Destination R&D

Over the years, as India’s software reputation gradually got enhanced, more
and more global IT majors started having their offshore development centers (ODC)
here. If the first phase of their passage to India involved setting up sales
offices to tap the potential of the large domestic market, the second phase
heralded the establishment of these development centers-an unstinted
acknowledgement of the software expertise available in the country. While many
of the organizations involved in product development (software or hardware)
opted for their R&D centers here, even software services players set up ODCs
to fully leverage on the benefits of cost arbitrage.

If Bangalore and Hyderabad were the popular choices for these
development centers in the initial stages, last few years have also witnessed
Pune emerging as a viable destination for this purpose. Reasons are not far to
see: strategically, Pune offers a significant base of skilled manpower; a
plethora of small innovative companies existing for many years had created an
ecosystem for research excellence, and, inversely, the saturation of Bangalore
in housing large development centers. Dataquest takes a snapshot of three such
MNCs, globally significant in sizes, which have their R&D and ODC bases in

BMC Software: Pune Makes Magic
The Pune center might be only one of the 11 ODCs across the
world for this Houston-based $1.46 business service management software
provider, but it accounted for nearly two-thirds of its total R&D initiative
globally. In fact, during 2004-05, the company announced further investment of
$5.5 mn for expansion of its Pune operations. This was primarily utilized to
make the Pune center the global R&D hub for its Magic Solutions division,
acquired from Network Associates (now, McAfee) in February 2004. Magic is now
part of BMC’s Remedy software line of business and provides help desk software
and related solutions targeted at small- to mid-sized organizations. More than
80% of R&D resources for Magic Solutions is now being managed from the Pune
development center.

However, this does not mean that the center is not involved
in R&D on other BMC solutions beyond Magic. Many of the component
engineering for SmartDBA in entirety is done out of here; it handles the
software configuration management and delivers patches for Marimba; it also
develops the action requirement systems for all verticals on Remedy Classic; and
last but not the least, it is working on development of different enterprise
applications for Patrol Enterprise Manager.

Encouraged by the quantum and quality of work delivered by
this Pune center, BMC has now announced further expansion plans for India. Its
total investments in Indian operations are expected to reach $12mn by the
beginning of 2006. The company also plans to substantially increase the number
of staff at its Pune development center-from 650 to 1000-by end of next
year. It is even consolidating its operations in the city into one facility with
a capacity of over 1500 people. Meanwhile, it is also cooperating with Wipro and
Infosys on security products. Under a formal agreement, Wipro offers system
integrator services on BMC solutions and resells BMC’s Control-SA product
suite as part of their enterprise solution offerings.

Says George Harrington, senior VP and CFO, "Since the
opening of our Pune center in 2001, we have witnessed tremendous growth. The
Pune center is BMC’s fastest growing operation and is second to our Houston
office in terms of number of employees. In anticipation of continued growth, we
have committed to expanding the current facility so that we have enough space
for 1500 staff in the years ahead." Adds Dan Barnea, senior VP, Research
and Development, "R&D projects for the new SMS, Remedy, Magic and
Marimba lines of business have also been initiated, with BMC India having more
ownership on most of the products. We started with core competencies in IT and
R&D, and have subsequently expanded to other areas including corporate
development, field support, business intelligence and customer support. We are
now firming up plans to establish some of our Human Resources and Finance back
office functions in Pune too."

Symantec India: Snapping Up the Opportunity
Even a few months back, Symantec, the world’s fourth
largest software company, was not at all present in Pune but today it has the
largest presence in the city amongst all MNCs. This transformation has happened,
thanks to the Symantec acquisition of Veritas, followed by that of Bindview.
Both Veritas and Bindview have significant presence in the city-in fact,
following a $50 mn investment in 2004-05, the Pune facility had become Veritas’
largest R&D center globally. The Veritas center currently employs about
1,100 and accounts for about 20% of Symantec’s development staff worldwide. In
addition, Bindview, that focuses on compliance-related security has also come
into the Symantec fold with its 185 people development center in Pune.

There was more international recognition for the Symantec/Veritas
Pune center in FY ’05, as it was awarded a patent for FlashSnap, a product
feature, in Veritas Storage Foundation. However, such recognition is nothing new
for this now Symantec facility that was started in the city way back in 1991.
The Pune team has always been pretty active on the R&D front with more than
40% of all patent disclosures coming from here. Even Symantec officials agree
that there is a disproportionate focus on IP here but add that low cost is not
the sole driving factor for expansion plans in the city. Instead it has always
been access to talent and ability to hire, besides expertise in product
development, that had encouraged the company to grow the team in Pune-a trend
that is now expected to continue in the Symantec regime.

Some of the key areas the center has been involved in R&D
activity include storage management, data protection, application performance
management, and disaster recovery. Some of the products handled include Veritas
StorageCentral, Veritas Backup Exec for Netware, Veritas Cluster Server
QuickStart, Veritas Bare Metal Restore, Veritas File System, and Veritas
Foundation Suite. Now under Symantec dispensation, the center, till now mainly
into product engineering, has been assigned to identify new products for the
company’s markets worldwide making it assume product management functions.

An upshot of the transformation of the Pune development
center into a location for identifying new product opportunities is that
engineering managers at the center are getting into business-facing roles. The
center is exposing its senior engineers to field operations to ensure that they
can make the transition from technology innovation to product innovation.
"We want our engineers to do the market and business analysis," says a
senior company official. This year, the Pune center is experimenting with a
number of ideas that may lead to new products. For example, it is looking at
offering availability and performance products for customers using enterprise
business software from SAP and is working on this with Wipro, which has a large
global SAP practice. The center is also looking at a product for the DR market.

Parametric Technologies (PTC): Carving out a Niche
Though PTC, one of the global leaders in CAD/CAM and
engineering software, has its India headquarter based out of Bangalore, the
R&D center is located in Pune. With more than 500 people, the Pune center
housed at the recently developed Marisoft IT park is the company’s single
largest location globally, bigger than the other development centers in the US
and Israel. Providing software products for CAD, collaboration and data
management, PTC India has carved a niche for itself in the CAD/CAM/CAE and PLM

The Product Development System at the center combines three
flagship products namely Pro/ENGINEER Wildfire, Windchill ProjectLink and
Windchill PDMLink. Since the acquisition of Computer Vision in 1998, the R&D
center has been engaged in all stages of product development including design,
development, integration, technical writing and localization to suit the Indian
market. The largest facility outside the US, it has worked upon Pro/ENGINEER,
Windchill, Pro/ INTRALINK, CADDS and Optegra. The center also offers product
support to customers across the world.

Asustosh Parasnis, who heads the Pune center informs that the
Indian R&D team has been working on the recent versions of both Pro/ENGINEER
and Windchill in collaboration with PTC’s US-based R&D center. With
already more than 500 people, it plans to augment its sales and support staff by
15% over the next three years. The PTC Indian subsidiary headquartered in
Bangalore earns substantial revenues from the domestic market, but wields no
control over the Pune center that reports directly to the US head office. Though
the Pune facility also houses a 40-man global call center, it does align with
the Indian sales team to provide occasional support to the domestic customers.

R&D Hub of the Future
These three might be the most well-known companies that have
set up their research and development bases in Pune, but the city also houses
R&D centers of a plethora of companies-ranging from small outfits to
mid-tier organizations. Though Pune also boasts of several ODCs for IT services
companies, there is a significant difference in manpower required for software
development work and research work. While software services work is largely seen
as routine work, R&D needs technological creativity in a person. What this
means is that an R&D professional needs to have an innovative bent of mind,
which Pune has been able to sufficiently supply. According to experts, the city
that is already home to a strong automobile and engineering industry, promises
to become fertile ground for IT organizations too for research work. While the
city in the past was called the ‘pensioner’s paradise,’ the current
R&D invasion can change this to ‘R&D hub of the future.’

Rajneesh De

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