We will encourage our customers to move to the SaaS model

How do you see the market for OPD? If you look at 2008 as a segment in
outsourcing, how did OPD perform?
Typically the OPD market has been viewed as a stable and steady market. In
India the OPD market can be divided into three segments: large MNCs who have set
up captive centers; mid-size product companies who outsource their ODCs; and
venture funded startups that outsource their projects. However, there is often
an overlap between these segments. For instance, many MNCs maintain ODCs with
Indian vendors despite having their own captive centers. More than 70% of the
OPD business in India is from captive centers. The second half of 2008 has been
a tough year for all segments within the OPD space. My view is that 2009 will
see the OPD market slowing down even further. In 2008 the OPD division of
Calsoft grew by 29% but we do not expect the same momentum in 2009.

What are some of the major outsourced product initiatives you have worked
Recently we have formed a partnership with Ixia along with a five year OPD
contract. Ixia is a global leading provider of performance test systems for
IP-based infrastructure and services. We are providing critical end-to-end
support for development, testing and sustenance for the Ixia product lines. In
addition, Calsoft has dedicated labs and ODCs for many customers including Blade
Technologies, Kronos, Symmetricom, etc, at its Chennai and Bangalore centers,
that address the entire spectrum of OPD activities for design, development and
testing to maintenance.

Given the tech meltdown, are you seeing any impact on your business?
The US has been our main market and a slowdown in its economy will impact
our sales. Our outlook for FY 2009 is cautious. We expect to generate more
business from our relationships with industry players like Ixia with whom we
have partnered. We will need to develop more such relationships. In this
scenario the one clear change that I see happening is in the nature of the
relationship between OPD companies and their customers. As customers push
companies for more value for money and accountability, OPD service providers
will transition from being a mere vendor to becoming a partner. The onus of
sharing the risks and rewards will fall on both. Our growth engines in OPD would
be next generation data center and embedded engineering. We will encourage our
customers to move to the SaaS model and cloud computing architecture.

Can you elaborate on your product engineering and product based business
solutions? What is the model, USP, and client advantages?
The product engineering market is very different from the traditional IT
services market. In the case of IT services the customer does not see it as a
core part of their business, and hence, is keen to outsource it if the benefits
are clearly visible. However, in the case of the product companies, product
engineering is their core business. Hence the decision to outsource cannot be
taken lightly. Further a product goes to a large number of users and would need
to be upgraded frequently, so the quality, version management, packaging, etc,
become very critical. This requires different skill sets and hence, the reason
for specialized OPD service providers.

Product based solutions are service offerings based on successful products.
In most cases successful products create an ecosystem of their own and thus
provide many opportunities for players to provide value added solutions. For
example, Calsoft provides porting and customization of Adobe Flash for device
manufacturers. Here, through the partnership with Adobe, Calsoft has access to
the Flash source code which enables Calsoft engineers to provide a unique
service offering.

Shrikanth G

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