Offshore Outsourcers Eye the Big Time

India-based vMoksha Technologies inks U.S. outsourcing deals in push for growth; CEO says more sofware professionals in India are staying there.

It isnt only large and well-known India-based outsourcers such as Wipro Technologies and Tata that are aiming for the U.S. IT market. Smaller companies such as vMoksha Technologies, based in Bangalore, India, and headed by CEO Pawan Kumar, are also seeking to grow rapidly by signing deals with U.S. companies.

Founded in 2001, privately held vMoksha has 20 customers and had $15 million in revenue last year. Its U.S. headquarters is in San Jose, Calif.

Before founding vMoksha, Kumar was president of IBM Global Services in India for four years. Prior to that, he was with Fujitsu-ICL Systems Inc. for four years and with Tata for 19 years.

On a recent visit to eWEEKs offices in Woburn, Mass., Kumar outlined his companys strategy in an interview with Executive Editor Stan Gibson.

What are vMokshas primary concentrations?

Retail distribution, BFSI [banking, finance, securities and insurance] and entertainment. We have a subsidiary called JadooWorks—Jadoo means magic—which does 3-D animation for things like TV episodes.

In retail, were creating software for inventory systems and point of sale, including a dashboard for optimizing shelf space and floor space.

Major retailers in Singapore are our customers, although were not in the U.S. yet.

In BFSI, we are an ISV for banks. We are developing Internet banking applications, both personal and corporate. Several U.S. banks are our customers, but I cannot name them.

In general, we notice today that venture capital firms in Silicon Valley are looking at the business plans of companies seeking funding and asking, "What is your India plan?"

Outsourcing in India can help startups extend their run rate because our costs are less.

/zimages/2/28571.gifA recent report says outsourcing will lower inflation, create jobs and boost productivity in the United States. Click here to read more.

Your goal is to make vMoksha a major outsourcing player. How fast are you moving toward that goal?

We have 700 people now, and our goal is to reach 1,000 people in June or July. We feel we can get 50 to 60 people per month at our two centers in Bangalore and Pune.

Do you see the pool of Indian engineers getting used up and the price of labor going up?

Two years ago, software professionals from India were asking for 25 percent increases, not once a year but twice a year. But the downturn in the U.S. economy has held this in check. We used to lose a lot of people to H-1B visas. With the lower quota, more people are staying in India.

The issue of managing a project remotely is very important for outsourcing customers. How do you address that?

In managing projects remotely, first, the telecom infrastructure is very good. Language and cultural issues could be important. Typically, we send one of our senior persons over here to work in the onshore environment and understand the cultural issues.

What is the level of work you are performing for customers? Are you just doing code, or are you working to understand the business processes?

Its a mixture. The first pilot job would be QA [quality assurance] testing. Thats the safest from the customers point of view. Then we start moving up the value chain to development, testing and then the high-level design phase. Finally, we come to the inception phase.

Our experience is better when we take the full responsibility from India—the whole life cycle of the project.

Are you worried about competition from other outsourcing countries, such as China?

We were more worried about it two years ago. But that worry has partly gone away. I visited China along with our prime minister last year. China has to address the IP [intellectual property] issues, very clearly.

In the 12-year history of outsourcing to India, there has not been a single violation of IP. China cannot claim that.

Youre competing with Wipro and Tata for the best engineering minds in India. Are you paying more than Wipro?

No. But I was interviewing a product manager, and I asked him why he wanted to work for vMoksha. [He said] attention to people would be a difference. We can give people what they want to do, and we dont treat them as if were a machine. Salary is important, but its not the only important thing. We go to the campuses of IIT—Indian Institute of Technology.

Are IIT graduates comparable to graduates from the Massachusetts Institute of Technology, for example?

We would claim that today, 200,000 students take the IIT entrance test, and only 2,000 are admitted to IIT.

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