'We see more development work out of Hyd centre'

Q&A/ Bill DeLong

, vice-president (worldwide customer services and operations) of the $405 million Progress Software Corporation is unperturbed by the fact that the contribution of the Asia-Pacific (APAC) region to its global revenues has not touched the double digit mark as yet.

"It's just that the contribution of markets like North America and Europe, Middle East and Africa (EMEA) to our revenues has been increasing as well, making the contribution of the APAC market to the global pie look small," he says, shrugging off any insinuations about the company not performing well in this region.

In an interview with Business Standard, DeLong puts forth the company's strategy with regard to India.

Progress Software has a development centre in Hyderabad employing around 70 people. What kind of growth does the company foresee for the centre in terms of size and the kind of work being done out of here?

Our largest software development centre outside the US is here in Hyderabad. We have invested $2 million so far in India and will be investing another $3.5 million in 2006. We are looking at ramping up our headcount to approximately 140 by the year end.

Our employees in Hyderabad are involved in software design and development in Java, C++ and .Net. While the employees have been working on developing portions of various products, the full release of Sonic ESB 7.0 has been done out of Hyderabad as well (to be launched shortly).

The Sonic ESB 7.0 release accelerates modelling, configuration, testing and deployment of projects across large-scale service-oriented architecture environments. It also provides an implementation of the advanced Web services standards. We see more of such end-to-end development work happening out of Hyderabad.

The contribution of the Asia-Pacific region to the company's global revenues has not been on a major uptick. As per the Q4 FY05 figures, the region contributed to about five per cent of the company's global revenues. So what plans has the company outlined to develop a market for its products in India?

We are working on establishing a sales presence in India. We are already in talks with system integrators and hope to seal some agreements soon.

Progress Software recently announced the acquisition of privately-held Actional Corporation for approximately $29 million. What will be the impact of this acquisition on the development centre in Hyderabad? Will we see any transfer of work from Actional's worksite to India?

Actional is a recent acquisition and expands our offerings to include Web services management. We have not as yet taken a call on whether we should transfer some work to India or go ahead with the existing centres.

In case Progress Software decides to transfer some work to India, what kind of cost savings would the company garner?

The cost of development in India is one-third of the respective cost in the US. There is, therefore, a cost advantage. However, our prime consideration to transfer more work to India will be skill availability.

Progress Software is sitting on cash reserves of around $207 million. Is the company on the prowl again?

Actional and NEON Systems have been the recent acquisitions. While we are always on the look out for potential buys, there isn't any on the horizon at present.