HCL Technologies has entered into a strategic tie-up with Toshiba Corp of Japan to develop embedded software. The alliance will essentially see HCL Technologies operating as an offshore development center for Toshiba who will outsource the bulk of their project requirements to HCL.
The development which will take place at its centers in Gurgaon and Noida will be focused mostly in the mobile Internet space and wireless technologies. Besides, the alliance is also expected to focus on other software application areas like the automotive industry and Internet access devices. Most of the development will take place in areas that are futuristic in nature, a fact which has got everyone at HCL Technologies highly excited.
Says Shiv Nadar, President and CEO, HCL Technologies, "When we work in technologies that are innovative in nature, it is being at the forefront of technologies. And it is this aspect of the alliance that we are all looking forward to."
The wireless data market is on an increase worldwide and according to Cahners In-Stat Group, the wireless data market will grow from about 170 million subscribers worldwide in 2000 to more than 1.3 billion in 2004 and wireless messages will mushroom from a paltry 3 billion a month to 244 billion--a clear indicator that leadership in the wireless area in particular could be the deciding factor for many technology players. Besides, the market for embedded chips is also on the rise.
According to Nadar, the worldwide market stands at $ 700-800 billion, which is experiencing an annual growth of 9-12 percent. The outsourced market stands at $ 400 billion and India's share of this outsourced market stands at $ 6-8 billion.
HCL and Toshiba have a long-standing relationship of more than 23 years. HCL Technologies entered into a tie-up with Toshiba to sell its copiers in 1977. Subsequently the relationship led to a technology-transfer of the same. "Since then, the relationship has matured and today the two companies have expressed confidence in each other through this tie-up," said Nadar.
When quizzed about the Japanese eye for detail and strong sense of discipline, Akira Fujimasa, President, Toshiba Corp, Japan, said, "Our decision to have a long-term partnership with HCL Tech stems from the confidence we have in them based on their excellent track record in timely project delivery with key industry players." Nadar has also pointed out that there were some major cultural differences in the Japanese market as against the US and European market. While the cycle time in US is the quickest, European cycle time takes longer and the Japanese cycle time is even longer. But then Japanese markets are also surer, he added indicating the long alliance his company has shared with Toshiba.
The mobile services market in Japan is fast expanding and service providers are under pressure to stay ahead by offering innovative and differentiated services. Wireless Internet is playing a major role in the delivery of these services. It is in this market space that Toshiba would like to establish itself as a leading player and HCL Tech is expected to provide the technology for this initiative. In fact, HCL is also gearing up to address the rapidly growing Japanese market. The company has set up a separate business unit that will enable the company to further sharpen its focus on the Japanese market and provide customized support on projects.
Currently, HCL Tech has a large resource pool of software engineers conversant with the Japanese language and familiar with Japanese business practices and requirements.