‘In Next Three Years, India Could Have Its Own Silicon Valley’
With the advancing technology, the product engineering has been witnessing a robust growth of around 20 per cent annually. GlobalLogic, a bootstrap from Delhi, now headquartered in the Silicon Valley has today become one of the leading players in the product engineering space globally.
In an exclusive interview with BW Businessworld, Sumit Sood, Managing Director, GlobalLogic India speaks about the efforts that go into product engineering, re-skilling require in the IT sector, the impact of cloud technology and more. Edited excerpts:
Which are the core areas of your work?
Our four core areas are communications, core technology, medical devices, and media. The auto motive is a big component from where our growth is coming from but we put it under communications as we don’t work on the combustion engine, we rather work on electronics, software and the experience inside the car.
How long have been in the market and how big is your team?
We have been around for 17 years; we have close to 10,000 employees globally with half of them in India, while a significant chunk is in Eastern Europe in countries like Ukraine, Poland, Slovakia and a small proportion in Latin America as well.
Tell us about your journey.
It started as a bootstrap startup in Noida. Today, 70 per cent of our clientele is from the United States (US), 20 per cent in Europe and 10 per cent in India.
Since 70 per cent of your clients are from the US, do you believe that India is far away from the US in terms of technology?
Yes and No. Let me explain why I say this. The reason I say yes, is because a lot of the innovation happens in the US. Precisely, because of this reason, we have our headquarters in Silicon Valley. We want to stay close to where the action is. And I say no because the gap is rapidly decreasing and the reason for this reduction is a societal demographic shift from where we were in 1947 to where we are now. This generation is pretty secure of its financial well being as there are a lot of opportunities around. This is leading us to a true innovation mindset era.
Today we witness a surge in engineering institutions but a dip in the quality of engineers. Many of the startups don’t deliver on the ground. Why is this so?
Globally, only 15 per cent startups make a dollar in revenue. Out of these 15 per cent, two-third of the startups never hit profitability. That means only 5 per cent ever see profitability and eventually 1 per cent of them succeed to a scale. But the fact that a lot of startups fail is not bad at all. You fail, you learn and you move forward.
We produce a few lakhs of engineers every year, but a lot of them are from institutions where they don’t learn much. It does reflect on their employability. Not many of them are truly doing engineering jobs. You will find engineers working in call centres as well. If we look at it in isolation, it may seem like a problem that only a few percent of India’s engineers are truly engineers, but a few per cent of what volume; we produce nearly 80 thousand good engineers every year. So, in absolute terms, we are producing enough engineers.
You are headquartered in Silicon Valley. Do you see something of that sort coming in India as well?
In the next three years, India could have its own Silicon Valley. It’s already happening. It could be a trio of Bengaluru, Hyderabad, and Chennai. There’s a big ecosystem of startups in the National Capital Region as well.
What are the stages of product engineering and what kind of effort goes into it?
First is the germination of an idea; innovation is the seed. Do something absolutely new. Product engineering revolves over this. Like someone comes up with an idea say, automating a warehouse. If my client says the wastage in my warehouse is very high. About 70 per cent of my pickers’ time gets wasted in the warehouse as it’s a massive warehouse and they have to walk all over the place. So, they want an automatic system to tell them what to pick and help them simplify their task. So, the idea could come from a client, we too help our clients with ideas.
The second part is to proof test the idea. You take the idea and build the basic barebones to take that idea forward. This is the Minimum Viable Product stage. Then, there is the large scale architecture stage. Finally, there is development stage. Broadly, there are these four stages in product engineering.
You have clients globally, so, how different are the demands from Indian and foreign clients?
Indian companies come to an outsource provider just for value. For Indian clients, value demand is much higher.
How’s the competition in this space?
Pretty intense. But, it’s a growing space. The industry is poised to grow 20 per cent yearly, at least for the next five years. So, there’s enough for everybody to take and move forward.
What separates GlobalLogic from other players?
In a few fundamental ways. First, we are truly a rock solid global company. So, when we work for a client, we are really able to tap into a global talent pool. Our focus on design led engineering slash digital isn’t new. We have been doing it for five years. So, we know this space. And the third is our ability to connect the dots in the ecosystem. Our clients are from diverse areas but all touching the same part of technology.
How cost effective are you?
More than global players but less than Indian players. Our workforce is diamond shaped.
Do you see more and more companies switching to product engineering in the upcoming years?
We already are seeing this. Digital is a key part of it. This is where the future is.
Do you only cater to big firms or you go with startups as well?
Startups as well. There’s a lot of interesting work going on in startups. Five years ago, a large chunk of our business used to come from startups. Today, we are radically different as 80 per cent of our business comes from Fortune 500 companies.
India is more into cloud technology. How safe is this space given the recent cyber-attacks?
A: You are actually safer on the cloud. Instead of fortifying 20 villages, you make them into one large armory. The reason why it is less secure is that it’s not in your control. For almost all enterprises, data is like a baby to a mother. There can be hits on the cloud as well. The inherent cyber-attacks are there. So, the cloud is not completely safe but safer.
How do you see the ‘Internet of Things’ (IoT) technology?
We are working with many companies and helping them with IoT solutions. Fundamentally, it is a chip sitting in every device. We are doing this work in the medical world, in the communications world, in the auto motive world as well. There’s a lot of work happening in this space. We help them in low energy communication and applied software.
How do we safeguard the IoT devices once the product’s warranty gets over as after that period the brand will take no notice of any mis-happening?
The industry will evolve to fix this. Soon, there will be standards for this.
Now that you have shifted your head-office to the Silicon Valley, will you be able to contribute to ‘Make in India’ scheme?
We look India from two perspectives- as a maker and as a market. We are present here as a maker in quite a significant way.
What challenges do you face in this space?
The policies should be made to simplify things and not make things cumbersome. Laws should address the issues. Then, there is a lack of ready talent. There is a need for a fundamental shift in the curriculum of schools and colleges as well. The focus should be on applied learning and not just theories. Why are Indian doctors good the day they come in? They do an internship as part of their curriculum; they are trained for their jobs. The fundamental training they get in medical schools isn’t available in all engineering institutions.
How crucial is re-skilling in this space?
A lot of rhetoric in India has been around layoffs but the fact is that bottom of the pyramid- the newer lot will figure out how to be abreast with newer technology, it’s the mid-management that needs to work on and this needs a fundamental attitude shift. They need to be more in tune with the new technologies.
How’s automation impacting product engineering?
Thankfully, for us. We are behind that automation. We are creating the technology that helps automation. For the industry, it has a huge impact. Take BPOs, a lot of work is getting automated away. On the positive side, it will create a very different world. New jobs and new opportunities will come up. Maybe, the students who play games in the classroom would become most employable because they can control the drones most efficiently.
How do you see the cloud technology and artificial intelligence (AI) changing the dynamics of the business?
Very intensely. Cloud will disrupt. The need for data centres will reduce. So, there will be significant implications. Similarly, for AI, in a country like India, the natural language processing capability is there because of AI. People can talk in their local language. Imagine a farmer in West Bengal could speak to a phone in Bangla and get answers to their queries. They could click a photo of something on their crop and that query goes into a computer and the farmer asks the computer how I stop this, and the computer comes up with the best tricks to safeguard the crop. Imagine the impact on that farmer’s life.
