GDA Technologies Upbeat on Hi-tech Outsourcing

GDA Technologies, Inc, a Silicon Valley-based electronics design automation company, has recently embarked on an expansion drive in India. After selling off GDA Technologies' IP Division to Rambus, president of the company, A.G. Karunakaran, also known as `AGK', and co-founders Ravi Thummarakudi and Gopa Periyadan, are now working towards raising the team strength of their India operations to 500, over the next two-and-a-half years.

With over 20 years experience in computer and semi-conductor industry, AGK is bullish about the new outsourcing mantra and quotes the recent NASSCOM study predicting boom time for technology outsourcing. AGK is convinced that in the future, India will emerge as a tech design hub, unlike the bug fixing and code testing centre, the software boom has created. In an exclusive interview with India Syndicate AGK shares his views on the IT industry and the times ahead…

Q. Do you see India benefitting from the Business Process Outsourcing of hi-tech Research and Development (R&D)?

A: Research and Development (R & D) expenses hits the "operating expenses" in the profit and loss accounts of electronic products companies. To increase the net margins, companies worldwide are trying to reduce their operating expenses. So the Business Process Outsourcing (BPO) market is rising. As companies spend 8-20% of their revenue in R&D, chances of getting lot of things done by for the same budget is very high by outsourcing it to low cost countries like India. With added benefits like availability of good English speaking Electrical and Electronics engineers, India will become the preferred choice.

Q. Do you foresee creation of an ecosystem for the growth of hi-tech research and engineering design in India?

A: Absolutely. Companies like Nokia, Intel, Samsung and others are establishing product development centers, test facilities and manufacturing centers to create, test, manufacture, launch and support electronics products. We can see companies starting around these major companies to support their activities. This will create growth in opportunities and consolidation.

Q. Do you think software jobs are limiting the growth potential of Indian IT industry, especially in the hardware and tech applications field?

A: I would say that software jobs are limiting the growth of hardware industry. Because young engineers are recruited by large IT software companies even before they graduate. Students therefore don't have a chance to look for other exciting opportunities such as engineering, electronics design, ASIC design etc due to campus recruitment policies. Also, the emphasis on electronics and hardware basics in general is inadequate. GDA spends a lot of resources in creating good engineer from the available talent pool or passionate EE engineer with sound fundamentals.

Q. At GDA, you have gone ahead and set up development centers in India. How do you rate their performance till now and what are your plans for expansion and growth?

A: GDA India design centers had contributed significantly to our growth in the last few years. We have created a large portfolio of intellectual property, designed several products for our customers and completed a lot of projects for companies worldwide. We have achieved 24x7 design activity by carefully partitioning the work between our design centers in India and US. In India, we plan to open additional design centers, increase the engineering headcount to 500 and support global customers from our centers here.

Q: Reports indicate that Australia, New Zealand, Singapore and Malaysia can lure away lots of engineering/software professionals in the coming years. Do you think this trend would hamper the BPO industry that connects India and the US?

A: In smaller quantities or in a boutique way, these countries can take some of these professionals or the R&D outsourcing business. Another key point to note is that the number of engineers graduating from India is a lot higher than these countries.

Q: India has always hyped the large number of engineering graduates that it produces every year. But of late there has been a suggestion that several of them are not really as good as they are being described. How do you react to this?

A: I think it is up to the companies to hire the best from all kinds of colleges and nurture them with training, tools and innovative projects. Also the companies should give something back to the universities and colleges by building a strong faculty/industry connection.

Q: Is skill availability a major challenge in your area?

A: Yes, it is a challenge. There is expertise in various pockets of the world. Hardware design and development expertise is not easy to find in India. The key is to find engineers with passion in Electronics and train them to use new tools and methodologies.