Ittiam Systems: The 3rd option

Businessworld

So far we've had services companies and products companies. Ittiam Systems is India's first technology firm to be based on IP licensing. Is its model viable?

For years technology firms in India have debated how they can move up the value chain. Most technology firms in India, such as Wipro, HCL and MindTree, are services firms. Engineers jointly develop products such as routers and semiconductors with their clients. The intellectual property (IP) in such a model rests with the client. The firms are only paid for their resources - time and material - which limits their ability to charge a premium for IP. Also, services is a linear model: revenues grow directly in proportion to the number of people employed.

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