Outsourcers Induslogic, Bonus Technology Merge

Induslogic, a provider of outsourced software product development services, is merging with another outsourcer, Bonus Technology, to get access to Bonus’ operations in the Ukraine, the companies said Monday. The financial terms of the merger were not disclosed.

Induslogic, of Vienna, Virginia has about 90 customers, and delivers most of its product development offshore from India. Bonus Technology of New Jersey in contrast has focused on the Ukraine for the delivery of product development services to its approximately 10 customers of which the largest is Telecordia Technologies, a provider of software and services for IP (Internet Protocol), wireline, mobility and cable networks.

The combined company, called GlobalLogic, is forecast to have revenue of US$50 million for this year, said Induslogic chief executive officer Peter Harrison, who will take over as chief executive officer of GlobalLogic.

Induslogic was planning to acquire an outsourced product development company in the Ukraine for the last two years, as a number of its customers were outsourcing part of their product development work to companies there. “If a portion of their product is very algorithmic and mathematically computationally intensive, customers would send that work to Ukraine, as they could not get in India the specific skills they required,” Harrison said. By having an operation in the Ukraine, GlobalLogic will now be able to get that part of the product development work as well, according to Harrison. “We can now be a one-stop shop for these customers,” he said.

Bonus has a team of 250 engineers in the Ukraine, of which half have master’s degrees and more than 15 percent have doctorates. The average experience of the staff in the Ukraine operation is 12 years in contrast to five years in the Indian operation, Harrison said. GlobalLogic plans to double the number of staff in the Ukraine to about 500 over the next 18 months.

Expansion in the Ukraine will not be at the expense of its Indian operations, Harrison said. GlobalLogic plans to increase the number of staff in India from 1000 at present to about 3000 over the next 18 months. The company employs some 50 staff in the U.S.

India offers a larger pool of skilled talent than the Ukraine or other low-cost locations in Eastern Europe, Harrison said. Although Indian staff are not good at working on products that involve hard-core mathematics, Indian staff are good at building other products and have strong project management skills, he added. Having operations in India and the Ukraine will enable GlobalLogic to offer more services to its customers, including round-the-clock development, as well as provide them a disaster recovery model spanning two continents, Harrison said.

-John Ribeiro, IDG News Service (Bangalore Bureau)

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