Can we build IP-based Product Businesses from India?

My interest in knowledge management has always been from the perspective of knowledge creation. So, I readily agreed to participate in the CII Knowledge Management Summit this year in a session that focused on this dimension. Ganesh Natarajan, Sharad Sharma and I were together on a panel to explore the potential of, and challenges in, the creation of intellectual property (IP)-based businesses from India.
I began my talk with a historical perspective. For the first four decades after independence, India tried to build core industrial capabilities. The focus was on understanding, assimilating and improving on manufacturing processes. It’s only in the last two decades that we have seen some momentum building up in the arena of new product development.

IP-based Successes from India: Bajaj, Vigyanlabs, Praj & NCL

We have several examples of this trend. My favourite one is of Bajaj Auto. As a scooter maker, Bajaj restricted itself to making cosmetic changes to the Chetak. But after it entered the much more competitive motorcycle space, it came up against powerful competitors like Honda (at that time in the Hero Honda JV). After several unsuccessful attempts to adapt Kawasaki’s bikes to the Indian market, Bajaj was finally successful when it developed and launched the Pulsar around 2001. The Pulsar offered power and style at a reasonable price and operating cost to a new young generation of bike riders who wanted something more than the efficiency of Hero Honda’s Splendor. At the heart of the Pulsar’s engine, was Digital Twin Spark Ignition (DTSi) technology, a patented method of overcoming the traditional trade-off between power and fuel-efficiency. The DTSi patent itself has been the subject of litigation over questions of novelty and non-obviousness, but the Bajaj Pulsar is certainly a landmark in terms of a successful Indian product riding on IP covered by a patent.

In some of my earlier posts, I wrote about other companies that are doing a good job of IP-based innovation. Vigyanlabs, winner of the 2013 Nasscom award for technology innovation, has a novel solution to reduce power consumption in data centers – the core of this is covered by a US patent. Praj Industries started by developing improved continuous process technologies for fermentation of cane molasses, but is today doing research at the molecular level so that it can convert different types of waste into next generation biofuels. Praj already has patents covering processes to produce ethanol from lignocellulosic material, and I presume more patent applications will follow.

Our public research institutions have also been successful in creating core IP that is at the heart of commercial products. To give just one example, Dr. Sivaram and his team at the National Chemical Laboratory (NCL) created a microencapsulation technology covered by 6 US patents that is today being used by Procter & Gamble in their high end Downy fabric softeners for controlled release of perfume that lasts many days after the clothes have been washed.

Yet, Challenges Remain…

I recently met Anjan Mukherjee, co-founder of HyCa Technologies. HyCa has been a pioneer in the development of hydrodynamic cavitation, a technology that has applications in areas as diverse as treatment of effluents and ballast water. Anjan and his team have won several awards, and been invited as guests of different countries. But, commercialization on a big enough scale has eluded HyCa so far. One of the main reasons for this is the absence of an effective public procurement system for new technologies. While in most countries public procurement helps in certifying and establishing locally-developed technologies, in India the rules of public procurement are loaded against the purchase of novel technologies developed in India.

The Indian pharmaceutical industry graphically portrays some of the other challenges in building IP-based product businesses from India. While the leading Indian pharmaceutical companies were already strong in process innovation, they invested in new drug development when India decided to sign the GATT/WTO agreement in the mid-1990s. But, after some early success in out-licensing molecules at early stages of the drug development process, they have found the big wins hard to come by. As a result, some of them either sold out or cut back on new drug development.
Why is it so tough to develop new drugs out of India? The combination of large upfront investments, a long gestation period (trials and approval can take 10+ years) and uncertain outcomes (a drug can fail in advanced trials, rendering several years of effort infructuous) make drug development challenging anywhere. But, in India, this is compounded by the absence of knowledgeable and patient capital, and a lack of deep expertise in biotechnology and disease mechanisms. Recent curbs on clinical trials in India have made the trial process more expensive and cumbersome. Local regulators lack the sophistication and expertise to make a rigorous assessment of a new drug. IP protection is also an issue with Indian IP laws perceived as being against new drug development.

Many Challenges are Ubiquitous

But, in fairness to the Indian environment, some challenges in IP-based product development exist everywhere. Even in the US, the assumed Shangri La for new product development. I often relate the story of Robert Kearns, who invented the first intermittent windshield wiper. He applied for a patent, and then offered his technology to the automotive majors. They didn’t license his technology, but introduced similar products of their own some years later. Kearns sued Ford and Chrysler, but won a pyrrhic victory– by the time he won in the courts, he suffered several personal losses. If this David vs. Goliath battle can play out in the US, one can only imagine the challenges of defending one’s patents in India.

Apart from the IP itself, there is the importance of the possession of complementary assets in getting value out of IP. In many industries including biotech-based Pharma, in order to make money you need to have a good understanding of the regulatory process, staying power and resources to complete trials and the ability to market your product if you want to capture a major part of the value created by your IP.


India has the potential to build IP-based, product businesses. We have people with ideas, in many areas we have people who have gained deep expertise, and access to funding is improving.

But there are serious weaknesses as well including the absence of support from public procurement, regulatory gaps, absence of specialised funders, and shortages of talent, and infrastructure that can be used on a shared, chargeable basis.

The keys to success include the ability to stay the course (for a much longer time than in developed markets), internationalization, and getting the business/commercialization model right. I can’t over-emphasize the internationalization dimension – other countries can be much more accepting of new, cutting-edge technologies; you get a large enough market to amortise the cost of your development; and Indian customers are more positive once you have proven yourself elsewhere.

The march of the product brigade!

For the last fifteen years and more, there has rarely been a meeting of visionaries and practitioners in the IT industry where somebody does not offer the view that the days of IT services are nearing an end and the product movement will create new heroes for the industry and country.  In each of those fifteen years, the gap between the revenues of the services firms and product pioneers has only widened and a cynic might be pardoned for asking “Is it really worth our while to obsess about products when the services sector continues to do well and find newer and newer avenues and models for growth?”

The truth is that the success of  product ventures is an idea which has been slow in developing but whose time has now surely come. Many successful Product Conferences conducted by NASSCOM in Bengaluru and led by the passionate  Sharad Sharma and his band of merry evangelists, the iSPIRT and ProductNation initiatives of the product group championed by former NASSCOM stalwart Avinash Raghava, the very successful Knowledge Management and Intellectual Property movement led by the Confederation of Indian Industry and the huge deals flows seen from product wannabes for funding by the Indian Angel Network all point to a renewed surge of enthusiasm for a “Made in India” wave that will sweep the industry forward and unleash a tsunami of success for many young entrepreneurs.

However there is no case for a simplistic polarization between services and product companies and there is certainly no basis for the argument that IT services firms will decline and give way to product firms. Even five years ago, when we had postulated that the industry would grow to a three hundred billion dollar level by 2020, the canvas was painted in many colours – on-premise and cloud based services, new platforms and frameworks, accelerators and shrink wrapped and embedded products. The boundaries are blurring and most of us in services have embraced IP creation as a necessary part of all our vertical solutions. At Zensar we have built a compelling “Digital Enterprise” strategy that leads our clients from systems of record through the wonderland of Cloud, Mobility, Social Media and Analytics to true systems of engagement. This strategy is delivered through an eco-system of product partners who have focused point solutions for vertical and horizontal engagement. The day is not far when all services firms will attempt to garner over thirty percent of their revenues from systems integration and carry a cohort of product partners into new markets.

This is not to say the product companies cannot succeed on their own steam. On the contrary, there is a strong sense of self-belief in the new generation of product entrepreneurs in our country even as some of the global product majors are beginning to consider themselves as services companies. A forthcoming CII Knowledge Management conference will showcase small companies in India that can provide worthy solutions that push the frontiers of knowledge, for organisations in all user domains and as well as technology savvy services organisations. A revolution is in the making in this country and the march of the product brigade will lead this revolution !

Are you a #MadeInIndia Software product company with solution built on SMAC stack that sells to Enterprise segment?

If yes here is a great not-to-be-missed opportunity for you to explore partnership with Zensar Technologies….then Read on.

Zensar Technologies is a technology partner of choice for global organizations looking to strategically transform, grow, and lead in today’s challenging business environment. ProductNation is pleased to partner with Zensar to make this opportunity available for Indian Product Startups. Zensar is looking at hungry, innovative product startups that have built exciting products based on SMAC(Social, Mobile, Analytics & Cloud) technologies from India and showcase them to their Leadership Team, with a goal of offering these innovative products for their existing customers, prospects and partners

Details of Zensar TechShowcase are as follows: Date: 7th September 2013 (Tentative), Location: Pune

  • Format 40 minute slot, with 20 minutes of demo cum presentation, followed by 20 minutes Q&A session for about 12 companies. Expected to be a full day event.
  • Audience – Leadership Team of Zensar and Key Vertical heads.
    • Areas where the Zensar is looking for Products – Mobile Solutions, Mobile Analytics, Device Management, Social networking, Web 2.0, Application Integration, Intelligent Customer Interaction Solution, partner interactions, and internal business processes. If you have an area which is not listed here, please do send us an email at showcase(at)

What you get? An opportunity to showcase your product to one of the leading technology companies which has customers across the globe. More details can be found at

  • An opportunity to get feedback about your product from the team that engages with enterprise buyer community, giving you great inputs for your future engineering and design decisions
  • An opportunity to partner and take your product to international markets. And all this with no sales qualification cost!

Interested? Great. Here is how you can participate:

  1. Provide the information desired in the online form by 20th August 2013(Now extended to 23rd August 2013). Completed submissions will be sent to the Zensar for short-listing and selection by 30th August 2013
  2. A selection committee will peruse the submissions, and based on their need and interest, will shortlist a set of 10 to 12 companies, and invite them to be present at the  Zensar TechShowcase Event, on 7th September 2013
  3. All expenses for the participating in this event will be done by the participants themselves. Zensar will provide the venue, and the audience.
  4. There are no participation charges for this event.
  5. If you have already provided information about your product for the ProductNation OutSights, please do send us an email at [email protected]

If you have any questions, please write to us at us at [email protected] and we shall try to answer them.