Outsourcing firms climb the value-chain ladder

So far, product biggies like Microsoft, Cisco and Adobe have been developing products in India but only in their own captive centres. There is evidence now of a few small and specialised Indian companies also getting involved in the outsourced product development business. The growth path is scorching: 100 per cent a year, albeit on a low base.

In Noida (near Delhi), Induslogic is developing software products for around 40 US-based software firms. The company has grown from just 25 engineers in 2002 to around 260 now. It will be doubling its strength in the next 8-10 months by adding 30 engineers every month.

“It’s a win-win deal. Product firms reduce their costs by outsourcing. In addition, we offer them specialised skills that they may not be able to maintain on their own. Moreover, they may not enjoy cost efficiencies by setting up their own small captive centre in India while we have the benefit of a large product development centre as we cater to multiple customers,” IndusLogic CEO Peter Harrison said.