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12/8/2009
01:25 PM
Rajan Chandras
Rajan Chandras
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Pervasive Software Experiments Offshore

Data integration leader Pervasive has been experimenting with the offshore model for some years now. The Pervasive experience is slowly turning into a business case study, particularly for companies looking at setting up captive offshore development centers.

Data integration leader Pervasive has been experimenting with the offshore model for some years now. The Pervasive experience is slowly turning into a business case study, particularly for companies looking at setting up captive offshore development centers.

Browsing the local papers during my trip to India last week, I came across a news item (based on a PR release) about Pervasive that caught my attention. Pervasive has partnered with a US-based firm (but having Indian roots & operations) to market and deliver data integration solutions in India. That's a smart move -- clients will be much more inclined to consider Pervasive solutions if there's someone local they can rely on for support. Also, India is rapidly growing market; the Indian economy grew at 7.9 percent annually last quarter -- no small accomplishment in a tough worldwide recession -- and is expected to grow at upwards of 10 percent next year.What makes this move by Pervasive more interesting, though, is that it's part of a dance that Pervasive's been having in India since a few years ago -- two steps forward, one step back, one step forward and to the side, and so on. Following the rush towards (perceived) savings through offshore development, Pervasive set up operations in India in 2004. Now, if you want to develop your product (or parts thereof) in India, or any offshore destination, you basically have two options: (a) outsource the work to a local partner, or (b) go it alone. Pervasive chose the latter option, and set up what's called in industry parlance as an "offshore development center (ODC)" in Bangalore.

In no more than two years, Pervasive found it rough going, and chose to back out of the situation by shutting down the ODC. Pervasive President and CEO John Farr is said to have found that the potential cost savings of an ODC can be "mathematically compelling", but the complexity and cost of managing the operations and ensuring staff continuity can be quite a challenge. Pervasive hasn't moved out bag and baggage, though; it is now working through a local partner... option (a) above.

There is no shame to Pervasive in this move: others, including Apple, have found that the ground reality can be different from early projections. Smart business (and businessmen) continue to learn and continue to evolve business strategies -- there is no such thing as a static business environment or one-approach-fits-all strategy.

For product vendors looking to leverage global labor, here are a few tips.

  • Choose the offshore location carefully. Considerations include quality and availability of personnel, infrastructure facilities, logistical challenges, and long-term operational complexities.

  • Consider the long-term implications here at home. How will the management org chart look after introducing an offshore component of the organization? How to ensure that the offshore branch gets the nourishment it needs over time? How do we ensure that the operational seams do not get stretched and come apart over time?

  • Focus on skills retention. The preferred employee profile for an ODC can be very different from that for an outsourced development project -- understanding this difference can be crucial in finding (and hence being able to retain) the right talent.

  • Consider the options carefully. Going it alone might provide some kinds of reassurance (e.g. maintaining the sanctity and security of the source code), but has an entirely different set of challenges (not unlike setting up a whole new car manufacturing plant vs. using existing production facilities from another manufacturer). There are many offshore firms that specialize in partnering with product vendors -- due diligence and an open partnership will go a long way in ensuring success through partnering.
Data integration leader Pervasive has been experimenting with the offshore model for some years now. The Pervasive experience is slowly turning into a business case study, particularly for companies looking at setting up captive offshore development centers.

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