Source: www.business-standard.com

Wipro Technologies, the global IT services business of Wipro, has struck an R&D services outsourcing deal with audio and infotainment product manufacturer Harman International Industries, which by nature and scope can be much different from conventional time and material IT outrsourcing contracts, and can bring large volume of business for the company going forward.

As a part of the contract, Wipro will set up a dedicated engineering centre which will work on existing and future projects of Harman in the infotainment space.

The engineering centre, to start with a team of 250 people, will work as an extended engineering services arm of Harman, and where the revenue model will a mix of everything starting from fixed priced revenue to project based revenue. Besides, Wipro can also customised its intellectual properties (IPs) to create products and solutions for Harman, which will have a different revenue model altogether.

“It’s certainly not a conventional outsourcing deal, and a time and material contract. This deal is a manifestation of our positioning of the product engineering services as a business line for us. We are going to be an extended engineering services organisation for Harman which will leverage the R&D engineering services expertise to reduce time to market for new products and come out with innovative solutions committed to its automotive customers globally,” said Suresh Vaswani, Joint CEO, Wipro Technologies.

The resources to be deployed in this project will be mostly from Wipro’s engineering services division, while the company will also have resources from outside since Harman plans to grow the resource footprint in India to more than 1000 person by 2011.

Harman aims to use the capability of the engineering centre for developing audio and infotainment solutions across automotive, consumer, and professional markets.

The services to be delivered out of the centre include both software development and related hardware engineering for the Harman portfolio. Harman will retain the ownership of all intellectual property developed in the centre.

The New York Stock Exchange listed Harman International Industries, employs more than 12,000 people worldwide.

Besides, the company has a team of 1,100 in China. Dinesh C Paliwal, Harman’s chairman and CEO said, “The new venture in India is an important milestone for enriching our portfolio of engineering solutions. We have $14 billion worth of business backlog till the end of last fiscal. Many of the projects we are working on in the joint engineering centre, will cater to the backlogs, and the scope of the centre will keep on growing with the demand from our customers.”

Wipro has over 18,000 people who are working in the R&D services space.

Source: economictimes.indiatimes.com

BANGALORE: Japan may be the next port of call for the Indian IT services industry, which is currently facing lot of uncertainties from its prime bread-winning market, the US. The attempt now is to widen the scope of operations to destinations like Europe and Japan.

Apex IT industry body Nasscom is currently working on a study to evaluate the outsourcing opportunities from Japan, the world’s second largest economy. Given its stronghold in the automobiles and consumer electronics space, Japan’s IT spending on engineering design and services is high.

Says Nasscom vice-president Ameet Nivsarka: “Revenue from Japan hardly contributes to 3% of our total software services exports. We believe Europe and Japan offer huge potential for Indian vendors.”

Some Indian players are ready to carve a fair size of the Japanese outsourcing market. Infosys, for instance, entered into a pact with Nihon Unisys to combine its global delivery model with the latter’s strength in the Japanese market. Similarly, Wipro Technologies, the global IT services business of Wipro gets around 3% of its revenue from Japan. It also has key alliances with some of the leading Japanese corporates including NEC.

Infotech Enterprises has announced its entry into Japan with offerings in engineering design services. Infotech has also hired local talent, Kazuya Fujinaga (formerly with IBM Japan) and Masamichi Migita (earlier with Dassault Systems Japan), to spearhead its foray. Patni Computer and KPIT Cummins also have substantial presence in the Japanese market.

An IT analyst says, local talent and understanding of IT buying behaviour of corporations in Japan are critical to make a foray into this market. Unlike the US market, which has been more open to IT outsourcing, in Japan it takes a considerable period of time to build the relationship and get a contract.

According to a Japan market study by neoIT, an offshore advisory firm, the total IT services sector is estimated to be around $50 billion. Less than 2% of this market is offshored, with China getting the majority share. China, with its large talent pool and a cultural and language compatibility are better able to serve the Japanese market.

However, currently Japan’s outsourcing requirement is for embedded software and solutions and a lot of low-end work (testing and coding). When it opens up for more complex solutions Indian services majors will see a traction coming from this region, says neoIT senior director S Sabyasachi.

Some of the major Japanese companies already offshoring include NEC, Nissan, Sony, Toshiba, Hitachi, TIS, NTT, Japan Telecom, Toyota, Panasonic, MKISS Co. Ltd, NCS, Fujitsu, Kawasaki among others.