Wednesday, October 07, 2009

Promising Acquisition - III

This is third in the series of Promising Acquisitions.

MindTree, an Indian Software Services company,recently acquired the Indian subsidiary of Kyocera Wireless. The Indian unit is engaged in wireless product development, software engineering and product testing for its global parent.

I have always admired MindTree for two reasons - Mindtree lives by its values. It clearly articulates what it stands for in the software services market and it also clearly articulates its path towards growth. It has aimed to achieve $1 billion dollars by 2014. To achieve this vision, Mindtree has been actively working on identifying several growth engines that could propel the company towards its vision. And the recent acquisition is one such initiative. According to Asok Soota, the chairman of MindTree, the businesses that has the ability to contribute over 10% of revenue have been identified as growth engines.

This is not the interesting news...The news which I want to highlight is the capability that has been acquired by Mindtree due to this transaction and what are the new offerings that we can expect from Mindtree because of the new capabilities?

Yesterday, Mindtree has announced that it would enter in 3G Mobile Handset business. Yes, in the Phone Manufacturing business...Can u believe a software services company getting into the product business?. I just cant. I truly believe that companies are not just making inorganic moves just to make topline look good...but also making creating endeavors to establish their mark in the industry.

According to the press release, the new business will offer feature-rich, white-labeled mobile handsets to telecom service providers or original equipment manufacturers. The Kyocera team, acquired by Mindtree, has earlier delivered 45 million wireless phones and has extensive experience in 4G technologies like WiMax. It also has experience in getting the product manufactured by contracting partner ecosystem. MindTree has also emphasised that it is going to invest on generating IP in this new business.

Thursday, October 01, 2009

Incentives to Change!

I have insisted in the past that IT shops being run as a Business with General Management Principles. This approach would not necessarily cultivate creativity and collaboration in the organization. There is tremendous amount of scope for innovation in reforming IT organization structure, incentive mechanisms and roles/responsibilities. Hardly very few companies have experimented with those kinds of ideas.

I wanted to highlight some of other interesting ideas that got my attention in the recent past. US Federal Government has recently announced (and ended) a program called 'Cash for Clunkers'. This program encourages the car owners to trade in their old cars with new/used cars with financial incentives. The objective of the program was to promote energy efficiency and get rid of old cars. This initiative was also aimed to trigger some demand in the automobile industry.

Now, How do we relate this idea to IT?. Here is a perspective from This blog post in the CIO website proposes an idea - Cash for IT Clunkers. Can we promote a program where users can trade-in their legacy hardware/software assets with new/cutting-edge technologies which would result in end-user productivity & efficiency and obviously some financial benefits as well.

My thought process is that these kind of mechanisms need to be experimented in the CIO shops / Internal IT organization itself. These mechanisms will give an opportunity to rejuvanate the IT landscape with creativity and get rid of older and expensive systems.

I also wanted to highlight some of the similar ideas happening in other industries...(especially in India)

1.Levis (Jean Trouser Brand) recently introduced a campaign where people can buy a Jean on EMI (Equated Monthly installments). For example, if a Jean costs Rs. 1500, and an ordinary consumer (who is used to pay only Rs.500 for his Jean) would be able to avail the benefit and pay only Rs.500 for 3 months. Thats creative!. Through this program, Levis tries to capture the market share of middle-class consumers who are not their regular customers, but always aspire to purchase high-value items. Would we see such ideas in procuring new product/tool licenses in IT industry?. We'll have to wait and see.

2. Recently, there is a company called BagSutra floated a business where people can rent expensive/designer bags on daily rents. The benefit to the customer is that they dont need to buy those luxurious bags for themselves. At the same time, they would get to change the bags very ofen by becoming a member of this program. I dont see any direct relationships with IT industry per se. But I think SaaS gives this flexibility.

In summary, creative pricing & marketing ideas would certainly accelerate the adoption of new solutions.