Date:30/07/2006 URL: http://www.thehindubusinessline.com/2006/07/30/stories/2006073002460500.htm

Back Offshore product development gets bigger: Forrester

Our Bureau

Predicts creation of 8-10 lakh jobs

Bangalore , July 29

The offshore product development market in India has grown 10-fold from $300 million to over $3.1 billion in five years and would continue to grow dramatically through expansion by global majors and driven by several factors, Forrester Research Inc has said.

Mr Sudin Apte, Senior Analyst and Country Head (India), Forrester Research, said that the growth rate in the offshore product development segment has eclipsed the traditional offshore IT services market in India.

In addition to the continuous expansion by pioneers such as Cisco, Intel, Motorola and Texas Instruments, several factors would drive continued growth in the offshore product development space, which has three segments — R&D, embedded classic engineering and software, Mr Apte said.

The factors include competitive product development pressures, increasing percentage of product value coming from software intelligence, large engineering talent pools in India and access to the emerging market. "More than 200 product companies have jumped onto the offshore bandwagon and established their presence in India over the last three years — through their own captive operations or outsourcers," Mr Apte said. The "unique requirements" of product development — which Forrester believes will emerge as a specialised field, separate from IT services — means that it would develop separately from traditional outsourced IT work.

Of the 30 lakh jobs in R&D, product engineering and IT departments worldwide, about 8-10 lakh are easily open to offshoring, he said. At present, about 85,000 to one lakh jobs are already offshored to India, Mr Apte added.