Investing in research
Do you know how much India's software companies invest in research every year? Have you heard of Infosys research Labs, Wipro research labs or TCS research labs? I haven't. I bet they don't exist.
IBM and HP continue to transition into services based business models. This makes sense because corporates worldwide want to outsource complicated tasks like setting up and managing IT infrastructure. But both IBM and HP continue to spend billions of dollars annually in research ranging from microprocessors to storage technologies. You could argue that they are rich. But don't forget that TCS alone has a market capitalisation of 27 billion USD. So, money is not the constraint.
It is anybody's argument whether companies like Infosys have pockets deep enough to attract the best researchers from anywhere in the world. I think the problem lies in the mindset.
A decade or more of successful cost arbitrage based business model has made these companies think that services based business model does not require research. I do not have anything against the peanut pay model. ( Peanut pay : working for peanuts). India's strength is in numbers and we will continue to churn out software engineers by the millions. But does that preclude investing in research?
American companies invest heavily in technology research , either through grants to universities or setting up their own research labs. China is fast catching up, by providing huge federal funds to their universities. The thing with research is it rarely pays dividends in the short term. In the long term as well, unless a company has its own research lab, university research cannot be claimed as proprietary. However, good quality research helps every one in the technology business by creating a culture of innovation which benefits the risk takers. The T J Watson center of IBM research labs does outstanding research but not every project becomes a product. However , as a company, it gives IBM a definitive edge whether it is a new Service Oriented Architecture (SOA) or a new mass storage solution.
Indian software companies should re-think their strategies and start investing in research. By doing this, they will only help themselves in the long run.
3 comments:
Infosys research 'perse'labs is called- SetLabs
TCS also has one called "innovation labs
Wipro has one too and here is HCL's -- hcltech.com/hcl-research
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