Over the last two decades, these multinationals have mostly looked at India as a low-cost destination to outsource back-office software development projects. But with this initiative undertaken by iSpirt, a product start-ups thinktank, the 50-odd global CIOs will meet the founders of these start-ups, and may even end up investing in some of these companies or solicit use of their solutions to solve business problems.
“Most of these companies were selected purely from an innovation standpoint—their (CIOs’) expectation is that if there’s something interesting either at the infrastructure level or at the business application level, that would get them interested," said Sharad Sharma, co-founder of iSpirt. Sharma is the former head of Yahoo India’s research and development (R&D) centre.
The start-up list includes several other new-age and lesser-known product firms such as e-commerce start-up Instaclique, cloud storage firm CloudByte and analytics start-up Qubole.
A number of top global companies are increasingly discovering that the more innovative solutions and ideas are often being generated outside their own boundaries and hence are looking at promising ecosystems such as Bangalore for software products, experts said.
US-based brick-and-mortar retailer Target Corp., for instance, set up an accelerator programme in India last month pledging to incubate ideas in the mobile, social media and big data analytics space.
“Retailers are changing a lot. As we think of our evolution into a multi-channel retailer that serves our guests across brick and mortar, mobile and online, we need to recognize that we will need to innovate significantly," Navneet Kapoor, head of Target’s India operations, said in an interview last month. “And we recognize that innovation can come from both large and small companies, hence the desire to partner with the start-up ecosystem in India."
There is a reason why lifespans of companies on the S&P500 are shrinking continuously, according to Piyush Singh, CIO of Great American Insurance Co., a Fortune 500 firm. “When you become too big, innovation becomes hard. You often find then that innovation comes more from the outside," he said.
Experts tracking the start-up ecosystem feel the latest move to bring CIOs of large multinationals to India would also be a game-changer for Indian software product companies as they can meet and pitch their ideas to dozens of companies in a single trip instead of having to travel to foreign countries.
“What is happening is that at the board-level of several of these top companies, discussions are taking place and they are saying, ‘let’s not get disrupted in the same way as what an Amazon did to Wal-Mart, and what Uber is doing to others in the cab market’," said Mukund Mohan, director at Microsoft Ventures. “They want to stay in front of the innovation curve...and to do that, they’re looking at Bangalore and the ecosystem here."
“I won’t be surprised if within a year the Infosys(es) and the Wipro(s) of the world start talking to these product start-ups and find a way to work with them," added Mohan, who is on the advisory board of InTech50 and will head the Microsoft accelerator programme in the Americas and Asia-Pacific from July.
The initiative also comes at an important point for product companies based out of India, which often face the problem of not being discovered by global firms such as Google Inc., Facebook Inc. and Microsoft Corp.
A recent study conducted by iSpirt and investment bank Signal Hill Capital highlighted that India has the worst track of mergers and acquisitions of early-stage product firms as they find it tough to gain visibility in key markets like the US.
Mint has a strategic media partnership with iSpirt for the InTech50 event