They are the rising stars of the Indian software services and product engineering space, twinkling alongside big brothers Infosys, Wipro, Satyama, TCS and Cognizant. It’s the small brigade of Indian companies that adds extra wheels to the Indian IT juggernaut.
Meet Subex Azura, Persistent Systems, Mindtree, Evalueserve, Nucleus Software, Sasken and their relatively smaller cousins, including Pangea3 and IBS Software operating in niche spaces.
A quick poll at the Nasscom 2007 Leadership Summit and the same names keep surfacing time and again. The leaders are betting on these challengers, whose story is not necessarily about size. But these next-generation emerging companies have carving out a niche and are vying for the honours therein.
Bangalore-based Subex Azure seems to be bettering its own record. The company paid $140 million to acquire UK-based Azure Solutions mid last year, and more recently it acquired Toronto-based Syndesis for $164.5 million in an all-cash deal.
“I don’t know whether it will be the next wave but I know for sure that there is an Indian products wave somewhere down the line. Product development is a $300-billion business in outsourcing and we want to grab the opportunity,” says Subex Azura Founder Chairman, MD and CEO Subash Menon, whose company specialises in operational support systems for telecom companies.
Outsourced product development major Persistant Systems has nearly 1,500 product releases under its belt since the time it was incorporated in early ’90s. The company, which closed this year with $70 million in revenues, is expected to grow to $200 million in the next three years and eventually hit the market in the next couple of years.
“We followed the lesser-risk-low-return formula to grow slow but grow strong. Since we don’t own our products, we don’t have to bother with the marketing pitch. We do what we are best at for our international clients,” says Persistent Systems Managing Director and CEO Anand Deshpande.
In the IT-enabled services space, Pangea3, which is relatively smaller than other knowledge process outsourcing majors like Evalueserve, is scaling up to the top slot in what is called legal process outsourcing space. Though less HR-intensive, companies like Evalueserve and Pangea are taking the Indian ITeS up the value chain. “The legal services in the US and Europe are $300-billion opportunity and short of anything requiring physical presence in the court or signing, every bit of this business can be outsourced,” says Pangea3 Co-CEO Sanjay Kamlani.
Given that — by Nasscom’s definition of emerging companies, there are 1,000 companies with revenues less than $10 million and about 3,000-odd companies with revenues less than $100 million in India — the future may spring some additional surprises.
“With business borders melting, opportunities are emerging in very unconventional areas and emerging companies in India are gradually recognising these and building business abound them. There will be a fair number of surprises as far as the next generation IT leaders are concerned,” says Satyam Founder and Chairman and Nasscom Chairman B Ramalinga Raju.