The Hindu Business Line : Making sure it works

It's one assurance all shoppers want - that a given product or service does what it promises to do. Now one would like this to happen in the case of software too. Enter software testing services ready for the show.

SCENE I: As eWorld settled down in ThinkSoft Global Services' conference room to chat with its COO, Vanaja Arvind, her first reaction to the objective of this meeting was "Why should we reveal the secret of our success, which would only encourage new competition?

Scene II: Scour the Nasscom Web site much as you want, but you won't spot `Software testing' under Key Service Lines that Nasscom has distinctly set out for the export market.

Nasscom probably includes this as a subset of some category such as `Software and services' or `Processing services." Put these two together and you come up with a market that offers good business to the few players in it, but which has not caught the attention of many — software-testing services.

As is evident from the name, the business is about testing software that has been developed and certifying that it is free of bugs and/or that it performs a certain function that it is meant to. eWorld met four players in the market, hand-picking those whose entire resources were focussed in the area of software testing.

ThinkSoft has been in the news recently, saying it will now look at the Indian technology user market for its testing services, whereas its focus has so far been on exports. The company has been in the business since the early '90s. But it converted from being a boutique consultancy to a full-fledged service provider in 1998, says the Chief Executive Officer, Asvini Kumar.

What was management thinking when it entered this space? Says Kumar, "Clearly, the neutrality we brought in made a difference to the client. The other value-add that we knew we would bring to the table was time-to-market." ThinkSoft specialises in that part of the testing arena that requires domain expertise. In other words, with its focus on banking and financial services institutions, ThinkSoft's expertise comes in knowing the intricacies of banking and financial services, rather than true-blue technology. Says Arvind, "A very simple example of how we add value is when our associate finds a bug in the `account transfer' module of a software. He helps explain to the software developer that when there is an account transfer, the software should `move' the figure from one account to another and not `copy'." In other words, after the transfer, both accounts cannot have the amount that was transferred.

Then, what about `domain experts' that software development companies boast of hosting? Does that not make a testing shop with domain experts redundant?

No, says Kumar. "We bring an objectivity that is important. If a software development company had an in-house testing arm, it may not be in its interests to reveal all the bugs in its software, even though the bugs may later be fixed, or that it had a design problem to begin with." Sure, that's not truly high integrity. According to Kumar, "Even if the software developer has done a good job, it is important for a neutral shop like ours to certify that."

Different models

It is interesting that among the few `testers' in the market, the business models are many. Ask ThinkSoft if it is tempting to also offer the software development services given that they hire `techies'. Arvind's counter is, "We don't hire too many `techies'." Clearly, its focus is on the banking domain. But not too many others follow that path.

ReadyTestGo (RTG), which had a high profile launch in 2000 but has remained shy of the media since, is proud of its technology focus. Sridhar Kulasekharan, its Chief Technology Officer, says, "We are primarily into performance testing. In other words, in that space, if resources in a network are required to service a certain number of users, our responsibility is to ensure that that happens." RTG's claim to adding value is that "we help `tune' its client's resources so that it doesn't need to invest in extra resources." On one occasion, he says, RTG helped a bank save $1.2 million by merely tuning its resources and eliminating the need to buy additional hardware. He says, "One additional, unnecessary line of code can lead to a hardware eating up 100 per cent of its resource instead of 10 per cent. We specialise in knowing which line of code that is."

Kulasekharan says that RTG is technology as well as vendor-neutral. This means that irrespective of the kind of technology or the vendor for testing tools that the client chooses, RTG would service them. Now, why is that important? Says Kulasekharan, "A typical client of ours has to deal with a hardware vendor, an applications service provider, Web services provider and a database vendor. All these systems have to run in an integrated fashion. If something goes wrong, it is difficult for the client to pin responsibility on one. Here, a testing services provider who is not bound to a single vendor is crucial.

Ramchander Sukumar's Indium Soft operates on similar lines, that is, its offerings are packaged more on the lines of technology specialities rather than domain. But, Indium allies with CompuWare, a maker of software tools.

Says Sukumar, "We do offer services on any tool in the market, but if our client chooses CompuWare's tools, it helps us offer flexible licensing and the like." Accordingly, as the offering differs, so do target clients. While ThinkSoft's clients are mostly banks and financial institutions, about 80 per cent of Indium Soft's revenues come from software product companies. While functionality testing also forms a part of the services that a player like RTG offers, in its case, the technology space itself becomes a function. Says Kulasekharan, "Like banking and financial services is a domain, technology is also a domain for us, wherein we service clients who are technologists."

Primary challenge

Quality manpower is a challenge for some of these companies. Says Kulasekharan, "We need really good software programmers especially for our performance testing division." He says good programmers are hard to come by. On one occasion, RTG had an advertisement for recruitment. There were 600 applications from which 140 were interviewed. Kulasekharan himself was on the interview panel. Finally, he found one person who fit the bill.

Sukumar says that situation "sounds familiar to me." For, "performance testing requires that manpower be clued in on a host of technologies, including middleware. It is difficult to find truly good personnel." So how does Indium find them? "Nine out of 10 people in our team have been trained by us."

Indium has a training arm that trains candidates for a fee. Once that is complete, it handpicks from the lot. "It helps us save on training costs," he says.

The market and growth

All right. This sounds like a good market. But what is the market size? Sukumar says that the automated software testing tools market is estimated to be around $2 billion by 2004. According to Kulasekharan, "One estimate has it that by 2004, the market for testing would be $3.2 billion out of which performance testing alone would be $880 million.

Bikash Mathur, Director, Maveric Systems, which is into load/performance, functional, system integration and user acceptance testing, says, "The typical ratio of testing to software development is approximately five per cent. Our estimate is that this will climb to around 10 per cent in the next three years with a potential upside of 20 per cent of development budgets being allocated to testing and quality assurance by 2010."

While the industry waits for that kind of growth, here's a split-up between performance and functionality testing: performance testing is a high-margin business, needing highly-skilled manpower, while projects themselves are sporadic; functionality testing is low margin, requires a lot of manpower but can help sustain an organisation.

Market reaction

But, most of these players seem to have actively set up shop at a time when the slump hit the business. So, has business been a rollercoaster ride? No, says, Sukumar. "It is true that the market went down a bit, but the fact that we have grown at such a time gives us a lot of satisfaction. It has been a great learning experience." Kulasekharan echoes the thought. "We have grown 120 per cent in the year ending March 2003 compared to the previous year. We don't see a reason why that growth should not continue this year too." RTG says that its manpower — currently at 75 — went down a bit but that was "due to natural attrition."

Interestingly, asked if the dotcom slump hit him, Sukumar says, "We hardly sold to the Internet space, though we tried a lot. It turned out to be a blessing in disguise."

It is intriguing to find that these companies have actually fared as well as — if not better than — most software development firms. Mathur has this explanation to offer: "The slump had nothing to do with the testing market." He says it is important to note that testing is linked to software efficiency. "Everyone tests, the question is how much of code do you redo and how much remains the same. As software companies are forced to generate higher profits, they must increase their efficiency." In other words, the testing market gets more prominence from top management of software development companies when times are tough.

bharatk@thehindu.co.in

Picture by Shaju John

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