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Spotlight
Infotainment and connectivity—new growth mantras
Always known for its product design capabilities, Tata Elxsi
is about to tap opportunities in the infotainment and connectivity domains,
says Vinutha V.
"The buying power of end-customers has increased exponentially in
infotainment and connectivity "
- Madhukar Dev
Managing Director
Tata Elxsi. |
Prior to liberalisation in the late 80s, it was impossible
to import a computer system and the waiting period for the same was of 18 months.
The import duty was high. Sensing an opportunity in this adversity Tata Elxsi
was incorporated in 1991. The primary intention was of starting a mainframe
computer manufacturing company in India. The company had an R&D division.
After liberalisation, duties fell and the prices of mainframe made in India
was equal to that of the imported hardware. Undaunted, Tata Elxsi shifted gears
and began offering software and electronics designs to mainframe and storage
companies. As the mainframe technology declined in popularity, the company’s
software and hardware design capabilities helped it sustain itself. “We
had the design skills that we could utilise in core technology. The proliferation
of technology posed a challenge. Directing innovation was an additional obstacle.
To diversify into new areas was not easy. However, we identified the embedded
space as an area where we could potentially leverage our strengths,” says
Madhukar Dev, Managing Director of Tata Elxsi.
Diversified businesses
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The automotive industry in India is witnessing a boom
and as a result, several MNCs are setting up R&D centres in the country
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In 1994, the embedded product design division was launched.In
the following years the company continued with the diversification. Today it
operates in the areas of software development and services as well as in the
system integration (SI). Under the banner of software development and services,
it offers Product Design Services (PDS), Design and Engineering Services (DES)
and Visual Computing Labs (VCL). The PDS designs technology products, both hardware
and software, catering to the manufacturers of automobiles, consumer products,
semiconductors, media, storage and scientific equipment. It has been offering
life-cycle product design services to customers across the world.
The DES team provides integrated mechanical design solutions
that give shape to products. Set up in 2002, the VCL business group creates
content and special effects for Bollywood and Hollywood. Through system integration,
Tata Elxsi sets up design environment for customers in automotive and R&D.
This division addresses a spectrum of requirements including facilities management,
network management, storage consultancy and management, system administration,
security consultancy and management and overseas support and services.
The Professional Services Group (PSG), a part of the SI services division, implements
applications such as data mining, manages IT Infrastructure and ensures uninterrupted
workflow across systems and organisations.
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Tata Industries holds a 38 percent stake in Tata
Elxsi and the public holds the rest. From 200 people in 1997 it has grown
to 1,800 people. The majority of the workforce of 1,500 is employed in
PDS and the rest are divided in DES, VCL and other units. Tata Elxsi has
development centres in Bangalore Chennai and Thiruvananthapuram and production
studios in Mumbai. The company’s revenues grew by 21 percent to Rs
185.77 crore in FY 2004-05. Its operations span the US, Europe, China
and Japan.
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New growth areas
In the past, the company has reworked its strategy every six months and this
has helped it stay on top. Technology, infrastructure and related investments
have always been the focus. The company’s clientele includes the likes
of Tata Motors, Bajaj, Toyota, MSN Messenger, Pepsi Foods, Oscar Films and Digimation.
Tata Elxsi has recognised infotainment and connectivity as
its future growth areas. “The buying power of end-customers has increased
exponentially in infotainment and connectivity. Therefore, we are planning to
focus on WiMAX, IP TV and digital terrestrial broadcasting,” adds Dev.
The FMCG industry has begun to invest a lot in product packaging aspects. Product
differentiation between competitors and segment differential within a single
brand has triggered the investment in product packaging. Tata Elxsi is eyeing
this opportunity and aims at serving both Indian and overseas markets. As the
company understands the mindset of the Asian market, several MNCs in the FMCG
domain have approached Tata Elxsi for its design capabilities.
Industrial design for the world
The SI services division of Tata Elxsi caters exclusively to the Indian customers
and is expected to grow faster than the rest of the company. The automotive
industry in India is witnessing a boom and as a result, several MNCs are setting
up R&D centres in the country.
Similarly, the use of special effects and animation in Bollywood is on the rise.
VCL has undertaken a few projects in the past for big-budget Bollywood films
such as Kal Ho Na Ho, Hum Tum, Dhoom, Veer-Zaara, Swades and Netaji. Today,
it is geared to work with Hollywood and cartoon channels. The growth of Indian
advertising is also an opportunity for VCL to offer its capabilities for TV
commercials. The UK, Italy and Japan have always dominated the automotive industry
in terms of industrial design. This is becoming an area of growth for India
as well. The company has plans to focus on new markets such as South Korea.
“Earlier, India was not in the picture when it came to industrial design,
especially in the areas of automotive styling and ergonomics. We want to bridge
that gap,” concludes Dev.
vinutha@expresscomputeronline.com
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