Infotech design, engineering firms see $35-bn opportunity

India’s information technology design and engineering services firms expect faster growth as global companies crunch product timelines and offer them as a service. Design and engineering services, which are growing faster than traditional infotech services, are expected to touch $35 billion by 2020, up from $22 billion now, according to the National Association of Software and Services Companies (Nasscom). Traditional infotech services are expected to grow 10-12 per cent this year.

“There is huge demand for innovative products like mobile apps because lifestyles are heavily dependent on them. There is need for innovative products that talk to us and help us in our daily lives,” Samir Yajnik, president for global delivery at Tata Technologies, said at a roundtable organised by Nasscom.

“Both the demand for innovative products and the supply base are ripe for us to be at the highest growth trajectory. When the connected world is at play the market will grow even more,” he added.

India is emerging as a hub for design and engineering services due to availability of talent and the fact that global companies are looking at the country as a market to develop products for less.  “If you look at the opportunity for them today, for every dollar of product sale, they can make a dollar of services sale. The second important element is product development is changing towards software,” said Karthikeyan Natarajan, global head of engineering for Tech Mahindra.

Around 35 companies across the world are working on driverless cars, each with a huge demand for code. Data generation increases as more people use such cars. Indian infotech companies see this as a new opportunity. “The pie is increasing. A product is no longer a product. it is the platform for a service,” said Sudip Singh, senior vice-president and head of global engineering services at Infosys.

“The lifecycle of a product is very short now. What is core to somebody is contextual to somebody,” added Gyana Bardhan Pattnaik, global head of embedded systems at L&T Technology Services.

Besides, global companies want products for the Indian market and for exports to markets in South America, Africa and Southeast Asia. “India is a playground. If you succeed here then you take your product wherever you want. Localisation is a very strong market,” said Vamsi Krishna Vinjamuri, chief marketing officer of Altimetrik, an engineering and technology services firm.

The defence opportunity is also big for Indian engineering services firms that serve customers like Boeing and Airbus. “Defence has been spinoff for many design initiatives in the US. In India, defence has only just been opened up. It is important that the government encourages design,” said Manu Parpia, managing director and chief executive officer, Geometric.