Excerpts from an interview with Douglas Mow, Senior VP Corporate Strategy and CMO, Ness Software Engineering Services
Suparna Goswami Bhattacharya
February 13,2015: Ness Technologies, a leading technology service provider, was listed on the Nasdaq till 2011 when it was acquired and delisted by Citi Venture Capital International, in a $307 million deal. IFM spoke to Douglas Mow, senior VP Corporate Strategy and CMO about the company’s strategy, expansion plans and how it would like to brand itself.
|Tell us about Ness SES?|
Ness SES is a unit within Ness and has a turnover of $170 million. It has approximately 3,500 employees. See, we are living in a pretty innovative age and there is something new coming up every day. For companies, technology is really not an option any more. It is a necessity. We develop software for companies who are not necessarily technology firms. For instance, our vendors are printing companies, distribution companies among others. We become their partner and an outsourcing development arm for them to be able to compete in this digital economy.
Why did Ness think of starting this unit?
In fact, this was the original part of Ness from the very beginning. Over time, the company branched out into traditional IT services. This created a bit of confusion in the market. We have now refocused our efforts into the software engineering side of it. Companies today are known by their technology. Analysts have stated that software acts like a brand image and companies know you by your software. In the end, it all boils down to the development of technology.
You said that every company today has to be digitised in order to stay competitive. Do you have a team in your company to educate firms on the benefits of digitisation?
We have an Extended Development Center (EDC) in our office. This team partners with our clients and helps them in their decision making. Our relationship with our customers is extremely tight. The team also discusses innovative ideas that talk about how we can help them grow their business. Often our team sits with the management of our customers and brainstorms on their product strategy. So every customer will have an EDC. Sometimes, our employees get co-credited when our customers go for patenting. Unlike traditional IT companies, we do not work on project basis. Relationships with our clients go beyond 10 years and we often have the same team working for one company.
Why did Ness delist itself?
First of all, being a listed company has a cost associated with it. The first is the huge compliance cost. One also has to bear the cost of staff, who, on a regular basis, have to deal with compliance issues. And these costs are not insignificant. There are other problems as well. When a big decision is made, it has to be made public as there are disclosure issues involved. Sometimes, a management is forced to make an uncomfortable decision if majority of the shareholders want it that way.
What was Ness betting on when it decided to delist itself?
See, I was not part of the company at that point in time. So I will not have an answer very specific to Ness. But these decisions are usually taken when investors feel that the company is performing below its potential.
You have a significant presence in India, but it is nothing compared to TCS, Accenture or Infosys who have hundreds of thousands of employees. What is your strategy?
Our strategy is not focused on enterprise IT. That market we feel is tapering off in terms of value. Continuing to provide support for patching internal IT systems is necessary but that is not a winning business for companies today. What’s winning for them today is their ability to engage technology to open up a new market, offer a new product and radically streamline their cost using IoT (Internet of Things). This requires a significant degree of engineering rigour. It also requires something different that traditional IT firms have not done before. It requires creative design. India is very important to us for achieving this. There is enormous engineering talent available there. Though Eastern Europe too has good talent, India has the numbers. We want India to be one of the many, probably the main, global centre for Ness.
You recently bought a creative agency. What were the reasons behind this move?
We want to serve our customers on both the technology as well as the design front. We would like them to come to us rather than go to two different agencies for one product.
Which are the new geographies you are looking at?
It would be Eastern Europe, Latin America, South America and South East Asia.
How would you brand Ness?
We want to be the employer of choice. We want our employees to understand our mission. We aim to help companies compete in the digital economy. To do the kind of things they are not able to do themselves. We want people to think that Ness develops products that never fail