Outsourcing: Sanjay Dhawan, CEO of Symphony Services (Part 2)

Sramana Mitra: Let me ask my question again now that you’ve provided context that would be helpful for our readers about what you do. Let’s say Salesforce.com or IBM or a company like that is trying to make a decision about what are they going to build in-house and what are they going to outsource to an OPD (outsourced product development) player. How do they make that assessment, and what have you learned in your business with them?

Sanjay Dhawan: Different customers will have different requirements from time to time. Many larger companies, you used IBM or some other larger companies as an example, what we have learned is if we are engaging with larger ISVs, they would make the decision based on certain strategic products. They would keep it in-house with their own in-house teams and outsource more sustenance and maintenance of certain products, which still need – if I may use the term – cloudification, mobilization or other enhancements, they would engage with companies like us.

Having said that, if you go tier two, tier three types of ISVs, as they get smaller in size, they would be making decisions based on core competencies. Chances  are, they may not have certain required core competencies, because they are smaller in size. They would even engage with us with strategic products to do that.

SM: To summarize, the larger companies are giving you somewhat non-strategic products, whereas the mid-sized ISVs are sometimes giving you even strategic products because of their lack of expertise in aspects of those products.

SD: Right. That would be a general rule. Having said that, there are exceptions, obviously. There will be cases, even for larger companies, we will engage on the strategic side, and vice versa. But by and large, what I said is true, where the larger companies will typically engage us more in the mainstream products, and the smaller companies will engage based on core competencies that may not have enhanced strategic products with us.

SM: Got it. What other trends are you seeing in the industry that have affected your business over the last decade? Ten years is a fair bit of time. There’s, obviously, the SaaS trend. There’s a mobile trend. Definitely, outsourcing as a trend has really taken off. In the 90s, if, let’s say, a small startup software company went to a venture capitalist and told him that they’re outsourcing their product development, they would say, no, thank you, that’s not acceptable. That changed dramatically in the 2000 decade when VCs started asking the entrepreneurs, what is your software outsourcing strategy? How do you take advantage of an offshore cost structure to make the business building more capital efficient? That was a marked change in that industry over the last 10 years.

SD: Right. Absolutely. The only part of our business, the first five years, first seven years was basically built on that, which was riding the cost curve and the advantages that come with outsourcing. All of us would want to do more, stretch our dollars. There is more demand on capacity when it comes to features and so on and so forth. As you and I both know, software is getting more complex, not simple. Hence, you want to figure out how you want to take your R&D budget and be able to fit more features, more capabilities around it. Outsourcing was one way of packing in more for your dollars. The thing that made us fairly unique was, since we’re so specialized as a company in product development, we came up with this model of an outcome certainty. With that I mean we would engage with our customers and them some basic questions as to what are their objectives with regards to what outcome they wanted at the end of the day. Did they want pure cost advantage? Or did they want to improve quality? Or did they want to reduce time to market, and so on?

Based on whatever their key outcome requirements were, we would structure an engagement model which would support that. We’re putting our skin in the game with our customers around the outcome that’s important to them. And that also made us unique in what we do for our customers.

This segment is part 2 in the series : Outsourcing: Sanjay Dhawan, CEO of Symphony Services
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