The Hindu Business Line : Design outsourcing boosts software sales

OUTSOURCING of design to India by car manufacturers has boosted sales of related design engineering software. "The influx of design outsourcing into India is helping," agreed Mr Narendra Reddy, Managing Director, India Operations, UGS, an engineering services company that offers Computer Aided Design and Manufacturing (CAD-CAM) solutions and Product Lifecycle Management (PLM) solutions.

With General Motors and Ford entering the country, as well as Tata Motors and Mahindras setting up design labs, the necessity for engineering service solutions is increasing. Global products, as opposed to local ones, are being favoured with the setting up of microcosms of labs abroad.

The design outsourcing market is now put at $500 million and will be worth $12 billion in the next five years, according to Mr Reddy.

With a steady growth of 12 per cent, the manufacturing industry is contributing to adoption of CAD-CAM products.

According to Mr Natarajan Viswanathan, Managing Director, Parametric Technology India (another CAD-CAM software provider),

"The Indian automotive industry, consisting now of both foreign and home grown players, has been at the forefront of adoption of the latest CAD/CAE/CAM technology and processes. Supply chain companies are also implementing them. Tier I-III suppliers who form the automobile ecosystem in cities such as Chennai, Pune, Bangalore are adopting these solutions."

Manufacturing companies will also require PLM solutions in the near future. CEOs must understand the need for them, felt Mr Hans-Kurt-Lubberstedt, Executive Vice-President, Asia-Pacific, UGS. "Companies need to get their products out to the market in time. Even a slight delay in the release may lessen their chance of getting the maximum revenue they could get," he explained.

The company derives 40 per cent of its revenues from the automotive sector, 24 per cent from engineering services and 11 per cent from industrial machinery.

The headcount is 6,800 worldwide, with 500 in India. Sources close to the company said this would double in the next two years.

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