astart-up can only hope

to succeed if it has a

clear understanding

of its target markets

and challenges. In fact,

competition might prove to be one

of the biggest stumbling blocksin its road to success. Given that

we live and work in a 'Bat' world,

competition is no longer limited towhat we see around us. It extends to

unseen IT start-ups and established

firms in other countries, battling for

a slice of the global tech products/

services pie. So, whether it adopts a

strategy to take on its competitors or

chooses the right space to be in, it

is important for a start-up to know

whether its greatest challengers are

its Indian counterparts or overseas

firms in China and emerging areaslike Brazil.

In a bid to help Indian IT start­

ups navigate their way through

intense competition and emerge

winners, we present the view of

some panellists who have stood up

to competition and made a name

(and a living) for themselves in the

process-Aadil Bandukwala, chief

evangelist, Leading Minds & TalentOnions; Gurudev R Goud, vice

president-business development,

KTwo Technology Solutions; Nirmal

Shah, vice president, Global Delivery,

Tescra; and Vihang Kathe, director,

International Business Consulting.

Who poses the greatestchallenge?

Kathe's experience suggests that

competition varies depending on each

i.i;. I www.itmagz.comIDECEMBER 2008 I 41

"It is the overallvalue that counts,

irresQective of.,her you are

competing againsta fellow local playeror an international

player/·

Nirmal Shah, vice president, Global Delivery, Tescra

developers wouldn't mind clockingin a few extra hours after their

routine schedule to help design a

project. Web developers usually

code, and design is not their forte.

However, in India, you will find a

lot of Web developers who know

their design like the back of their

hands. They don't mind working

late hours simply because they have

the drive, the zeal and the passion

to create that magical product in the

promised timeline.

Against overseas competition,

Shah cites maturity, a better

understanding of processes, delivery

models and technological depth and

breadth as the major advantages

that Indian companies possess.

"Barring (very) few examples,

IT vendors from other emerging

nations are really small players and

sometimes just a rag-tag bunch of

techies running a garage operation.

Scale is definitely against them at

this point in time," he says.

Advantage India

Evidently, the challenge has twodimensions and necessitates tech

start-ups to have eyes'in front aswell as at the back of their heads to

make their presence felt in a toughmarket. But do Indian techies have

, the inherent skills to help them deal

with the intra-country competition

and price wars that Bandukwala feels

are becoming a frequent occurrence?He himself believes that clients

nowadays want a relial':>le,quick and

efficient partner. "If a start-up can

build and leverage on these three

core competencies (of being reliable,

quick and efficient) other than its

technological expertise, it will neverrun out of business, no matter what

price it quotes," he advises.

Further, Bandukwala points outthat India boasts of an abundance

of 'flexible' talent and passion,an otherwise scarce resource, as a

huge advantage. He elucidates his

point with an example: typical Web

behind Indian and Romanian firms

in terms of talent, technology and

skills. He feels that these advantages\""'m~~~~\.~~\...~~"-~'-~~'\..~'-~"-~~'-

agencies in India and Romania bag

60 per cent of the work outsourced

by the US and the United Kingdom.

Other countries rapidly catching up

in this sector are Malaysia, Israel,

Bangladesh and Macedonia.

According to Shah, Indian

counterparts as well as firms in

Brazil, Bulgaria, China, Hungary and

Mexico, comprise the competition

faced by Indian tech endeavours.Goud, however, is of the view that

the biggest competition for Indian IT

start-ups comes from within India,

although some Chinese firms rule

the roost in the 'buy cheap, use and

throw' product category!

Gurudev R Goud, vice president-business

development. KTwo Technology solutions

"In order to caterto larger volumes,

firms just needto focus on offering

products/services of anequivalent 'quality at a

oomDetitive price."

niche of the IT sector. For instance,

he explains, "If you are competing

for an ERP implementation for SAP,

~~ 'S~~~~~~~~ "\\.~~~ ~~ "'-~~~~

companies like Infosys, Wipro, TCS

or HCL. However, if you are looking

for niche storage solutions, expect

competition from US companies

like EMC, HP or IBM. My firm is

engaged in the storage, server and

.network security solutions sectors.

The greatest competition we face is

from large MNCs operating in this

space-firms from countries likethe US, Israel and Russia that are

strong in the security segment and

companies like Dell, IBM and HP

that have a sound presence in storage/

server, technology."Bandukwala seconds this. His

\

~nteractive Internet agenC:y,Leading

Minds, faces great competition fromsimilar firms in India and Romania.

This is because Internet start-ups inChina and Brazil, for instance, are far

Q)oo'>

CD

j,

42 I DECEMBER 2008 I www.itmagz.comli. "t.

Adding value to Brand IndiaGoud believes Indian techies'

skills in Web 2.0, WiMAX,

embedded technology focusing

on the design of low-powered and

high-performance devices, and the

convergence of automotive, medicaland consumer electronics, are far

superior to the overseas competition.Nevertheless, he stresses that Indian

IT professionals need training on

how to present and market theirskills. "We have it in us but need

world-class presentation, businesscommunication and PR skills," he

advises. On a larger scale, he feels

the Indian IT industry should take

inspiration from the Korean and

the Swiss ecosystem, and organiseitself likewise to nurture talent and

promote innovation.

Kathe mentions India's prioritising

value-based entrepreneurship as

its greatest strength, which should

ideally be nourished with government

support. He says, "The Indian

management principles emphasise

providing value for money products/solutions to end-customers. In

keeping with this tradition, tech

start-ups need to develop world class

products that may be marketed notonly in India but across the world."

Expand your footprintIf value-based entrepreneurship

is stressed, even a start-up can hope

to gain a foothold in a market

where an older player is already well

established. "Start-ups must see

value in not competing on price,

but overall value. If you show value,

you are bound to get more business

and take that bit away from the

competition. In fact, although large

companies drive the IT industry,

smaller start-ups are agile and have

the advantage of being able to pick

''Tech start-ups needto develop world

class products thatmay be marketed

not only in India butacross the world."

Vihang Kathe, director, International Business Consulting

things up fast~r"A start-up cancarve a niche for itself very quickly

if it focuses in the right direction,"advises Shah, as he shares how his

firm co-exists with the big boys

of the Indian IT industry, and

actually gets to do some cutting­

edge work that they don't.

Goud agrees. Citing Skype,YouTube and Orkut as the best

examples of how starr-ups have

given established biggies a run for

their money, he says, "Every start­

up's mantra must be to 'give value.'

Don't worry if your way forward

is blocked by a big player because

at the end of the day, people

respect the value they derive from

a producr/service. Besides, market

leaders usually overlook a few key

points like service quality, customer

loyalty or price. A new firm can use

these omissions to its advantage."

Kathe sees the ability to

provide niche solutions modelled

on the offerings of large players

at a lower price, as being a key

factor for enabling starr-ups tosurvive in markets.

Don't get bypassed by ,_'local' companies ,,"

No discussion about competition

would be complete without

mention of the clients' perception of

competing local and international

players. When an Indian tech firm is

pitted against an overseas firm, which

one is more likely to win by virtue of

its country of origin? Further, if two

local players compete, what are thekey factors that influence a potentialclient?

.Bandukwala feels that when it

comes to the Internet platform,

clients usually don't bother about

the location of an agency or partner.

"They are only very particular about

the ability to understand, tweak,customise, build and scale the

technology they need and to deliver itin a decent timeframe. If these can be

matched, more often than not, even

price is not a barrier," he says.

Shah too stresses th(! importance

of delivering value. "It is the Qverall

value that counts, irrespective of

whether you are competing against a

fellow local player or an international

player," he says. And what adds to a

firm's value in this local versus foreign

debate? Apparently, a lot of weight isplaced on the firm's local presence in

its potential clients' city of operations.

Shah explains: "We are headquarteredin the US and some of our clients feel

more comfortable when they know

we are a 'local' company. We havelost some bids because we did not

have a presence in a particular city

or state. The bias, if there is any, isfor someone to be local to the client's

city. If they don't have that bias,

they usually don't much care about

i.t. I www.itmagz.comIDEcEMBER 2008 I 43

CD<ooCD