Adaptec is transferring its product development center in India to outsourcer HCL Technologies, in a bid to make the operation more cost-efficient and also to have quick access to more staff when required.
Under an agreement announced Thursday, HCL is setting up an ODC (offshore development center) for Adaptec. The U.S. company will have full ownership of intellectual property developed by the center.
"We were limited in the work we could do by the number of engineers we had at our center," said Suresh Panikar, director of worldwide marketing at Adaptec. The arrangement with HCL will enable Adaptec to pull in staff on demand from HCL, he said.
Panikar, however, clarified that the model of outsourced product development was only being tried in India. Adaptec runs its own product development centers in Germany and the U.S..
HCL has worked previously for Adaptec on engineering projects. It will now continue the work Adaptec's India Technology Center (ITC) in Bangalore has been doing in the area of RAID (redundant array of independent disks) controllers. HCL will also work down the line on new product areas identified by Adaptec, Panikar said.
About 50 staff from the ITC have been transferred to HCL. While for the time being the team will operate out of the same facility, a decision will be made later on whether they should be moved to an HCL facility in the city. Staff from the ITC who are transferred to HCL will continue to work exclusively on Adaptec engineering projects.
A number of multinational companies with development subsidiaries in India will find it more cost-effective to transfer these operations and outsource the work to third-party contractors, according to Forrester Research. Besides spreading fixed costs over multiple clients, outsourcers are also better able to hire and retain staff and provide them career growth paths, Forrester said.
Many companies like Microsoft and Cisco use a hybrid model where critical development work is done at the subsidiaries, while other work is contracted to Indian outsourcers.