Bangalore: A year ago, MindTree Ltd built a technology solution for a local pump maker that mines business data on inventory and sales and builds charts that help in better business decisions.
The company is now taking the solution to US customers. It has already secured two overseas clients, including a consumer goods firm.
Indian software vendors have traditionally built their business model of writing software code and maintaining them based on customer specifications. Most contracts with US and European clients are based on time, material or people they deploy on projects.
But within India, the market is different. “Customers expect an end-to-end solution, not body shopping,” said P.K. Gopalakrishnan, head of Indian markets at MindTree. This, he said, helps firms such as his to understand a business problem and build a solution that can then be replicated with customers in other markets.
Companies such as Tata Consultancy Services Ltd (TCS) and Wipro Ltd have also been building this new business model and have got several overseas customers in the past 18 months. The focus came at the same time when technology spending in the US dropped due to an economic downturn and customers were looking at different ways to cut costs.
TCS, India’s largest information technology (IT) vendor, which earned nearly one-tenth of its revenue from the local market last month, won a £150 million (around Rs1,160 crore) contract from UK’s Cardiff city council to implement a technology solution to improve the workflow between various government departments, similar to what it has built for states such as Andhra Pradesh and Gujarat.
“Building it one time and replicating many times is fundamental fulcrum strategy for our government business,” said Tanmoy Chakrabarty, vice-president for global government business group at TCS.
The firm expects at least 10-15% of its revenue would come from licensing revenue from such business in three years, he said.
Even as Indian companies are making headway in taking local business models overseas, the scale is still small. The India arm of International Business Machines Corp. (IBM) took overseas its model of IT outsourcing with mobile phone service firm Bharti Airtel Ltd, where it built and maintains the entire IT infrastructure.
“That is a rare example. We are yet to see such models by Indian companies,” said Sabyasachi Prasad, partner at Tholons, an offshore advisory firm.
Wipro, which has a strong presence in the local market, recreated its entire business in West Asia based on the India model. It is now working with firms such as Cisco Systems Inc. and EMC Corp. to implement business solutions it provided in India in other markets such as the US.
“Every market (there) is a different game plan. The beauty is that we have a mature market model and emerging market model and we can pick and choose and replicate the best of breed in any country that we want,” said Suresh Vaswani, joint chief executive of Wipro Technologies, the global IT services arm of Wipro. .
But for firms such as Infosys Technologies Ltd, the Indian market is a new area. It is now bringing in expertise gained from working with customers in the West.
“We don’t experiment much in India. We experiment outside and bring it to India,” S.D. Shibulal, chief operating officer at Infosys, said in an interview on 9 October.