PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Software/IT Services/Business Process Outsourcing
Boston automatic electronics test equipment supplier Teradyne ($70
million) and with Toronto-based electronics contract manufacturer
Celestica ($100 million).
The Celestica deal was unusual for the time—a fully-integrated,
concept-to-manufacturing (C2M) joint venture aimed at reducing
time to market and costs across the product concept, design, engineering,
manufacturing, fulfillment, sustaining engineering, and
after-market services stages. More recent contracts using this
same approach have been signed with New York IT management
software firm CA Inc., as well as with Merck & Co. and Boeing.
HCL partnered with Cisco Systems in February 1996 to set up the
Cisco Offshore Development Centre in Chennai. Beginning with 30
engineers, HCL helped develop Cisco’s interoperability software
(IOS) and network management products. In February 2006, Cisco
licensed the technology behind one of its network management
products to HCL, giving HCL full ownership of product engineering
going forward and a share of the revenues. Today, HCL has more
than 1,700 employees dedicated to providing outsourced and partner
services to Cisco.
“We’ve had a very positive relationship with Cisco that has matured
to a place where we’ve started doing some very innovative
things with the business model,” explains HCL senior vice president
and head of hi-tech and manufacturing Sandeep Kishore.
“They’ve said, ‘We trust you with our core product.’ At that point
we’re not dependent simply on putting x number of people on a
particular job. We are now improving the product design and doing
it more efficiently, we now reduce risk while adding value, and we
have therefore moved to a revenue share, royalty-based model.”
Like its Indian competitors, HCL aims to become a global company.
Overseas acquisitions and partnerships therefore figure
prominently in HCL’s growth strategy and in its goal of developing
end-to-end competence in key industries. The February 2008 purchase
of Capital Steam, a U.S. company offering lending automation
services for North American commercial banks, strengthened
HCL’s position in the commercial and retail finance market and
gave HCL more critical mass in the U.S.
In July 2008, the company entered into a global systems integration
contract with Bay Area software developer VM Ware to deliver
virtualization lifecycle services aimed at improving efficiency and
reducing power consumption in the deployment of IT services.
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