• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Preeti Pandey

Get the better of competition by pooling expertise... the consortium way. That's the route IT firms are taking.

WHILE mid-sized IT firms are forced to compete with the top five consulting firms for projects that were earlier considered `too small', new projects are no longer rewarded solely on the basis of cost arbitrage or brand equity per se.

There is a new buzz in the IT world. No longer is ruthless competition the key to growing market share. Knowledge sharing, leveraging vendors' expertise and collaboration make up `Ecosystem' — the new mantra of the IT industry. A lexicon defines ecosystem as the "basic functional unit in ecology: the interacting system of a biological community and its non-living environmental surroundings. These are inseparable and act upon each other". In the IT segment, an ecosystem is a consortium where companies pool knowledge and spearhead technological innovation or gain new business or both. Be it a Microsoft, an Intel, Veritas or Tier II names like Caritor and Allied Digital, consortium is key. While the concept of a consortium has been present in the US for some time now, last year saw the IT consortium come into its own in India with the formation of the Indian Semiconductor Association (ISA), the Indian chapter of the SNIA and the Microsoft initiative for a developers' community. Explains Bimal Raj, CEO, Allied Digital, "These days people (companies) from multiple strengths are coming together to bid for a project. This has become necessary because we end up bidding against the top five consultants, who have got into system integration. Allied Digital itself, a modest-sized systems integrator, bagged two large deals (read multi-crore projects) after being part of a consortium during the last two quarters, and is bidding for six other projects.

For SMEs, a consortium would be an ideal forum to pool knowledge and expertise. Perhaps this explains the eagerness with which mid-sized firms are joining a consortium as a means to increase business.

Within a month of its formation, ISA had 35 member companies 40 more are expected to sign on this year. ISA also saw rivals Intel and AMD coming together to generate awareness about semiconductors and take it outside the generic IT umbrella. Says Sanjeev Keskar, Country Manager, AMD Far East, "Even though we are rivals there are always common issues and a common forum helps iron these out. It is not always possible to have a one-on-one interaction. ISA, for instance, can be useful in dealing with (common) difficulties in VLSI engineering." In the US, Intel and AMD are funding several such research projects addressing engineering complexities. Gopal Krishna, GM, AMD India Engineering Centre, says that consortiums are active in pre-competitive collaboration, especially in research. "In the US, as part of the semiconductor research consortium, Intel, AMD and Alliance Semiconductor have invested in in-depth research studies. One interesting research project in VLSI design involves shrinking the transistor feature size to 65 nanometers and 35 nanometers, and developing a suitable circuit design for them."

Gopal also expects such consortiums to generate a resource pool of talented VLSI engineers. "Participating in a research consortium will help us harness more engineers for VLSI development. And, remember, for every VLSI engineer that we create because of the consortium we also create opportunity for software engineers and network engineers." This possibly explains Microsoft's aggressive push to create an ISV (independent software vendor) and developer consortium in India. For the first time in the software vendor's history, it has invited the developer community to participate in its development lifecycle. The project is called the Developer Community Greenhouse Programme. "India has become a very important developer (for MS) and there are over one million developers here with an estimated 20 per cent growth rate. We want to form an ISV consortium here since India is just turning the corner to become a product development market. Microsoft wants to take the lead on this front and ISVs will help us market products," says Sheila Gulati, Developer and Platform Evangelism, Microsoft India. While the first project aims to create a Bluetooth enabled application, which will enable information exchange across various handheld devices, more such projects are expected in future. www.softwaregreenhouse.com has the details.

This initiative would not only help Microsoft reach out to the Indian developer community, it would also allow the predominantly OS-oriented vendor to venture into the mobile computing space. More interestingly, this is Microsoft's first foray into a consortium. "We are the prime movers of an open mobile alliance," emphasises Gulati. The consortium bandwagon looks set to trundle on.

preetipandey@thehindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Thumbs-up

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line