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HCL Technologies has extended its lead over its competitors in engineering and research and development services (ERS).
Revenue from the offering in the December 2011 quarter touched $193 million as against nearly $117 million two years ago.
HCL has become the largest ERS player among the top Indian outsourcing providers. In the last two years, it has closed the gap of $50 million a quarter and now, has a lead of $3 million a quarter over Wipro, according to a senior company official.
Under ERS, clients outsource their end-to-end product development with focus on business impact. Typically, the client gives the prototype of a product, which will be developed by HCL. Also, HCL develops and products, patents it and delivers it to clients who use their labels in the final product.
Says Mr Sandeep Kishore, Executive Vice-President, Engineering & R&D Services, ERS occupies a strategic position at HCL. For HCL, there has been a year-on-year growth of 22 per cent in ERS, which is more than the industry average of 16-20 per cent as reported by Nasscom.
These are exciting times in the ERS and R&D industry. Various estimates say the global R&D spending in 2011 at $1.2 trillion, up 3.5 per cent from 2010 with majority of growth driven from emerging R&D hubs in China, India while the US remains the largest R&D spender with 34 per cent market share. The common investment drivers are efforts to make the product more efficient, safer and providing superior user experience.
On demands for ERS, Mr Kishore for example said that there is an increasing trend of auto companies investing in embedded software.
HCL not only provides core product development services but also help customers in creating ecosystem advantages around their products either through collaborative strategic services or through HCL productised solutions. This is what we call - Engineering out of the Box or EOOTB in short.
The three tenets of EOOTB are:
Core Products – full system development, Product development life cycle services based on industry domain expertise
Ecosystem Innovation – extend the competence of core products by creating platforms for ecosystem innovation
User Experience – for increased adoption of products through the ecosystem, it's critical that an improved user experience is provided to the customers.
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