Digital disruption is not boardroom banter for Sasken Technologies, the Bangalore-based BSE- and NSE-listed company that changed its name in February, 2017 for the second time since its inception.
The first revamp took place in 2000, when the company had changed its name from Silicon Automation Systems to Sasken Communication Technologies to focus on communication. And now it has become Sasken Technologies, with newly defined focus.
It was a rough ride for Sasken for a while. Telecom consolidations and traditional IT industry’s sluggish growth didn’t help. This changed in 2014, when the company focused its capabilities on automotive, industrial and retail sectors backed by domain expertise.
“IT services is a very huge market. Product engineering outsourcing market is not that huge. So it’s very difficult for an IT services company to look at product engineering and say, let me play in the growth there. It’s not going to solve your problem, your huge drop in revenue by coming in here.”
Sasken has again changed its strategy with a strong focus on cognitive science, industrial automation and smart solutions. CIO India spoke to Hari Haran, President of Global Sales, Marketing and Business Lines at Sasken Technologies to figure out their recipe for change to survive in the current disruptive scenario.
Why the change in strategy, and how has the transition been?
The company has always been focused on semiconductors, but the idea is how do we leverage that to go to high-growth areas like automotive, industrial IoT (IIoT), communications and devices. The disruptions are happening because of substantive advances in semiconductors, artificial intelligence (AI) and big data. There are tremendous opportunities in the market.
For the last three years, we’ve seen consistent growth. The challenge now is to accelerate it because the disruptions are profound. For instance, the cellular vehicle-to-everything (C-V2X) technology in automotive is a completely disruptive way where the infrastructure inside the car can communicate with basically anything – another car, stop light or a fire hydrant.
This is not science fiction, we are actually working with semiconductor and auto companies on this. This is not only going to improve the safety aspect; think about the kind of business models that emerge out of it because your car is constantly communicating on the road to things that are on the road.
All the data that gets generated and the insights that can be pulled out of it – these are the kind of disruptions happening, and we are playing right into it.
Industry 4.0 is on everyone’s agenda from govt. to tech companies. But can it be a success in India like it has been in Germany?
Sasken Technologies’ focus areas
· Industrial IoT
· Cognitive: Field service, remote diagnostics, predictive maintenance
First step in any industrial 4.0 thing is readiness in terms of semiconductor infrastructure, and readiness in terms of communications infrastructure. Which India is, as wireless technology is there. 100 percent of India doesn’t have 4G, but 3G is there.
So the semiconductor ecosystem, and communications networking infrastructure are important. And finally software. India has that too; India is the one that makes most of it for other companies. Fundamentally, what it boils down to is the semiconductor infrastructure.
The semiconductor technology is there – why isn’t it all pervasive in India? It’s a cost point. If it’s expensive, then people don’t see the value; but that’s changing. Some of the semiconductor companies are making substantive investments in India for various programs like Make in India. They are putting together licensing packages affordable for India.
I have a feeling that there will be government subsidies as well. I’m pretty sure industry 4.0 will be big in India. If China, being a much larger country, could have done it, it’s doable for India too.
Where do Indian companies stand when it comes to security? Is it an added feature or part of design systems now?
Security has started filtering into the systems now. Most of the Indian giants—any big machinery company –are very tuned with the technology their competitor in America or Europe is deploying.
For much of the work we do in industry 4.0, security is incorporated into it with identity management, assigning proxies, checks and balances. Whatever we do – those type of frameworks are used for every client. Security is not an issue for big companies in India, because it doesn’t cost anything extra. It’s the frameworks you incorporate. Whether you do it here or in Japan, you would incorporate that anyway.
Tech development is an extremely competitive space with M&A leading to situations where smaller companies are acquired by giants that already have in-house tech. Where does Sasken stand in such a scenario?
“The semiconductor tech is there – why isn’t it all pervasive in India? It’s a cost point. If it’s expensive, then people don’t see the value; but that’s changing. Some of the semiconductor companies are making substantive investments in India for various programs like Make in India. They are putting together licensing packages affordable for India.”
Most of our clients have a large R&D force inside. It’s not that they don’t know how to do what we’re doing. It’s the fact that they don’t have the bandwidth, or they have heavy constraints on time-to-market. It forces them to look outside.
Companies get bigger but they all get into the same constraint and they are never satisfied. That’s why outsourcing happens, and it will continue to happen. It will grow substantively in engineering industry.
There are big changes happening in the IT/ITeS industry in India. Where does this space stand for Sasken?
We will stay far away from the IT industry. Primarily, it was a people oriented business. Unfortunately or fortunately it is becoming a machine oriented business. Traditional IT and Business Process Management or BPO industry is in turmoil.
We are in the product engineering space, very focused on a certain set of verticals where there are positive disruptions and growth happening.
IT services market is a very huge market. Product engineering outsourcing market is not that huge. So it’s very difficult for an IT services company to look at product engineering and say, let me go and play in the growth there. It’s not going to solve their problem, their huge drop in revenue, by coming in here.
There is one area of IT— digital transformation, the cognitive part— which has opportunities. But we are not even going there. There is enough cognitive opportunities right where we are operating. We’ve carved out our space and we are going to stay here.