“My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy. More and more major businesses and industries are being run on software and delivered as online services — from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures.” – From “Why Software Is Eating the World” by Marc Andreessen, founder of Netscape Communications
If Andreessen, the legendary Internet pioneer, is correct, big software companies should be worried. Very worried. Fortunately, Wipro has a solution. The service provider is expanding beyond outsourcing into leveraged engineering, which helps software companies, especially large enterprises, cash in on the early mover advantage. “The goal is to become co-creators with our clients by leveraging our engineering capabilities to accelerate their time-to-market cycle,” says K D Singh, global head of the ISV (independent software vendor) business for Wipro.
Four megatrends are shortening product lifecycles in the software world, he observes. Software as a service (SaaS) and the cloud, mobility, analytics and social media are coming together in a perfect storm of change. “These megatrends can build or hurt an enterprise. Everyone is impacted,” he emphasizes.
KD, who is also accountable for mega-accounts Microsoft and HP, says these trends are creating “a race to innovate.” He points out the first three to enter a new market typically bank up to 80 percent of the lifetime profit from that new product.
Innovation, however, is much easier for supple start-ups than large, lumbering corporations. “Large companies are forced to play catch up,” he says. But is catch up good enough? KD muses. “We see a lot of big companies struggling both with the stock market and their own customers,” he says. He points out mobility as an example. Who heard of HTC phones three years ago?
Two kinds of innovation
SaaS: In the SaaS world, the Wipro executive says large companies must make a “cultural shift.” Currently they sell their software license. Now, they will have to move to a subscription model. They have to rearchitect to create a multi-tenancy environment for their products. They must upgrade their infrastructure. And they have to create new billing and licensing systems that reflect the new way of doing business.
Large companies also will have to build a different level of competency in the non-SaaS world, according to KD. For example, a CRM company will have to build a new module that processes all the social media references for a company so the software can report the latest trends on customer impressions. This feedback is invaluable when launching new products “because you can tell quickly if it will be a success or a dud,” says KD.
Today, many companies hire a research firm to do this social media analysis and reporting, which they do manually. But software, using search technology, can produce reports quickly.
The ISV challenge
“Most ISVs don’t have all the expertise” for what’s needed. They must be able to complete major metamorphosis of their business operations, he suggests. They are experts at solving problems through software. Understanding the new business and the cultural change that accompanies it is different. “They have to learn how to connect the dots if they are going to stay current,” KD says.
These companies also probably don’t have a competency in new areas like social media or big data, or in new paradigms of continuous delivery of the software versus shipping it.. “We help them in areas where they would have to play catch-up. Wipro becomes the catch-up engine,” the executive explains.
To solve this business conundrum, Wipro has created Product Engineering, which marries technology advances with new business models to help ISVs shift rapidly to leveraged innovation. “The targeted outcome is to accelerate engineering for current product development to achieve faster time-to-market, which will create profitable revenue models,” KD explains.
Product Engineering starts with business advisory services. Wipro experts help software companies answer questions like:
- What is the appropriate pricing?
- What are successful sales models?
- How do you shift from the physical to the digital?
- How do you cope with the shrinking life cycle?
- How do you make the product cloud ready and multi-tenant?
- How do you manage operations for continuous delivery?
- How do you ensure the data is secure?
- How can you provide actionable intelligence to your clients by better analyzing available data?
- How do you leverage social media and mobility?
“These changes have tremendous implications,” says KD.
Once the software company understands the new business model, Wipro helps its executives put together an action plan and educate their teams. “We then help them build a revenue system around the new model,” KD adds. “We can build, deploy and manage their infrastructure for SaaS products on a public or private cloud environment.”
Wipro becomes “their technology partner at all levels.” The ISV can use its own technology or one Wipro recommends.
Singh says cost savings originally motivated outsourcing. Outcomes, however, are what Product Engineering produces. And that’s exactly what today’s ISVs need.