Bangalore: Outsourced product development (OPD) firms such as Symphony Services Corp. and GlobalLogic Inc. that build products for software firms and write code for chip firms have set up centres in China to service global clients in the region even as they eye business from north Asian markets.
Driven by demand from their customers, Symphony and GlobalLogic have expanded their development base to China in recent weeks. Other vendors such as Aztecsoft Ltd and the Chennai-based Aspire Systems (India) Pvt. Ltd are evaluating plans for a China centre but have not made a final decision.
The market for OPD services rendered from India is expected to touch $11 billion (Rs43,450 crore) by 2008, according to a study consultant McKinsey & Co. did for software lobby group National Association of Software and Service Companies or Nasscom in 2005.
“We have less than 10 people right now, all of Chinese origin,” said Rajul Garg, vice president for business development at GlobalLogic.
The company opened a delivery centre in Beijing in December that will focus on developing applications for the telecom, mobile business and consumer Internet and embedded technology markets.
Symphony, which set up its operations in Beijing in December, has launched the “Back to China” initiative hoping to attract mid-level Chinese IT professionals in the US back to their home country, said Ajay Kela, chief operating officer and managing director of the company.
Symphony Services, which builds products for about 100 clients including companies such as Oracle Corp. and Autodesk Inc., plans to design, develop and localize products at the Beijing centre, Kela added.
The company expects to focus on embedded systems or semiconductor-level software work in China and has signed up four clients there, whose names Kela did not reveal.
“A lot of our US clients are eager to sell their products in markets such as China, Japan, Taiwan and Korea. We can help them introduce their product in these markets by providing back-end services such as customer support, professional services and customisation through our Beijing centre,” Kela said.
Like Symphony, Global Logic would also be looking at servicing the Japanese, Taiwan and Korean market from China, Garg said. “China has a vast pool of talented engineers and is getting increasingly ready for the OPD market,” he said.
Sudin Apte, senior analyst and country head of Forrester Research in India said the China expansion was driven by OPD firms’ strategy to diversify into embedded systems work from serving so-called independent software vendor space.