February 17th, 2003 - Tata Elxsi has chosen to plod its way to revenue growth. While most software service providers are widening their portfolio of offerings to speed earnings, Tata Elxsi has narrowed it’s. The company’s concentration is on specialized segments, which promises generous returns, in the long term.
Its entry in the computer animation space being an example. Mediaworks, the service arm set up to develop special effects and animation for feature films and advertisements is warming up to compete for significant deals in the computer graphics space.
Likewise, the new corporate positioning based on design is conveying its seriousness and strong capability in the product research and development (R&D) domain.
Both computer graphics and R&D design offerings take time to fructify. While Indian companies are yet to make a mark as a quality provider of content in the global computer animation space, R&D budgets of corporate, in the tightening economic conditions, is shrinking.
Mr. Madhukar Dev, Chief Executive Officer, Tata Elxsi said the company’s decision to be a specialist was strategic and also a mandate from the top executives of the Tata Group.
"The company’s success in the animation business is guaranteed, as there are no big names in this space who can offer both financial stability and technical capabilities", he added.
Unlike Asian countries like Philippines and Japan, India is yet to be categorized as an appropriate destination to outsource animation content, primarily due to the presence of large number of small sized firms. Medium sized software exporters who got into this space with great ambition have also not progressed. Case in point is Pentasoft’s Pentamedia. Mr. Dev said "Continuity in the animation business needs considerable investment in creative people and equipment. Managing, a creative workforce, unlike coders is challenging. Companies also need to have well known names in the industry who can endorse their offerings", he said, referring to Tata Elxsi hiring a reputed Hollywood consultant for its recently set up Los Angeles office.
The size of the market is difficult to state, as there are multiple reports, which estimates the global animation industry to be worth several billion dollars. Tata Elxsi has opened studios in Mumbai and Bangalore to develop content and is presently said to be working on some overseas and domestic assignments. Having a decade plus experience in selling SGI hardware (the most dominant computers in the entertainment industry), and graphics software is the advantage that the company has, Mr. Dev said. Through vertical expertise across industry segments, which makes it an end to end design and engineering solutions provider, Tata Elxsi hopes to make up for the slow corporate R&D spend. |
