3 Trends That Have Changed The Product Development Scenario Rajagopal Nagarajan, Vice President, R&D Services MindTree Limited July 7, 2008

Agenda Changing product development environment Trend 1: De-verticalization and its journey De-verticalization - What it means to a typical router company Trend 2: Commoditization Trend 2: Commoditization – What it means to a product company Trend 3: Open source

Changing product development environment

Trend 1: De-verticalization and its journey

De-verticalization - What it means to a typical router company

Trend 2: Commoditization

Trend 2: Commoditization – What it means to a product company

Trend 3: Open source

Changing product development environment Pressure to reduce the time to market Shortened development life cycles Fight to stay competitive De-verticalization Commoditization Open source Product Development Environment Emerging Trends Current Scenario

Trend 1: De-verticalization and its journey Before 1990’s During the 1990s 2003 onwards Vertically integrated companies. . The focus was on control of all aspects of development and doing everything in-house. Outsourcing takes pace.. Companies started focusing on their core competencies and outsourcing other activities. Arrival of De-verticalization.. Companies are building products by sourcing all key components from the market and differentiating their products by applications and support.

De-verticalization - What it means to a typical router company Hardware work, due to ATCA, has seen standardized line cards reduce compliance needs Availability of tested third-party protocol components has encouraged the need to support only IP protocols As the product is built with already tested components sourced from the outside, the testing effort is less Product companies are beginning to innovate at the service or application levels.

Hardware work, due to ATCA, has seen standardized line cards reduce compliance needs

Availability of tested third-party protocol components has encouraged the need to support only IP protocols

As the product is built with already tested components sourced from the outside, the testing effort is less

Trend 2: Commoditization Commoditization is an event that will come uninvited to all successful industries eventually Wikipedia defines commoditization as a process that transforms the market for a unique, branded product into a market based on undifferentiated price competition Competitors are willing to offer a “good enough” product at a lower price to compensate for a lesser known brand or product support infrastructure of the incumbents

Commoditization is an event that will come uninvited to all successful industries eventually

Wikipedia defines commoditization as a process that transforms the market for a unique, branded product into a market based on undifferentiated price competition

Competitors are willing to offer a “good enough” product at a lower price to compensate for a lesser known brand or product support infrastructure of the incumbents

Trend 2: Commoditization – What it means to a product company Immense pressure on product vendors to reduce the time to market Engineering work in such companies is more of porting, integration, and testing of the end product The key engineering experience needed in such companies is integration and knowledge of key components and not in-depth understanding of all components Because of commoditization, one should be able to build software for a consumer device by picking and connecting components and developing glue logic if and where needed.

Immense pressure on product vendors to reduce the time to market

Engineering work in such companies is more of porting, integration, and testing of the end product

The key engineering experience needed in such companies is integration and knowledge of key components and not in-depth understanding of all components

Trend 3: Open source Much has been said on open source - support is likely to be better in the case of complex issues. Customization is also possible to meet specific needs. And, as no royalties are to be paid for such software, it reduces the entry barrier to a technology.

Much has been said on open source - support is likely to be better in the case of complex issues.

Customization is also possible to meet specific needs.

And, as no royalties are to be paid for such software, it reduces the entry barrier to a technology.

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