Confidential © 2004 Sierra Atlantic, Inc.

Early stage offshore R&D

BITSAA-CEL

Raju Reddy

March 24, 2007

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Sierra Atlantic At a Glance

• 1200 employees worldwide and growing• Best in Class Global IT services• Rich history of R&D partnerships with Enterprise

Software companies• Deep Integration & Product development expertise• Process and Methodologies

– CMM Level 5– SAS70 & BS7799 Certified– NShore™ Methodology

• “Top 20 IT companies” to work for in India

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Leadership Team

Sarath SuraGlobal Services

Brian RoganSVP Marketing

Bob HershCFO

Raju ReddyFounder & CEO

GK MurthySVP Enterprise

Solutions

Sanjay JesraniVP Operations,

Hyderabad Center

Feroze MohammadSVP Integration

Solutions & Products

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Offshore R&D: Market Trends

• It is for real and a high growth segment– “Offshore product development has arrived”:

Forrester Research

• VC’s increasingly expect offshore R&D for portfolio companies

• Specialized service vendors emerging– Captive center is not a universal answer

• India is not the only option– China & Eastern Europe growing rapidly

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FY 2001

FY 2005 Source: Nasscom

US$3.1B

Offshore R&D spending in India

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Benefits

• Get more done with less– 50% cost savings

• Scalability• Access to potential new markets

– India and China becoming attractive even for startups

• Growing ecosystem of partner companies are now offshore

• Process maturity– Especially when you outsource to reputed vendors

• Helps build a “global mindset” in company from day one

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Challenges

• Communication– Some prefer doing offshore R&D after Release 1.0– Product Marketing needs to be in close contact

with engineering in early stages

• Management Overhead– Most underestimate the effort

• Attrition & cost escalation– Especially in India

• IP protection– Perhaps more perceived than real

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In Closing ….

• Offshore R&D is here to stay

• Your company/product success ultimately depends on factors other than Offshore R&D