This growth is being fuelled by companies across a range of verticals from aerospace to medical equipment seeking to load more value-added software onto their products while cutting R&D costs.
"Product development has grown ten fold from $300 million in 2001 to over $3 billion in 2005," Sudip Apte, senior analyst & country head (India), Forrester Research and Technology Consultancy, said. He expects the growth rate of this segment to outsmart that of traditional IT services.
"In parallel to the offshoring of IT services, more than 200 product companies have jumped onto the offshore bandwagon and established their presence in India over the last three years, either through their own captive operations or outsourcers. The growth rate in this segment has eclipsed traditional offshore IT services.
Companies like Sasken, Persistent Systems, Symphony Software are making their mark in outsourced product development, while the likes of Motorola, Texas Instruments and Cisco have extensive teams focussing on product development in India.
This segment is also expected to fuel the next boom for technology professionals seeking challenging roles. From close to a lakh professionals, this segment in India is expected to offer a million jobs in the near future.
Top-notch work is now being done in India. Ferrari works closely with TCS to source multi-million dollar engineering services for engine and transmission components for Ferrari's Formula One cars. Boeing has signed an agreement with HCL Technologies for the 787 Dreamliner.
Under the multi-year, multi-million dollar project, HCL will provide engineering services to Boeing and also serve tier one suppliers for the programme.
Speaking on the factors driving this growth, Apte said: "Though offshore product development started with hi-tech companies, it will spread across a range of industries. This expansion will fuel the demand for product development skills as firms from verticals like automotive and industrial controls jump onto the bandwagon."
