT services R&D movement. Tier 1 companies TCS, Wipro,
Infosys and Satyam were among the first to close in on the new differentiator
and carve out their niches in the worldwide engineering and design services

Says Wipro COO Dr A.L. Rao, "The rate of change in providing services is
accelerating, while the time to respond to maintain competitive advantage is
diminishing. Engineering services are the new differentiators."

IP DESIGNS: Wipro’s Electronics City campus is the epicenter of the next wave of outsourced engineering and product development.

Wipro’s technology training currently comprises four streams covering 78
courses. Its automated assessment center caters to over 30 technologies. The
project and architect readiness programs ensure a readily available pool of over
4,000 Six Sigma trained employees at any point of time. Its team of over 700 PMI
certified consultants is now the highest in India.

The track record is lengthening with the number of IPs and "invention
disclosures" which Wipro has gathered down the years. The company filed 24
disclosures last year alone for point and framework solutions as well as IPs,
with two patents pending in the optical networking and wireless spaces.
"Yes, most IPs generated by us still belong to the customer," says
Ramesh Emani, Wipro’s president for Product Engineering Services (PES).

Wipro had formed the PES practice after the departure of CEO Vivek Paul in
June this year, by merging its Telecom Solutions and Embedded Product
Engineering groups.

Wipro and competitors like TCS, Satyam, Infosys and 3i Infotech have also
exercised the option to reuse IPs in similar innovation environments for other
clients. "Reuse of IPs is high on our agenda. Reusable IP blocks from our
portfolio of networking, wireless and wired communications solutions are helping
to reduce time-to-market for our clients. We update our Reusability Index
constantly, as we study the sustainability of an earlier IP for every new
product or software tool which we develop further down the line," says

Significantly, what has happened up the line is substantial. PES’s Consumer
and Mobile labs, under Emani’s supervision, have special focus on verticals
like computing, storage, consumer electronics, automotive electronics,
industrial automation, semi-conductor and mobile devices.

A multitude of IP blocks PES built in recent years include standards like
IEEE 1394, WLAN algorithms and BPM solution Flow-briX to manage complex workflow
systems, besides hands-free telephony solutions, video-over-wireless,
Linux-based mobile phones, and digital TV circuitry.

Take the 5,000 channel digital set-top box which the Consumer Lab designed
for semiconductor company Renesas Technology. The set-top box with 2 MB of flash
memory and 16 MB of SDRAM has wide distribution in European markets, and is
designed to deliver TiVo quality sound and seamless analog-to-digital

INTEGRAL CIRCUIT: Designed to receive and finetune over 5,000 TV channels, this set-top box prototype features an analog-to-digital conversion system, which can record programmes in real-time.

The ubiquity of development conforming to open source standards has been a
singular quality of Wipro’s IP delivery engine.

The over 500-strong Mobile Lab delivers a range of Linux-based application
for mobile phones. Mobile Lab has developed entire GUIs running embedded Linux
apps – via projects like ‘Aqua’, Wipro’s Linux-based mobile platform —
featuring Web and e-mail clients, ringtones, WAP browsers and phonebooks.

Leading telematics products supplier IxFin Magneti Marelli (IMM) turned to
Wipro when it wanted to provide its client Fiat a fully integrated infotainment
system featuring a global navigation system, GSM phone, audio, Internet access
and climate control. The human-machine interface was developed in time for the
launch of Fiat’s new model. Insurance and pensions supplier.

The excellence which characterizes engineering IP delivered by Indian IT
services vendors has attracted increasing attention from technology management
thinkers like Keith Goffin, Professor of Innovation and New Product Development
at the Cranfield School of Management. Prof Goffin who featured Wipro’s
product development methodology in his bestselling book "Innovation
Management Strategy and Implementation using the Pentathlon Framework",
says, "Today, most companies recognize that they can’t do everything by
themselves – the sum of X+Y amounts to more than X+Y. Clients know what they
are looking for. They come to India not just to develop products and services,
but are also looking for help to develop the process of how they do that."

Even as Wipro deploys over 150 buses to ferry its over 40,000 employees to
its Sarjapur Road and Electronic City campuses every day, the rigours of R&D
and design innovation are equally challenging. "Yes, infrastructural issues
do persist and the whole world knows the issues involved, but consider the
thrill of being part of a global innovation landscape which makes up for all
this," says a Wipro insider. He reveals that many of the innovations
pioneered by a company, which is known to be the world’s largest third-party
outsourcer, have already hit the US and European markets.

Leading Edge
In fluorescent-lit, cluttered rooms housing a tangle of LCD monitors and
wires, Wipro engineers have for over four years been designing tech blueprints
which are changing the very paradigms of how handset applications will work.
"The open source effort has been significant for us, because apps can be
designed with minimum proprietorial issues to contend with, and also reach the
market faster," says a Wipro engineer.

MOBILINUX: The Linux developer base in wireless domains has pioneered open source applications written for worldwide handset and PDA makers

Wipro’s over 10,000 strong R&D workforce caters to over 120 clients in
the US and Europe, and is fast helping reduce the company’s dependence on
onsite revenues. Revenues from R&D in the telecom, embedded software and
services segments currently forms 36% of Wipro’s total revenues.

While R&D reduces dependence on onsite contracts, reducing the onsite
component is now also a validation of the vendor’s ability to handle larger
contracts by its offshore workforces. Remote infrastructure management is a key
horizontal which is enabling quicker and cost-effective client servicing out of
India. Currently, Wipro remotely manages client datacenter processes out of its
Bangalore facilities. A diverting twist to the above is: the growing product IP
volumes, in combination with remote networking capabilities, will help IT
offshoring vendors deliver proactive services to clients, even deliver design
prototypes directly to the customer’s clientele, and assess how they would
work on third-party facilities. This could further shift the geographical
equation in favor of offshoring, say industry experts. Navi Radjou, Forrester
Inc’s VP for Research, who coined the term "adaptive supply
network", says, "Extended engineering will help collect the voice of
the customer, and companies like Wipro can use their market and engineering
prowess to encourage customers to participate in the global innovation

Forrester estimates that outsourcing in the global electronics industry alone
is growing at 20% annually, even as Indian IT providers aim to capitalize on
this trend. Dataquest estimates a potential $24-billion market for automotive
design outsourcing alone. According to Nasscom, India’s engineering and design
services market is poised to grow to $11 billion by 2008-2010. While, McKinsey’s
2004 Global Survey of Business Executives found that more executives of large
companies say that they plan to invest in R&D facilities in India than in

Embedded Linux work has been a key component in Wipro’s wireless and
automotive design efforts. Customer names like Cisco, Lucent, Morgan Stanley,
Nokia and General Motors have only recently entered the public domain.

To romance a dragon…
Significantly, time-to-market margins will be reduced further — from
months to weeks – as India’s services vendors climb the value chain through
detentes with manufacturers. Radjou says that further reducing the time to
market by tieing up the manufacturing end will be among the key challenges in
evolving the global "innovation network" — a product value system
comprising overseas financial sources, the outsourcer, R&D groups, and
manufacturers. "Indian IT services vendors are scaling the value chain
rapidly through their R&D efforts. It’s something which we couldn’t have
imagined a few years ago. Innovation networks are the next wave and through
outsourced engineering projects, India is spearheading one end of it. The other
end of the rectangle will firm up when production JVs between Indian R&D
vendors and Chinese manufacturers begins to happen."

Analysts agree that China’s manufacturing capabilities will be key to
transforming Indian inventions into innovative products. Their optimism is
rooted in the fact that the outsourcing boom has value-adds embedded in the
delivery mechanisms which makes it possible — a process which feeds on itself,
and which analysts like Radjou and Prof Goffin believe, is unstoppable. Just
that "the really high-end work we all expected is happening right now, and
it’s a far cry from the days of back-end processing and sundry help desk jobs
which Indian outsourcing vendors were saddled with," Radjou notes.

"Innovation is now a formal business practice, and we would like to
stimulate innovation beyond just specific product development projects,"
adds Emani.

The "consultant" armies of TCS, Wipro, Satyam and Infosys now run
into thousands. Engineering services personnel with these companies will be
crucial to supporting consultant prescriptions for customers and implementing
bleeding-edge engineering design solutions out of India. Innovation now feeds
the Brand and is the revenue stream of the future; in Premji’s words,
"The basis for both survival and success."

Ravi Menon

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