This question baffles me.
After all, selling services around open source seems to be the future for a lot of the software world. Oracle made 70% of their revenues last year based on services. There are clear arguments to be made in capturing a large mindshare by introducing quality open source products and monetizing it with services, customization and support.
And services, customization and support are areas that the Indian outsourcing industry has already mastered!
They clearly have the manpower, they must be having an insight into industry trends and needs, and they definitely have a strong story on the services side. So why not do it ?
Why didn’t Wipro, TCS or Infosys think of JBoss, Pentaho, Zimbra or zmanda ?
I have talked to many, many people on this, and I don’t buy most of the reasons I have heard – such as “their leadership is not innovative”, or “theres not enough money for them to be bothered”, or “they are too comfortable with their current business model”. Those sort of simplistic reasons dont hold much water, in my opinion.
The only plausible explanation that I have been offered by a friend of mine is this – fear.
Indian outsourcing majors do not want to antagonize any of their potential customers by releasing software that can potentially cannibalise their customers markets.
Is that what this is all about ? Do nothing that could jeopardize any relationship with any future customer ? That seems to tie up Indian companies in a strait jacket with little wiggle room, since one could argue that any product launch competes with a potential customer.
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The Indian outsourcing companies are definitely working on OSS – I know of Cognizant working in this area and I am sure Wipro/ TCS/ Infosys are also doing. They are not giving a lot of publicity since the clients themselves are not making a lot of noise about this.
There’s more to this than meets the eye! The reason why the big Indian companies are nervous about open source and product development has less to do with their ability to deliver per business model and more to do with how they have equipped themselves to fight legal and brand wars.
Nilkani of Infoaya,( I like that twist ;-), isn’t wrong when he said you need $100 mill to develop a global product. You do!
And most of that money is spent on legal fees, protecting your exclusive marketing right, to the product you developed from me-too’s, which are only to be expected in the global marketplace.
Not to forget, huge marketing investments. Let’s not be naive, even Viral Marketing costs money and expensive human resources.
Indian companies like TCS, HCL, had killer products in data management, and finance systems, way back in the mid-80’s, about the same time as Oracle, AccPac, etal, we fumbled in our ability to build global product brands, sell and market ourselves in that marketplace.
IMHO, where I believe we go wrong and the Israeli’s go right is our approach to business. We start with the product idea, the shirt, then hire tailors, build factories and then go looking for buyers with brands who can afford our products, we are happy to play the labour arbitrage game.
The Israeli’s approach this with a different DNA. They shd! they have friends and family running Wall Street ;-). They first look at the consumer space ( B2B, B2c), look at target consumer needs, say sports clothes, define differentiators, say an ipod pouch in the swim suit, patent the product, market the idea, get the sales and distribution rights in place and then start developing and producing the product from India, and enjoy all the labour arbitrage they can get.
Majority of indians work like vending machines, put in money you get money instantly, or in other words they want quick returns with minimum investments. This works well as the risk taking is avoided by adopting to simpler models. As a simple example, one can take a look at the Tailors. Now they do stitch clothes …”taylor made” to customers standards, now why dont they open a garment factory? since they have the skill of stitching clothes why dont they start it? The answer is simple, they dont want to risk their life savings or get into debt, they are happy with the profit margin they get. So that doesnt mean that he is some kind of a coolie or something!!! His investment is just time and what he earns is the cost of his labour and he is happy with what he gets. I hope you got the point?
Small unknown companies are creating miracles in Opensource. The problem iwith opensource is Service, repeat performance and peace of mind for the corporate users. So even if the biggies churn out junk, many buyers go for them than for open source due to service, dependability.
Panacea Dream Weavers Software in Chennai has developed a Tamil internet browser that promises to help rural people understand the hundreds of millions of Web pages. It is designed to translate English data on Web sites into Tamil, though the accuracy of conversion is up to 70%.
It has also created a lot of tools, applications in OPEN SOURCE
http://www.pdsoftware.in/open_source.html.
One more comment. I just saw this para that you wrote:
“I have talked to many, many people on this, and I don’t buy most of the reasons I have heard – such as “their leadership is not innovative”, or “theres not enough money for them to be bothered”, or “they are too comfortable with their current business model”. Those sort of simplistic reasons dont hold much water, in my opinion.”
Why do you think these reasons are simplistic and don’t hold water ? Especially the last one ? Let me give you an example: I have a software product that is an application platform for cell phones out in the market that is robust and deployed in over a 1000 customer sites. The memory footprint and power consumption is safely within the 15% buffer mandates required by the industry. I have invested $2.5 million over 3 years to perfect the product, the production process and today, my profit margins are on the rise. Someone comes to me and says “guess what, lets use this tool that reduces our ongoing investment by another 10%”. As a person running the budget, I’d be forced to ask:
a) Is there really a _need_ at this stage to incur the risks of a new technology to acheive 10% reduction in costs ? What does that 10% do in terms of my bottom line ?
b) What are the costs in evaluating this new tool ? Gee, I spent $2.5 million over 3 years to perfect the process and the method. I had to put it through expensive testing processes and 3rd party validation. I need to run this new tool through the entire process again to validate it is really as good.
c) What are the costs in running both parallely and doing a transition ? Transition costs are always heavy – its in addition to new technology cost
All these questions boil down the basic question of “Is there a _business_ need” ? If there is, then sure, go for it – try it out. If there isn’t, that is, the cost parameters are well within your overall business model, why try to fix something that is not broken ?
Three years down that line, this same requirement may be a business requirement. I may have more competition or a declining market where 10% cost reduction may be critical to survival. If I am a good analyst, hopefully I will see this coming before it really hits me hard, so I can start the evaluation or transition process. But again there has to be a “NEED”.