Indian, Chinese companies team on outsourcing

Although Indian and Chinese companies are expected to compete fiercely in the global software services market, chinadotcom Corp., which offers technology, marketing and media services, and is based in Hong Kong, and vMoksha Technologies, an IT services company in Bangalore decided there is an advantage in cooperating.

CDC Outsourcing, an outsourcing unit of chinadotcom, and vMoksha are planning to set up a joint venture to address the IT services markets in the U.S., Europe and the Asia-Pacific region. Chinadotcom will hold a 51 percent stake in the as yet unnamed venture, with vMoksha holding the balance.

“We have decided to collaborate rather than compete,” said Pawan Kumar, chairman of vMoksha. “The joint venture will do joint marketing, and leverage the offshore development centers of both companies.” It will also enable vMoksha to enter the Chinese market with its services, Kumar said.

While CDC Outsourcing has a development center in Shanghai, vMoksha has a development center in Bangalore. The joint venture and its offices are likely to be located close to the customers, as its primary function will be sales and marketing, with software development and services taken care of by the offshore development centers of the two companies.

“This JV is designed to provide a solid outsourcing platform in the future for our existing and new global clients who can fully utilize our expanded offshore outsourcing capability,” said Herman Cheng, managing director of CDC Outsourcing. “Our clients will continue to be able to work with the local offices while having increased confidence that their projects will be completed with higher quality, lower cost and greater transparency.”

The tie-up between the two companies is likely to give customers a choice of location, languages, and skill sets, particularly at a time when customers are concerned about the disaster recovery plans of software services suppliers, according to analysts.

The range of services currently offered by vMoksha and CDC Outsourcing are complementary, according to Kumar. While vMoksha does product development and engineering, and remote support for customers in the retail, distribution, health care, banking and financial services segments, CDC Outsourcing is primarily into Web services and portal management, he said.

In the first phase, design, analysis and architecture work will be done by vMoksha at its Bangalore facility, with coding done by CDC Outsourcing’s center in Shanghai. ” It is recognized by both sides that India is more advanced in software development and services, so some of the high-end work will get done by vMoksha,” Kumar said.

Although both companies will go to market jointly, the venture does not preclude vMoksha and CDC Outsourcing from bagging and implementing orders independently of each other, Kumar said.