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August - 2008 - issue > Outsourced Product Development
Sonata-Software-Riding-high-on-the-OPD-wave
Jaya Smitha Menon
Thursday, August 7, 2008
A leading software product company in the telecom domain wanted to accelerate the planned development of their next-gen product on J2EE platform, but was facing a severe scalability challenge due to lack of internal expertise. The company approached Bangalore-based Sonata Software, which specializes in Outsourced Product Development (OPD). Sonata set up an offshore product engineering lab for the client, which over a period of time scaled up in size and complexity to a team of 100 plus experts. The lab engineered 12 out of 14 products in the client’s product suite including 9 releases, 7 new products and 6 major enhancements. Sonata reduced the time required for platform validation testing for each release by 60% by building a repository of 10000 re-usable automated test cases across 32 platforms. It also pioneered the use of agile development practices within distributed teams. The client leveraged Sonata’s implementation experience to offer a scalable and cost-effective offshore-based implementation solution to telcos. Sonata was able to impact and transform the client’s business by setting up a Center of Excellence (CoE) that focused on building product/domain capability and even supported the client’s pre-sales activities. The relationship reached a new high when Sonata was chosen as the client’s global implementation partner.

Be it a start-up or a mature software product company, reduction in product realisation time is mission-critical. They are under constant pressure to upgrade and widen product offerings, augment internal skills and capabilities, accelerate product development and reduce product costs. As the market unleashes opportunities, Sonata is increasingly leveraging its core competencies – customer insight, execution excellence and product company mindset – to offer customers high-quality product development, faster time to market and lower engineering cost - and is well equipped to take on the OPD wave.

Lessons from the past
Initially, the primary focus was to develop software products in niche areas in the domestic market. Prakashak was Sonata’s leading software product targeted at the vernacular press for page composition and enjoyed good customer traction. “Prakashak was a great hit commercially. Subsequently we built Integrated Business Information Systems (IBIS) for the SMB segment,” says B Ramaswamy, President and Managing Director.

Sonata brings substantial value to its customers’ product development by leveraging its own product company mindset and IT services expertise. Having engineered 25 successful products in its formative years, product development is in Sonata’s DNA. Its presence in the IT services segment, with strong application development, implementation, integration and sustenance skills adds to its competency. For instance, the composition of the team in the OPD division is distinct. The team is structured to maximize the synergy between the skill sets of the product development team and the end-customer insights available with the IT services teams, borne out of their enterprise track record. This gives Sonata a competitive edge over pure play OPD companies.

Small Business Technologies (SBT) based in Silicon Valley became Sonata’s first customer. Sonata set up an offshore product-engineering lab that delivered a wide range of services on the client’s accounting software product, including enhancements, globalization, sustenance and replatforming. “They trusted us because we had successfully developed a similar accounting package for the domestic market,” adds Ramaswamy. The client had decided on Microsoft as its future technology platform and what clinched the deal for Sonata was the strong alliance it had with Microsoft.

The alliances with Microsoft, Oracle and IBM also helped Sonata expand its reach to a wider range of customers. Partnerships with these global technology leaders entitle Sonata to dedicated training, premium product support and consulting. The prime beneficiaries of these preferred relationships are undoubtedly Sonata’s customers, which include Amdocs, RedPrairie and Curl, amongst others.

Over the years, Sonata has provided services across the Product Development Life Cycle (PDLC) to several emerging, growing and mature product companies. “Today, we concentrate more on mature ISVs (Independent Software Vendors) whose business model is tested and proven, and which have clear visibility among their customers and a steady flow of revenue,” explains Dinesh Ramachandran, Head, Product Management. Post the dotcom bust, the company had learnt hard lessons when some of its customer start-up companies withered away as they could not withstand the storm. Now it is particular about choosing which start-ups to partner with. According to Ramaswamy, the growth of any OPD company depends on the growth of its end-customers. “If the client revenue is impacted, it affects us directly,” adds he. Mergers or acquisitions of Sonata’s clients can affect the company significantly. Once the client company gets merged or acquired, the future of outsourcing of the new entity depends mainly on the mindset of the acquiring company. However, Sonata seems to have weathered this challenge successfully.

Smart moves to stay ahead
ISVs today not only want enhanced features in new products but they also want them in record time. They therefore look at capitalising on a partnership with a professional OPD company to outperform competition, achieve faster time to market and reduce initial investments in terms of time, money and effort. “While offshoring is a very powerful tool available for software companies today, it needs to be leveraged innovatively to achieve rapid business transformation which alone can provide a sustainable competitive advantage in a tough market. This is exactly what Sonata is equipped to deliver,” says Ramaswamy.

The product engineering services of the company span the entire product lifecycle – right from Product Management to R&D Services, Product Architecting, Development, Quality Assurance, Sustenance Engineering and Professional Services. Sonata’s services enable multiple teams within a software product environment to work in seamless collaboration and deliver high-quality products to their market segments on time, thereby allowing customers to focus on core activities – identifying powerful functionalities that deliver value and differentiation to its customers.. Sonata’s product development model typically involves Agile development approaches like Xtreme Programming and SCRUM, adapted for a global delivery model and conforming to the company’s project management framework. Sonata leverages Web-based portals and dashboards to provide “anytime, anywhere visibility” to its clients for tracking the status of their engagements as well as aid collaboration among global teams.

To sustain in a dynamic market with technology evolving rapidly, Sonata realizes the importance of adding value to client engagements through innovation driven by continuous investments in new technologies. This led to the formation of a Core Research Group (CRG), which continuously maps new trends and technologies in the product engineering space – SaaS, SOA, Web 2.0, Mobility, Open Source and RIA amongst others – and develops re-usable solution accelerator frameworks (SONNETs), architectures, components, tools and methodologies. These assets deliver measurable benefits to Sonata’s customers, in terms of faster time to market, de-risked new technology adoption and enhanced user experience.“This enables us to stay ahead in the curve and provide key insights and value adds to our customers,” says Srinivas B, Head, Product Engineering Services. Sonata’s CRG works on early adoption programs in unison with its technology alliances. “Yet another factor that makes Sonata a partner-of-choice for this segment, is our ability to attract and retain the brightest and experienced product engineering talent over multi-year engagements,” adds Srinivas.

According to a recent report, almost 600 product development companies have set up captives in India and almost 60% incur high costs and high attrition rates, apart from significant challenges in productivity and scalability. Some of the more successful product companies have adopted a hybrid approach to address these challenges. This approach leverages a seamlessly integrated OPD partner ecosystem working in tandem with their own India-based engineering teams that provides specialized services to help them focus on core engineering activities. The right OPD partner should be able to bring in a wide range of services and technology expertise that complements the strengths of the captive unit, while offering a broad spectrum of flexible engagement models.

Ramaswamy and his team are focused on reaping the rewards from the OPD wave. The OPD industry in India is one of the fastest growing sectors in the IT industry. According to a NASSCOM-McKinsey report, OPD market will be $11 billion by 2008. With its flexible and innovative engagement models, Sonata is on its way to be the bellwether of the industry.
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