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

Pune.

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

markets.

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