Category — Information Technology

The focus for captive R&D centers in India has gone up this year and expected to grow between 12-20 per cent in 2012 depending on the source of the estimate.

The country is an emerging destination for automotive R&D;  Renault- Nissan, Suzuki and , Honda have recently set up their engineering centers in India.   In R&D hiring, pharma and defence are the better -paying sectors.  R&D is witnessing large investments not only from foreign companies operating in India but but also from domestic players.  In domestic companies, pharma and automobile have realized that in their ambition to globalize their operations, they have no recourse but to spend on R&D, according to a report in Silicon India.

Meantime, India’s largest information technology (IT) services provider, said it had so far made campus offers to 43,600 engineering freshers for 2012-13, higher than the 37,800 offers made this year. The Business Standard said these numbers represented the offers made to only engineering students at Indian campuses and the final hiring target for 2012-13 would be announced by the end of March. The target will include hiring from foreign campuses and lateral (experienced) offers. The ratio of campus hiring to experienced staff was 70:30 in the  previous quarter.  In FY 2012 TCS will end up hiring around 66,000 employees.

What this means

Career prospects for young professionals look disproportionately bright. If I was an HR professional anywhere in the world, I would want to look at working in India, the experience of hiring more than 10,000 professional people in a year is not something that many companies can offer. In India there are over a dozen company hiring over 10,000 a year. These include TCS, Wipro, Infosys and some other large service providers but also in my estimation western entities such as IBM, Accenture, perhaps Oracle/SAP/HP.

Google has let loose an unspecified number of cars and tricycles to photograph  streets in Bangalore, one of India’s largest cities, according to a report in the Deccan Herald newspaper

They expect the project to face several India-specific challenges: narrow, chaotic roads, traffic, weather, network problems. Bangalore offers a good sample of all of these challenges.  If ‘Street View’ cars can pass the Bangalore test, they will be able to drive elsewhere with ease.  Mumbai and Delhi, which appear to be next on the rollout list, which are the two largest cities in India Vinay Goel, product head of Google India, declined to disclose how many Google cars are driving around in Bangalore.

Street View car and tricycle at Google Bangalore

What this means:

While GPS and accurate maps are becoming more common in India, getting to your destination often involves “asking someone” on the street as you navigate. Street View will obviate the need for such interactions, at least a little.

In an interesting article on Mashable, Mike Laurie lists the ways social networking has changed us. The recent events in Egypt have also reinforced this clear message: social networking is here to stay and will continue to change the way we interact on a personal and professional level.

How does social networking fare in Asia, and in India in particular? A study by Comscore (excluding China) shows that over 50% of the total online population in the Asia-Pacific region (240.3 million) visited a social networking site in Feb 2010. And while you may think of India as leading the pack, it was the Philippines that headed the fray, followed by Australia and Indonesia.

Indians are master networkers and have been so for centuries, but their embrace  of  online techniques has been relatively modest so far. The many local networking sites that have sprung up are already a testimonial to the local appetite.  Some of the popular India-based social networks include bigadda, ibibo, fropper, desimartini and rediff social.

On an international level, Google’s Orkut and Facebook are competing in India.  While for a long while, Orkut seemed to have gained the upper hand, recent Alexa listings show that Facebook is the fourth most visited site in India after Google.co.in, Google.com and Yahoo. Where will it go from here? As more and more mobile phone companies enter the market with the latest offerings, I believe social networking in India will grow stronger, as businesses continue to experiment with how networking sites can expand their offerings on a more localized level.

APW President Systems Ltd. which designs and manufactures standard and customized racks and enclosure systems in India, serving information technology and telecom end-users, was acquired by French giant Schneider Electric. In 2009, Schneider Electric acquired Bangalore-based Meher Capacitors, which makes power factor correction capacitors and another local company, Conzerv Systems, in the energy efficiency market.

With 380 employees and annual sales of about $22 million, APW President Systems has manufacturing facilities at Pune and Bangalore. Laurent Vernerey, Executive Vice-President of Schneider Electric’s IT Business commented: “APW President Systems Ltd brings to us the expertise to customize racks and enclosures for our global data centre customer base. With this acquisition, Schneider Electric becomes a leading Indian player in integrated data center infrastructure solutions and further accelerates its development in the domain of data centers.”

Schneider Electric proposes to acquire shares representing a maximum of 75% of the share capital of the company by acquiring a minimum of 55% of the share capital from the promoter shareholders of APW President Systems Ltd.  and up to 20% of the share capital of the company pursuant to a mandatory open offer to be made to the other shareholders.

More such acquisitions, joint ventures and partnerships are likely to unfold as India builds out its infrastructure. Western companies are also beginning to consider India as a base for regional operations in surrounding countries.

India’s role in global R&D has increased steadily in the last decade. My colleauges and I have directly participated in educating and encouraging North American and European corporation to include India and China as part of their global R&D ecosystem, through the Amritt Global Innovation Practice. Our clients are working with universities, national labs, private product companies, small inventors, and with many of R&D specialists who offer global engineering services using technical labor from Asia. Virtually all of our work is confidential so we are unable to share many examples of our clients success on this blog.

Yahoo! Inc however is not our client; The India Expert can report that its India R&D center’s contribution to intellectual property (IP) filed by Yahoo globally has increased to almost one-third the past two years, from 10-12% previously. While the company setup its Bangalore facility in 2000, Shouvick Mukherjee, vice-president of Yahoo India R&D, says innovation and product development from India have now started adding to the company’s overall revenues. “The major differentiator  is the responsibility of handling end-to-end products that we have compared to any other R&D center in India,” he claimed.

For example, Yahoos run an ad exchange a for which a product called Predict was developed in Bangalore. This product forecasts which online advertisement will get what level of click. This fundamentally improved the return on investment for advertisers, according to Mukherjee.  Another example is an internal platform product codenamed  Helion, which made it possible to launch multiple websites in parallel.

Yahoo has used a captive center model, primarily because most of its users are located outside the USA “There are companies that are outsourcing work and Yahoo is not in those section of companies. More than 50% of our user base is outside the US. And hence, it is very important for Yahoo to be global in its R&D” says Mukherjee.

In the United States, Yahoo has been under revenue and stock market pressure and reduced its workforce by 4% in an across the board cut in December , after prolonged rumors of a 10-20% cut focused largely on Blake Irving’s product development organization.

Only a few global companies have achieved a third of of R&D coming out of India and many companies don’t need to aspire to that goal. But it is valuable for all of us who struggle with running a global engineering organization to note that some have crossed this threshold.And its important to remember that the Yahoo approach of a captive center driven by market need is only one of many ways to succeed in India.