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Induslogic to ride on OPD wave

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CIOL Bureau
New Update

Pragati Simlote

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NEW DELHI: The outsourced product development (OPD) market has changed

dramatically overtime. The percentage of companies willing to outsource R&D

as well as the percentage of work they outsource has also been on the rise.

As per the National Association of Software and Services Companies (NASSCOM)-McKinsey

analysis, the product and technology services opportunity is poised for rapid

growth and could reach $8-11 billion by 2008.

Induslogic, provider of outsourced software development services, is all set

to make further inroads into this burgeoning OPD market. The company has seven

excellence centers and has pioneered the Distributed Agile Methodology that

helps shrink the software product development life cycle and reduce TCO.

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Currently, Induslogic is close to about $30 million in revenue and plans to

grow to $100 million in the next two years. The company employs approximately

1,000 people today, primarily in India, and plans to up its headcount to 2,000

by this year-end.

Ninety percent of the company's business comes from the US and it plans to

maintain its current focus on this market.

Induslogic recently announced its first all-stock acquisition of Nagpur-based

Lambent Technologies Pvt. Ltd, provider of outsourced wireless software product

development services. The company has also raised $12.5 million in its latest

round of funding and is now ready to take the M&A route.

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The company is looking at acquiring companies in the OPD. Induslogic CEO

Peter Harrison said, “We are looking at companies with a special focus. Our

roadmap involves expanding our offerings both in terms of lifecycle and domains.

We provide services right from researching new products, designing products,

developing products, testing products, porting products and supporting them. We

could look at acquisitions to help expand these offerings.”

Induslogic is broadly looking at acquisitions in the telecom and finance

space to reinforce its strength. It is looking at companies based in cities like

Hyderabad, Chennai and Pune. “We do not rule out tier 2 and 3 cities if they

have the right focus, domain and technology know-how. Scalability issue is very

important for us. We are also excited about storage, security, open source, on

demand software, business intelligence, etc. In these areas we can have a good

fit,” said Harrison.

The company is not looking only at acquisitions as its major growth driver.

Harrison said, “We are not looking at acquisition as our major source of

growth. We are looking it as a complement to our organic growth and expect 70

percent of our growth to come organically.”

Throwing light on the recent trends in this market, Harrison said, “The two

big changes include the trend of partnering with companies having the specific

domain knowledge as opposed to building one's own captive. Also the stage at

which companies start outsourcing has also undergone a change. Nowadays

companies don't wait till version 2 or version 3 to outsource. They start

outsourcing right from the first version. For 20 out of our 80 odd customers, we

are building the first version of their products.”

© CyberMedia News

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