Center of Gravity of Product Development Shifting to EDS Model

Date:   Saturday , April 01, 2006

During my recent trip to India, Wednesday March 1, 2006 was memorable for me. I woke up to read the finer details of a fine National Budget from the crafty Finance Minister P Chidambaram who put India’s GDP into a steady state of 8 percent growth. On its front page “The Hindu” had published a classic picture from celebrated French photographer Henri Cartier-Bresson. The timeless photograph was of the cone of a rocket being wheeled to the launch site on the back of a bicycle at Thumba in Kerala, taken in 1966.

This powerful visual symbol captured everything about India and its slow long journey into big leap of Science and Technology outsourcing segment.

Successful entrepreneurs will emphatically state that the most important ingredients to any successful enterprise are clear vision and freewheeling creativity. Twenty-five years ago, the creators of Electronic Manufacturing Services (EMS) companies dared to dream, forging a vision of separating manufacturing from product OEMs into a service offering. With creative methods of fine-tuning costs via materials aggregation and labor location, the result was the birth of a multi-billion industry where publicly traded companies like Solectron, Sanmina-SCI and Jabil are operating from many locations around the globe.

Ten years back, innovating on the EMS success strategy, visionaries of outsourced product engineering, proposed to the technology industry that while core research would continue to necessarily be done internally, there were several areas of product development that could be safely and securely outsourced to an Electronic Design Services (EDS) company. Ever since, the electronic product OEMs and semiconductor companies have been increasingly relying on EDS companies to bring products into the marketplace with tremendous cost savings and time efficiency.

Now, ten years later, big players across the “Flat World” are flocking to get a piece of the EDS pie as they now sense the potential in this billion dollar opportunity. While some of them had strayed into this space from their Information Technology (IT) focus, others have been here looking for a foothold in the fast-growing EDS market. This however has created a new business opportunities for EDS companies in India. From my experience, I can see the following areas of technology and product development outsourcing to India with great success: Board Design, PCB Design, FPGA Design ASIC Design and Embedded Software.

Breadth of services in the above mentioned areas will help EDS companies to mitigate the risks associated with the technology industry cycle of booms and busts. In this cutthroat game of survival, one should always keep evolving-in terms of technology, market demands, and the vision for the future. Finally, EDS companies are no longer “Design Houses”; now they are mainstream industry stakeholders whose contributions and performance will determine the future of 50 year-old electronic product businesses in a big way!

Gopakumar K. Periyadan “Gopa” is the VP & GM, System and Software Business Unit and Co-Founder of GDA Technologies Inc. based in San Jose, CA.