The recession that succeeded the great ‘Dot Com Bust’ of 2000 may have led the emergence of Outsourced Product Development (OPD) but the present economic downturn has unfolded a new story for the OPD segment in India. With most independent software vendors (ISVs) taking a hard look at their expenses and rethinking the idea of outsourcing their work to third parties, OPD players have been the worst hit in the IT industry.
“Q1 and Q2 had been a lean period for most OPD players with no new business coming in and the existing players moving into a period of hibernation, waiting for the tough times to tide over,” says Amitav Roy, COO, Symphony Services. Though most service providers have taken stringent efforts to cut costs like laying off resources, most have realized the need to take more serious steps to revive the dwindling revenues.
Finding a New Way
It is often said that recession is nothing but a time to look at finding new opportunities. With the business being meager over the past few months, the service providers in India are now taking a stern look at their business and innovating new methodologies in an effort to revive it.
With the growing technical expertise in India, the service providers are now pitching for end-to-end development work from their partners. Companies are handling more core research and development (R&D) projects, unlike a few years back where they were handling more of ‘D’ without any ‘R’. “Having developed enough domain expertise over the years and with highly skilled resources, we are at a position where we can offer complete product lifecycle development for our partners, allowing them to focus only on marketing and sales. This is an idea we have offered a lot of our customers and many are already working on it,” explains Munish Gupta - Vice President, India Operations, GlobalLogic.
For many service providers, startups have proved to be risky customers since many were forced to wrap up their businesses in the wake of recession. Despite this, Compassites Software Solutions believes in continuing to work with startups and young organizations. The Bangalore based firm is primarily engaged with entrepreneurs and enterprises in innovation and intellectual property development. While most players in the OPD realm focus on developing products for other product companies, Compassites targets ideas and believes in walking the entire stretch, translating the idea into a business reality. In a recent engagement with iCharts, a German startup that helps build interactive online charts, Compassites saw tremendous potential in the idea. It not only engaged with iCharts in terms of partnering for technology but also brought the company to the U.S. market where TechCrunch recognized it as one of the 50 best startups last year. “The OPD space is undergoing a massive change. With the service providers today guiding the way right from conceptualization to the end product, ideation is emerging to be the new business model in this space,” says Naveen Lakkur, CEO, Compassites.