With IT services biggies gradually moving into the product engineering space; competition is getting heated up for the niche OPD players. Peter Harrison delves on the new areas that excite him, and the kind of companies that hes out to acquire in India

How is the company planning to balance its organic as well as inorganic growth strategy?
We expect organic growth to continue to account for a major portion of our growth. We have grown more than 50% y-o-y in the organic field, in the last seven years, and expect to continue this level of growth for the next three years.

In India, I would expect a handful of acquisitions over the next eighteen months. Were targeting OPD and product engineering focused companies, typically in the range of 300-600 manpower strength. We particularly have a preference for expanding our footprint in the south, especially Chennai and Hyderabad.

How do you view the manpower availability situation in India?
We see a gradual calming of the markets in India over the next few years with lesser inflation and lesser turnover. More people are realizing that the one real durable asset they have is their skill and that investing in these is the one true sustainable asset.

How are the dynamics impacting the OPD space evolved over the last few years?
Three years ago it was enough to simply say you were OPD. You could win business by simply saying you were focused. Today, thats not enough. One needs to back these claims with processes, platforms, and components specific to product engineering. In addition, clients are asking for more and more domain expertise. They dont just want firms that can help them implement their vision, but rather can help them enhance it.

What emerging trends do you foresee in this segment?
We see a new generation of software technology startups that are getting established, typically by people with great business ideas and are eager to turn over from day one, end-to-end responsibility for the engineering of their product.

Which are the exciting new areas to look out for?
We see a lot of growth in the mobile, telecom, and consumer space in particular with the increasing convergence of new technologies. We also see a lot of crossing over of technologies that started in consumer domain now finding their way into the enterprise domain. We are doing a lot of exciting work in mobile and Web, and an increasing amount of mobile Web. Social content is not a fad. Its a fundamental shift. Frankly its what killed AOL.

You had said, We compete for talent with Google and Microsoft, not Infosys and Wipro. Can you elaborate on that?
We do R&D, not IT. We compete with Microsoft and Google for the worlds very best software engineers. These engineers, in turn work with us to build the next generation of the Microsofts and the Googles. Infosys and Wipro typically hire less experienced and/or less talented engineers and focus primarily on IT.

With your new initiative, version 1.0, youre targeting startups that outsource their entire product development operation. Do you think this will help you move up the value chain?
Three years ago a technology startup would not consider off-shoring some of its product until it at least had a 2% share in the market. Today we are seeing more and more companies that want to start this way on day one. If we arent there to help them do this then our competition will, and later we will be on the outside looking in.

Shipra Malhotra
shipram@cybermedia.co.in

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