Although Indian and Chinese companies are expected to compete fiercely in the global software services market, the Hong Kong-based chinadotcom, which offers technology, marketing and media services, and Bangalore-based vMoksha Technologies, have decided there is an advantage in co-operating.
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 US, Europe and the Asia-Pacific region.
Chinadotcom will hold a 51 per cent stake in the as yet unnamed venture, with vMoksha holding the balance.
"We have decided to collaborate rather than compete," chairman of vMoksha, Pawan Kumar, said. "The joint venture will do joint marketing, and leverage the offshore development centers of both companies."
It would also allow 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 centres 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," managing director of CDC Outsourcing, Herman Cheng, said. "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 was likely to give customers a choice of location, languages, and skill sets, particularly at a time when customers were concerned about the disaster recovery plans of software services suppliers, according to analysts.
The range of services currently offered by vMoksha and CDC Outsourcing were complementary, Kumar said.
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 was 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 recognised 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 would go to market jointly, the venture did not preclude vMoksha and CDC Outsourcing from bagging and implementing orders independently of each other, Kumar said.