OPD vase: IP Bonsai, ISV Bamboo or Software Orchids?

PUNE, INDIA: Does it really matter what nursery the plants come from as long as they smell divine and blossom with colours? Does the name of a gardener matter as long as the lawn is kept well-mowed and sprinklers kept in good shape? Does it make sense to worry over the backyard instead of the porch?

No, the answer is of course not hard to sniff. Unless you are trying to gift your loved ones a custom-made pot or get obsessed with DIY gardening or have a business proposition to be watered well. The point is would it appeal to the gardener to turn into a florist some day? What if they already have?

Think of the OPD (Offshore Product Development) industry as the backyard that was tucked blissfully into oblivion for many years while software bouquets and application vases adorned our lives and rooms well. And then, slowly yet surprisingly we travelled into a world where the apples and berries we eat too started coming with tags of their provenance. Suddenly, ‘what's inside' and ‘where from' became equally visible and marketable as the erstwhile transcendent brand names. But the story could be more than the sticker you see there.

Symphony Teleca is one such OPD player that has shared the spotlight of OPD's arrival and influence from the backyard to India's IT porch. A lot seems to have changed in these years. Having a look at the customer matrix from their SPP division that earlier used to cater mostly to ISVs, shows the changing drift with a customer base that has moved beyond ISVs to other enterprises and software-enabled businesses as well. Interestingly, SPP division's customer mix, which includes Software Enabled Businesses (SWEB) and enterprises, indicates a ratio of 20:80 (non-ISV: ISV) today.

From putting one's skin in the game to toying with trends like tapering-of-brand-distinction in software industry or BYOD tides and fiddling with empty spots like maintenance in the Enterprise musical chair, Reddy Karri, Executive Vice President, Enterprise Applications and Technology Business Unit at Symphony Teleca takes us through the transition of OPD soils. All about the furrows of evolution of the innovation ecosystem in India and how MNC R&D centers are fertilising product development and Symphony Teleca's strategic shifts along the way.

Commoditisation. How much and how serious is this onslaught for software industry?

Yes, it is happening but the challenge is not too much on the commoditization side. There is another wave seen in the last five years on the consumer software side of innovation. Enterprises have stopped buying too much, except for stuff like HANA may be, and the market is high on consumer software side as we can see. As enterprises start buying again and market changes, then commoditization will become an issue to reckon.

So the thing to watch for is - Consumerisation with what we have seen with Windows, Apple OS or Android?

The way consumer is buying and with so much power is indeed different. Open source has not taken big roots in enterprise space. It has taken a different shape in consumer software and tools space. Developers have their own understanding of the problem and there is a different wave around the tools they need. Android side of folks understands consumer behavior well but enterprise space is different. Product managers are either not participating enough or domain experts are wanted. Someone needs to work out the final specifications. Problem definition is not happening and unless that changes, not much will change.

Talking of your customers first, has the shift from sunset to sunrise products actually happened? How much has the industry opened up on complexity of work and beyond T2M (speed) to innovation side of work?

It is a continuous change. Today, we have three to four major customers working on transformation of their product portfolios and on changing their customer segments. Example- we have worked on a hardware vendor changing into a complete solution provider or a shopping network player turning to a bigger, faster market with Internet and Mobility levers. We are partners in innovation and thinking from bottom line to top line impact.

What makes it tempting and then tough for you to eye the segments your customers do?

While a lot is changing on the strategy front, we have decided not to compete with our own customers. Enterprise space has 70 per cent home-grown systems and packaged software makes 30 per cent of the pie. So many could be up for modernization etc, more so with aging workforces and refresh cycles long due. That will help to lean towards custom-based work. For example-we are revamping a company's POS strategy with IT as a competitive advantage.

Can enterprise space's weak heels be the foot in the door for OPD players? Like AMC issues or maintenance parts?

That can be our entry point in the way that it at least opens the door for CIOs to talk. But it should be about value like robustness, ability to understand real needs, domain factors, software DNA etc. Our model is to put the skin in the game with enough risk-taking ability.

Will the ISV market peter out seriously due to SaaS and new licensing models?

ISVs are having trouble with SaaS and Cloud's advent. It is easier in theory to think of subscription-based revenues. But what does not work out is economic conditions and when existing CIOs have invested in machines and are working on amortization of costs already. Value will happen when new deals will happen and that will drive the momentum. That's why OPD customers are looking for new markets and new ideas.

How high is the PQM (Product Quality Management) or managed service or outcome-based model as a delivery option?

Some deals have been happening for a while and we put a lot of stake in the work we do. Outcomes are not so much in terms of timelines but on business value for the customer concerned. It is in force for last three to four years and we have seen it work. We do not talk of cost and resources but the risk and the reward and that can help in making more money. It's kind of a McKinsey and TCS mix that works. We offer strategy as well as execution.

Will it, won't it? Would the OPD sector show a new face soon?

The world is changing and the space will explode the way it is defined and consumed. Defect-based recalls can be heard of in news nowadays. Any device we can think of today has some software embedded into it and as the connectivity of devices grows, it will be just a matter of time for new imaginations to take form and see the industry change in mind-boggling ways.