Intellectual property is new buzzword in IT
It is important for the services segment, which is now looking at generating revenue using less number of people. Former staff can continue to use official email id
By P P Thimmaya, TNN |
BANGALORE: Intellectual property (IP) might sound hoary, but it is the new buzzword in the IT industry corridors . More so for the services segment, which is now looking at generating revenue using a lesser number of people.
Till now the Indian IT services industry has been growing its business in a very linear fashion, which means that any growth in revenue comes with addition of more people. Indian companies are now seriously looking at the IP option to break this linearity.
Nasscom vice president Rajdeep Sahrawat said there will be significant governance challenges for large IT services companies as they go about adding more people every year. This, in effect, would mean that they should be looking at generating revenues through other models.
Very recently, Infosys, as part of its organisation overhaul announced increased focus on R&D and commercialisation of IP. Wipro, on the other hand, is intending to generate 20% of its revenue from the non-linear segment.
A single definition does not fit the bill for IP. For a software product company, IP would mean the creation of technology which is repeatable without changing any of the specifications . In a services context, it could be more of a reusing of technology in multiple times with a little amount of customisation.
Though services has been the mainstay of Indian IT industry, there has been a growing number of product companies that are creating IP and a business model around it.
e4e MD Sridhar Mitta said the IP business model for IT services companies are of two types: Firstly, they are looking at developing technologies which are reusable so that they do not repeat the process again. Secondly, they are looking at developing IP which can be directly sold to its customers as a value add to its existing services. This certainly brings in a premium for IT services companies as they are able to command higher pricing than the conventional work. Typically, these companies either add the IP over their existing services or sell it separately . The IP mantra is also very important for small and medium IT companies .
Mr Sahrawat said SME companies cannot play the scale game so they will have to take the IP route to remain competitive.
However, the moot point for these companies is how do they go about identifying future technology requirements and market acceptance. There are some things which services companies can learn from product firms. Subhash Menon, CMD of Subex, a telecom product company, said IP creation requires very careful planning in terms of future market requirement and technology. “We scan the horizon and look at IP which is doable,” he added.
Srini Rajam, CEO, Ittiam Systems, a DSP technology company, said that IP creation could be driven by multiple sources: 1) market trend in a particular technology area; 2) new requests coming from different customers that correlate to pattern of need and lastly a technology breakthrough that springs a new idea having potential impact in the industry.
Dr Mitta said, “Very few companies have the management capabilities to drive an IP business.” This is more apt with the IT services companies who require a different bandwidth in dealing with IP business.
Till now the Indian IT services industry has been growing its business in a very linear fashion, which means that any growth in revenue comes with addition of more people. Indian companies are now seriously looking at the IP option to break this linearity.
Nasscom vice president Rajdeep Sahrawat said there will be significant governance challenges for large IT services companies as they go about adding more people every year. This, in effect, would mean that they should be looking at generating revenues through other models.
Very recently, Infosys, as part of its organisation overhaul announced increased focus on R&D and commercialisation of IP. Wipro, on the other hand, is intending to generate 20% of its revenue from the non-linear segment.
A single definition does not fit the bill for IP. For a software product company, IP would mean the creation of technology which is repeatable without changing any of the specifications . In a services context, it could be more of a reusing of technology in multiple times with a little amount of customisation.
Though services has been the mainstay of Indian IT industry, there has been a growing number of product companies that are creating IP and a business model around it.
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e4e MD Sridhar Mitta said the IP business model for IT services companies are of two types: Firstly, they are looking at developing technologies which are reusable so that they do not repeat the process again. Secondly, they are looking at developing IP which can be directly sold to its customers as a value add to its existing services. This certainly brings in a premium for IT services companies as they are able to command higher pricing than the conventional work. Typically, these companies either add the IP over their existing services or sell it separately . The IP mantra is also very important for small and medium IT companies .
Mr Sahrawat said SME companies cannot play the scale game so they will have to take the IP route to remain competitive.
However, the moot point for these companies is how do they go about identifying future technology requirements and market acceptance. There are some things which services companies can learn from product firms. Subhash Menon, CMD of Subex, a telecom product company, said IP creation requires very careful planning in terms of future market requirement and technology. “We scan the horizon and look at IP which is doable,” he added.
Srini Rajam, CEO, Ittiam Systems, a DSP technology company, said that IP creation could be driven by multiple sources: 1) market trend in a particular technology area; 2) new requests coming from different customers that correlate to pattern of need and lastly a technology breakthrough that springs a new idea having potential impact in the industry.
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But, one needs the appetite to manage the risk while going after the IP business as this fraught with multiple risks. The question is why should a IT services company devote its time and energy and resources in coming out with a IP which may or may not make it at the marketplace. Dr Mitta said, “Very few companies have the management capabilities to drive an IP business.” This is more apt with the IT services companies who require a different bandwidth in dealing with IP business.
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