IT firms use 'innovation' for their success

Every beginning is a low-key affair for any industry, but those who emerge triumphant in the long run, make new benchmarks for others. One question that baffles everybody is - how did they make it?

Be it the global software company like Microsoft or an Indian company like Cranes Software, one thing is common behind their success - Innovation.

But what is innovation? Said Asif Khader, managing director of Bangalore-headquartered Cranes Software International: "Innovation is not just filing or getting as much patents as possible, but is about transforming your ideas into innovations time and again in every aspect of business, depending on the need and situation."

Cranes Software, incorporated in 1990 as a marketing company, is an example of how ideas are transformed into action at the right time can make an impact in the business model in the long run. Cranes started in the '90s as a third-party international distribution company in a small 800 square feet house. The company that sold high-end technology products was going strong until 1998 when the US-imposed embargo following the Pokhran II nuclear blasts in 1998.

"This put Cranes out of business and we had to rethink our business strategy on how to come out of the vicious cycle," said Khader.

He said: "We realised that the solution lay in changing the business model from marketing to a product company, but since our strength lies in the ecosystem of selling high-end technology products, we stuck to 'acquire, enhance and expand' (AEE) model," he added.

As part of the strategy, Cranes started acquiring companies like PeakFit in 2000, Systat in 2001 and SigmaPlot in 2003, and then put in place a development team that enhanced the product capability. Started as an 18-member company for marketing high-end technology products, Cranes is now a $47 million company (FY'06) with 517 people on board. The company is also being listed, apart from the BSE and NSE, on the Luxemburg Stock Exchange and in Singapore.

Bobby (Biswadeep) Mitra, MD, Texas Instruments (TI) India felt that innovation is something the impact of which must be felt and it should bring changes to the lives of the millions who have so far not benefitted from the technology boom.

"Our strategy for addressing low-cost markets has been to use the latest technologies or to be in front of the bus rather than rely on old technologies for low-cost and low power devices," he added.

He said that an areas the TI Bangalore R&D centre working on was to increase the telecom penetration in the rural areas. "Telecom penetration in rural areas is presently just 2 per cent and we hope to bring the cost down and increase the rural teledensity," Mitra said.

TI India has been awarded the highest of 300 US patents, the highest number for any R&D centre in India. Part of the innovations made by TI's Bangalore R&D centre is the first single-chip DSL modem and the world's first single chip cell platform.

The company is working on developing low cost digital medical solutions such as X-rays and glucose meters.