Product Development in India

Opportunities and Challenges

While it is evident that software products is where the high revenues are, and  the belief that the Indian Software industry needs to go higher up in the value segment, a question that has been often brought up, but never really answered is.....

Is the Indian Software Industry ready for product development or would they continue to be in the services area?

This presentation by Srini Koppolu, Corporate Vice President and MD, MicroSoft India Development Center (MSIDC), addressed this topic using the case of MSIDC itself.

Srini started with the plan of creating a Development Center in India that would deliver the entire life cycle of product development activity. To this plan emerged the vision of MSIDC - "Innovate from India to drive global business growth and empower the next billion customers in the emerging markets."

MSIDC in India currently has the following teams:-

• Sales, Marketing, and Services
• Microsoft Research
• Global Tech Support Center
• Microsoft Internal IT
• Microsoft Global Services India

MISDC focuses on:-

• Core R&D from India
• Development
• Testing
• Program Management - functions to bridge marketing information and technology to enable delivery of market requirements

MSIDC had a slow but steady growth, starting from a small 20 member team at start up to 40 the following year, 80 the next, and 120 by the end of the 4th year. By this time, they obtained stability and thereafter scaled up exponentially to 1300+ in its ninth year of operations in India. In the early stages he got others in Microsoft US to also move into India with him, besides recruiting new talent from India. This strategy helped build the culture and provide a platform for good interaction with Head Quarters and the team back in the US, to ensure good support for all things required in the new venture here in India.

Some key observations that he shared were:-

a. Decision not to transfer big chunks of work to India. Transferring work would have been an easier task, but would not have given the opportunity to innovate and build a full cycle product development practice in India.

b. Being hard to get into new areas, build from small to big team size. This helps build a "real" R&D center in the long term.

c. Have the business investment driven, and build business leaders that focus on contributing margin to the company.

Similarly, it is a good idea to keep two questions in focus:-

1. Are we running a full business?

2. Have we incubated a new venture?

In MSIDC case - DPM (Data Protection Manager) and RFID were the two answers to the questions respectively.

He also emphasized on flexibility, and cited the experience of shifting focus from the original idea of creating RFID appliances which would have been easy for the customer but difficult to sell as new sales channels would be required, to using BizTalk which was already selling RFID in the supply chain segment. The belief behind this was BizTalk RFID + Partners = Mass Adoption.

Choosing RFID as the innovation area, he explained, was based on information that consumers were eagerly awaiting such a product, which gave the security feeling, especially required when stepping into a new area of activity calling for large investments. It was more of a case of choosing a safe situation, to ensure that Head Quarters support would be sustained.

Some present products of MSIDC, focusing in the mobile space (he was very clear about the growing market strength and adoption of applications in the Mobile space) are:-

• Office Mobile
• SQL Connect
• Visual Studio for devices
• Office Communicator Mobile
• Live Search

He re-iterated that the Mobile space is growing fast, and is a good segment / platform to position in.

Srini went on to explain the full cycle of product development that entrepreneurs must keep in mind.

• Conceptualization
• Product Planning
• Requirement Analysis
• Building
• Program Management
• Development and Testing
• User Experience
• Marketing and Distribution

Some key points favouring the story of moving to product development were brought out.

• Time of rapid change and innovation
• Barriers to entry for software has never been lower
• Cost
• Distribution
• Business model innovation (Ad funded, subscription model, etc.)
• Access to capital
• Pace of growth in adoption of high end mobile phones by consumers

Srini encouraged partnering with VCs for shared learning, and suggested seeking partners in domains of interest. Some domains that are of interest to many VCs, he said, were:- 

• Mobile platform and applications
• Business productivity software and solutions
• Service, Infrastructure, and Platform software

After giving a brief insight into some acquisitions made by MSIDC in the last 5 years, which also followed a slow and steady growth in numbers, he summed up the product development growth strategy that Indian companies should look at.

1.       There is a huge potential in India and emerging markets.

2.       Good talent in product delivery.

3.       Need to grow Product Planning, Product Marketing, and User Experience.

He also added that MS is interested in partnering with start-ups and VCs now, to further grow and get ahead on their vision.

This event was organised by the TiE, Bangalore Chapter 

Sanjay Dugar is a Corporate Trainer and a Management Consultant, with a focus on Business Analysis, Business Development, Strategic HR, and Project Management areas.

Issue BG82 Jan 08