Convergence drives technology trends

BANGALORE, INDIA: Rajiv C. Mody, chairman and CEO of Sasken Technologies, speaks about his company and the technology trends that are taking world by storm in a discussion with Pradeep Chakraborty of CIOL. Excerpts:

CIOL: Sasken was earlier known as SAS and its focusing was on the product development. It later moved on to services. Why and how did this shift happen?

Rajiv C. Mody: Sasken has always been, from day one, doing products and services together. We started out in the EDA space and we had one product in the simulation space. We were writing a simulator, which was addressing large complex designs and methods to simplify the designs. Simultaneously, we were also doing a lot of services for large telecom companies in the areas of designing. We continued that and expanded in the area of telecom.

Subsequently, we started building our own products in the telecom space. However, one significant difference I would like to highlight is that anything that we do, it impacts our customers' top line because we address the R&D side of the business.

CIOL: Not so long back, you were also a VLSI player. When did the shift happen toward becoming a communications company?

RCM: We started out as a design tool and telecom company in 2000. We decided to disband our design tool part of the business and focus completely on communications. Now, we do a lot of our business in the area of chip design, which is part of very large-scale integration. Today, we are the leading providers of semiconductor design, doing all kinds of complex system-on-chip (SoC) as well as 65-nanometer design.

CIOL: How many patents does Sasken currently hold?

RCM: Sasken has filed for 39 patents so far, of which 16 have been granted. Those remaining are in the process, and typically, once we apply for a patent, it takes four years before it is granted.

CIOL: Can you tell us about your current R&D activities?

RCM: We have invested close to Rs 40 crore in R&D in 2007. If you look at our first two quarters of this financial year, we have invested about Rs 15 corers in R&D. Sasken focuses on next-generation technologies, which would shape up the way things are to come in this new, converged world.

CIOL: What are the technology trends that you see are driving the telecom and semiconductor spaces?

RCM: The fundamental thing that is driving this entire change is what is called convergence - essentially entertainment, media, news, information - all being available at push medium as well as pull medium. Wireless is also playing a very significant role.

All of these combinations are creating newer opportunities - starting with, say, for example, in the service provider-side, new billing methods have to be put in place because it's going to be triple-play and quad-play kind of situations.

Simultaneously, on the handset side, with more and more computing power available, there are newer kinds of applications that have started playing significant role. So, we are scanning the entire gamut to position ourselves and take advantage of it.

CIOL: Are there any products about to come out from Sasken?

RCM: We continue to invest in our products on the mobile handset space. As you know, we have a significant play on the multimedia and the application framework. We are extending those and newer technologies, and newer methods, which we are trying to bring into interesting applications. We continue to invest in those.

To give you an idea, for the mobile handset, direct broadcast is going to play a significant role. People are already talking about high definition (HD) on mobile. So you will see all those kinds of interesting things coming about, and we will participate.

CIOL: You acquired a Finnish firm. How is this particular acquisition doing and what is the payback period for this acquisition?

RCM: This acquisition has worked extremely well for us and its full integration has been done. We have significant engagements because of our presence in Finland and the capabilities that they bring, not only with the existing, but also with the new costumer base. We are thriving and this has also given us the capability as a company to do full end-to-end handset design and testing.

CIOL: Has the strong run of rupee affected Sasken?

RCM: I think there has been an impact on the overall profitability, because the rupee has appreciated close to 12-13 percent. We also have significant billing in euros. As we look at our numbers, about 35 percent of our revenues come from Europe. For the first two quarters, because of the hedges, we have been protected.

However, the overall thing is such that one has to now focus on increasing productivity to be able to combat the appreciating rupee, which I believe, as India becomes more and more of a developed country, is a reality of life. So, we need to increase our productivity as well as come up with newer business models to take advantage of it.

CIOL: What are the opportunities that you are looking in the telecom space?

RCM: Sasken's focus was always been on the R&D side. We are focused on everything that touches the R&D side. A couple of new things that I can talk of is in helping costumers with technical support for any of their product lines, because those product lines are in the market and they need a lot of support. We provide that support.

Another interesting area is next-generation product design and the definition, and how do we participate in that. You have also heard of the things called femtocells. We are starting to have some role to play in that.

We will continue to march, like I told you, ahead in the multimedia side of application framework side, on the protocol side, on the testing integration, certification for the mobiles, etc. We continue to expand in the service provider space also using these capabilities.

CIOL: Do you have a large global audience, now compared to what it was a couple of years ago? What are the markets that you are looking at currently?

RCM: Absolutely! If you look at communications market, it is growing so rapidly over the last few years. We used to have close to 700 million handsets probably sold two years ago. Today, it has crossed over a billion handsets. We don't see that changing.

We didn't see the kind of applications and usefulness for the handsets, the way it has now turned out to be: a complete multimedia system. All kinds of interesting things are being put in there. You will now see more and more things like maps, etc., being put in there.

 It is going to be a device, which can track you and help you regarding safety; if you're in distress you can do all kinds of things with it. Now talk about the impact that device is going to have on the commerce side because now it has become a medium by which you can make payments. I am sure as we go along, we'll start seeing these things to take on and we will start playing in those kinds of markets as well.

CIOL: What would you like to say to those startup firms or people who are trying to start their own product companies?

RCM: I'd say be patient and live your dream. Be persistent. Don't get perturbed by failures and believe in it.