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SOA adoption is not function of pricing alone

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CIOL Bureau
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NEW DELHI, INDIA: Intelligroup, a global provider of business consulting, technology, and outsourcing services has been consistently included in the in the 'Strong Performers' category and received high client satisfaction scores by leading industry research firms.

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The company has operations in the Americas, Japan, AsiaPacific, and Europe and is present in India in Hyderabad and Bangalore and has plans to setup a new centre in Pune.

Idhries Ahmad of CIOL caught up with Vikram Gulati, President and CEO of Intelligroup to know about company's India operations and go to market strategy.

Gulati, previously, head of Wipro’s global Enterprise Application Solutions Group, also talks in detail about trends around Service Oriented Architecture (SOA) and how companies are taking to SOA globally and specifically in India.

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He also shares how his company has fared last year in terms of revenues and new customer acquisitions.

CIOL: We have been seeing lots of noise surrounding SOA in the recent years. Is it still hype or have we passed the stage and seeing SOA getting adopted mainstream?

Vikram Gulati: Definitely, I would say that SOA has become mainstream and no longer only a hype. People have to understand that SOA is not a concept that suddenly came out of nowhere. Though the term, SOA is new, the concept is not new at all.

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Vikram Gulati, CEO, IntelligroupWe have Object Oriented Technology but different ways of calling it. However, the difference this time has been large companies like Microsoft, SAP and Oracle are adopting this and hence the term SOA is getting more traction. Today we see a change that is more radical and permanent than what it has been in the past

It is at least in a place in global market where people want to start implementing and doing critical projects around them. If you actually trace the history, you will find that even ERP, the building basis of SOA came about from Business Process Reengineering concepts which started in early 90's.However, these processes were not able to address all the integration problems.  This got to the idea of Web Services and ultimately the idea of Service Oriented Architecture.

The underlying theme of SOA is the effort to bring open standards to the corporate world and that thought is increasingly getting more traction across the industry. 

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CIOL: What are the major trends that you have been witnessing in SOA adoption across continents?

Vikram Gulati: SOA is picking mainly in US followed by UK. The adoption is comparably much lesser in India but is definitely picking up.

Howver, I do not see any differentiation of adoption region wise. The difference is more from vertical perspective rather than a region perspective.

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Like for instance, BFSI vertical is facing huge problems from the data perspective both in India or US or even Europe. For instance, customer has multiple relationships with a bank, be it a saving account, a credit card or a loan account. The banks, however both in US and as well as India, knows this customer not as a single entity but a customer with five different accounts.  

The banks are finding it difficult to standardize business processes, and getting applications to talk to each other. This has been the major pain point and they have not been able to address all the integration problems.  Enterprises across are board are now looking at SOA as a standard way of connecting between systems and hence we are witnessing the need for SOA among these verticals.

CIOL: How are Indian enterprises waking to SOA? Do you see pricing as a deterrent for the lack of traction for SOA in the country?

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VG: Indian enterprises are waking up slowly. However I don't think pricing is an issue. Indian customers are willing to pay for ERP solutions. SOA is rolling out and we have got lots of licenses in the country. The growth rate that we have achieved clearly highlights that.

 

CIOL: But when compared to SOA adoption to western countries, the progress has been relatively slow?

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VG: I don't see it as a function of pricing alone. It is function of people finding out business processes that take to the Enterprise SOA model. For example we are finding adoption of SOA higher in the high end of the spectrumIndian top 100 or 200 companies. Enterprise SOA is not adopted when it comes to the lowest end of the market

CIOL: And what could be the reason?

VG: See, large companies have more distributed operations and they need distributed IT operations, so for them ESOA helps. Being large global companies and no longer Indian companies, the needs of flexibility are much higher and the need for ESAO is more than that of smaller companies.

CIOL: Coming to the competition, Wipro, TCS and Infosys also offer SOA to enterprises across the vertical. What is Intelligroup got to market strategy and how does it manage to put its solutions to its target audience?

VG: The landscape we are operating in calls for a clear segmentation and differentiation. While Wipro, Infosys and TCS target the above two billion dollar categories, Intelligroup is clear in its strategy that where it wants to operate.

If you look at the sub 500 million dollar categories, research firms point out that this segment of market cannot be everything for everyone. The key thing around this market is clear differentiation and segmentation that is something that Intelligroup clearly targets at

We have set target for us in the One to Five billion dollar market. It is the market that is under served by the big guys, a market that is highly ERP oriented. Intelligroup itself is a 170 million dollar company a mid size company, clearly differentiated, clearly articulated as an ERP company dedicated and focussed on one space only. 

We are sixty to seventy percent SAPOracle Company and you find high degree relevance to what our customer needs in this space and what we offer to customers. That is what is helping us in the market space whether it is in web services or SOA.

Again all our growth and all new things are cantered on ERP or ERP surround space. So from market point of view this is the most articulated points in the market. Customers want to do business with us because they see clear differentiation and also we live with our customers through out our entire life cycle. 

CIOL: How has been the growth of SOA for Intelligroup in India? Has it been in any way affected by downturn?

VG: Indian is an important market for us. We are growing at twenty to thirty percent year on year and we are seeing lot of demand for our services. That is why we are opening offices in Pune.

I don't think slow down has had an affect on our business here. We see the same level of demand for our services as before.

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CIOL: But globally recession has squeezed budgets for many CIOs who wished to invest in new technologies. Do you see slow down getting reflected in your results?

VG: See, the two sectors that have really slowed on are the banking and financial services and retail services. We do not have a presence in these sectors.

To that extent, we have not seen any direct effect. Clearly recession is on us and now the question is how to cope with it. We have not seen huge drop in our demand for our services. The sectors which are doing really well for us are in the manufacturing sector and pharmaceutical sectors in US.

We have been heavily focussing on these sectors and for time being we are not seeing any direct impact. 

CIOL: Coming to Intelligroup, India operations. What are your plans of ramping up your delivery centres and increasing the head count?

VG: 75 percent of our work force is in India and large part of it is directed to overseas customers in US, Middle East and Japan.

For India, we have offices in Hyderabad and now we are going to open one in Pune soon. We have 1800 people working in India and 2500 globally. Pune centre is not meant to service the global accounts. It will not be a large centre, but will only service western region of our country.

CIOL: To conclude, it would be great if you could quantify the savings that Intelligroup has been able to accrue to the customer following his engagement with Intelligroup?

VG: If a company is spending a half a million dollars on a project, he will get that saving typically in six to twelve months.

Today, you will not get new funding for new project if you are not able to deliver six to twelve month ROI after the completion of implementation i.e. when the system is up.