MindTree R&D eyes growth through ODCs

By siliconindia   |   Thursday, 22 November 2007, 08:00 Hrs
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Bangalore: Bangalore-based MindTree Consulting, an IT services company, is eyeing offshore development centre (ODC) model to drive business in the R&D services division, reported business Standard. The company's R&D services division, which generated revenues of $10.25 million during the second quarter of the current fiscal, operates 16 ODCs for various customers. In the last two quarters, the company set up three new ODCs. While ODCs contribute about 60 percent of the R&D services division's revenue. "Our target is to take the revenue share from the ODCs to 75 percent from the existing 60 percent. The ODCs will give us predictability of business apart from adding stability to the revenue growth. We prefer ODCs to individual projects though the latter gives an opportunity to work on cutting edge technology. We intend to set up at least 3-4 ODCs every year," said S Janakiraman, President and CEO (R&D Services), MindTree Consulting. The company's largest ODC has 180 people working on various projects for a particular customer. "Talks are on with various customers to set up ODCs. They are in the pipeline," he added. MindTree's R&D services, which employs 1500 people in Bangalore and Chennai, has expertise in communication infrastructure, storage, consumer appliances, automotive, industrial systems and medical systems. It provides services in the complete product realization as well as at the sub-system level development for both semiconductor and system companies. The R&D services division derives 70 percent of its revenue from the U.S., 20 percent from Europe and the rest from the Asia Pacific region. According to Janakiraman, though U.S. will remain the largest market for the company, Asia Pacific region is witnessing growth momentum.