Baan Company possibly first major international software products company to do software product development in India through outsourcing (1987) and then through own company in India (1989)

Last updated on 14th Jan. 2021

Author: Ravi S. Iyer

In his upcoming (to be published in near future) autobiography book, Jan Baan - https://en.wikipedia.org/wiki/Jan_Baan , founder of Baan Company (also known as Baan Corporation) - https://en.wikipedia.org/wiki/Baan_Corporation, writes that he visited India in 1987 with the goal being "to explore the possibility of setting up a software development team".  .. "The idea of expanding into India was novel, and risky at the time. In fact, we were the first company to set up a generic software development shop in India, before any other major software company began outsourcing to India." [14th Jan. 2021 note: The above paragraph of this post was updated with quotes from latest version of Jan Baan's autobiography. The previous version of this post had slightly different quotes from previous version of Jan Baan's autobiography.]

It seems that by "generic software development" Jan Baan is referring to software product development, https://en.wikipedia.org/wiki/Software_as_a_Product, which software product is meant to be sold to many customers, as against customised software development, https://en.wikipedia.org/wiki/Custom_software, where software is developed for one particular customer to meet that customer's specific requirements (not generic).

So Jan Baan claims that Baan Company (aka Baan Corporation) was the first major software products company in the world to do software product development in India from 1987 onwards through outsourcing. 

I think that this is an important statement or claim related to history of software product development in India for foreign companies. This does not seem to be currently reflected in Internet sources of such history. I doubt if it is known to software industry organizations in India, and to researchers and writers on history of Indian software industry.

Therefore I felt that the above statement's claim should be examined in depth by looking at history of software product development in India done for foreign companies till end of 1980s, which is what this post attempts to do. This post does NOT look at customised software development done by Indian software (services) companies for international customers, but only at software product development done by Indian software companies for international companies or done by international companies' own India offices for their (foreign country based) offices/headquarters.

Note that this post does not cover international software services companies and any outsourcing they did to India of such software development service needs. I repeat that this post covers only software product development done in India till end of 1980s. Also note that some companies in India have done very complex software as outsourced work from foreign companies or through software development centres established by these foreign companies in India in the period till end of 1980s but such work can be viewed as product software development work, at least in the context of this post, only if such developed software was sold by the foreign companies in the open world market to any customer who was willing to pay for it.

Given below is a summary of the information gathered along with some analysis followed by a concluding view. The detailed info. is provided in the Notes section later on.

Summary

1) In the 1970s and 1980s Indian software companies like Tata Consultancy Services (TCS), Tata Burroughs Limited (TBL) and Datamatics Consultants, have done (Datamatics surely has as I have direct knowledge of it) or seems to have done (TCS & TBL) software product development in India for USA computer companies like Burroughs Corporation (TCS & TBL), Tandem Computers (TCS) and Wang Laboratories (Datamatics) [see Note-1.3, Note-1.4, Note-1.5 and Note-1.7 for details]. But these USA companies (Burroughs, Tandem, Wang Labs etc.) were NOT software only/mainly companies - they sold hardware as well as software that worked on their hardware. So they cannot be called software products (only/mainly) companies, and are instead typically called computer companies reflecting the mix of hardware and software they sold. 

IBM was in India till 1978 at which time it left India, and re-entered India in 1992 but it is doubtful if IBM did any software product development in India for its USA and global needs, prior to 1990 [see Note-1.8 for details].

2) Texas Instruments (TI) of USA opening an R&D centre in Bangalore in 1985 is viewed as a key milestone in history of outsourcing software development to India [see Note-1.6 for details]. [I think it is not exactly outsourcing as TI opened its own office in India to do that software development work. But that is just a terminology issue. See Note-1.1 and Note-1.2 for details.]  But was TI creating software products or was it developing software used by TI internally, even if such software may have been complex engineering software? Note that TI was and is a semiconductor company, as far as I know. I don't think TI India's work can be called software product development. Also, TI is not a software company.

3) I think, at least from an Indian software industry perspective, it was in the 1980s that major software products (only/mainly) companies came to the limelight (like Microsoft, Oracle, Informix, Lotus Software (Lotus 1-2-3), Adobe, Autodesk, Corel, WordPerfect etc. along with Unix vendors/distributors like SCO & BSD). Simultaneously we saw many computer companies which sold hardware and software together (like Burroughs and Wang mentioned in point 1 above), either wither away (like DEC, Honeywell, Burroughs, Wang etc.) or vigorously reinvent themselves to survive (like IBM), with some exceptions like Apple computer which continued to thrive. I experienced this in the second half of the 1980s as I started my software career in 1984 (as trainee programmer in Datamatics, SEEPZ, Bombay/Mumbai). 

4) I don't know whether Baan Company was a well known software products company in the 1980s like OS vendor Microsoft or database vendors like Oracle and Informix. Perhaps it was well known then (1980s) in the MRP/ERP software space but not in software world in general. It is in the mid 1990s that Baan Company became well known in software world in general as it rose to great heights with big customers like Boeing Company buying its ERP product(s).

5) Which of these major international software products companies first got software product development done by either an Indian company (outsourcing) or through its own India software development centre that it established/created? That is the key question for this post.

Microsoft opened its India development centre in 1998. It had opened its (general) office in India in 1990 but it is not clear whether this office did software product development for Microsoft [see Note-2.1 for details].

Citibank's software development centre in India called COSL started operations in 1985 (in SEEPZ, Mumbai) but that work was for Citibank, and has to be viewed as internal software of Citibank, even if it was used on a wide scale in many Citibank offices across various countries. However, in 1990 a company called CITIL was formed out of COSL, which started selling Microbanker software product which seems to have been first developed in COSL, in open market. [See Note-2.3 for details.] 

Oracle opened its software development center in India in 1994 [see Note-2.2 for details].

I had heard about Informix having a development center in SEEPZ in the 1990s but I was not able to locate info. about it on the Internet.

Baan Company started software product development in India in 1987 through outsourcing to Datamatics Consultants in SEEPZ, Bombay/Mumbai. In 1989, Baan Company progressed to doing software product development in its own India development center company in SEEPZ, Bombay/Mumbai. [Very brief history of initial years of Baan Company outsourcing software product development work to India from 1987, https://ravisiyermisc.blogspot.com/2020/12/very-brief-history-of-initial-years-of.html gives details.]

In my searching on the Internet I have not come across information about any noted international software products company other than Baan Company, doing software product development in India before 1990.

Conclusion

Based on the above, I think it may very well be true that Baan Company (aka Baan Corporation) was the first major/noted international software products company to do software product development in India from 1987 onwards through outsourcing to Datamatics in SEEPZ, Bombay/Mumbai. It may also have been the first major/noted international software products company to do software product development in India through its own office/company in India (in SEEPZ, Bombay/Mumbai) from 1989.

Notes

Note-1.0 Some data about software product development done in India for international companies in 1970s & 1980s gathered mainly from Internet

Note-1.1) The term outsourcing seems to be used in many different contexts in software field. 

https://en.wikipedia.org/wiki/Outsourcing states, "Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally,[1][2] and sometimes involves transferring employees and assets from one firm to another." The References for it are:

1.  "Oursourcing" [Should be Outsourcing] [https://www.britannica.com/topic/outsourcing ]. Britannica.com.

2. Ian McCarthy; Angela Anagnostou (2004). "The impact of outsourcing on the transaction costs and boundaries of manufacturing". International Journal of Production Economics. 88 (1): 61–71. CiteSeerX 10.1.1.468.9139. doi:10.1016/s0925-5273(03)00183-x.

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From this definition point of view, outsourcing can be used only when there are two different companies involved. So the scenario where a company has opened its own software development centre in India, cannot be referred to as outsourcing. In this post we look at both outsourcing as well as opening of international companies' software development centres in India.

Note-1.2) https://en.wikipedia.org/wiki/Outsourcing#History states, "the 1970s and 1980s were the beginnings of what later was named outsourcing".

https://www.outsource2india.com/why_india/articles/outsourcing_history.asp states "Although the IT industry in India has existed since the early 1980s, it was the early '90s which saw the emergence of outsourcing. First, some global airlines began outsourcing their back office work to India—and then IT companies followed. Some of the earliest players in the Indian outsourcing market were Texas Instruments, American Express, Swissair, British Airways and GE, who started captive units in India."

The Texas Instruments (TI) example given above may be somewhat inaccurate for 'outsourcing' as TI opened its own office (an R&D centre) in India for this software work.

Note-1.3) TCS is the abbreviation for Tata Consultancy Services,  https://en.wikipedia.org/wiki/Tata_Consultancy_Services . Burroughs is a reference to Burroughs Corporation, https://en.wikipedia.org/wiki/Burroughs_Corporation . Given below is a small extract from https://www.tcs.com/tcs-50

1973

Partnered with Burroughs to distribute and support its products in India as well as build software that would be exported to various Burroughs units and clients across the world.

Converted a hospital accounting system written in Burroughs Medium Systems COBOL to Burroughs Small Systems COBOL. At this point, TCS did not yet have a Burroughs computer on which to carry out the conversion. The team improvised by writing a ‘filter’ in assembly language on the ICL 1903 to parse the source code and convert it to the Small Systems version. This was the very first recorded instance of an offshore software delivery done out of India, 45 years ago, accomplished using automation!

--- end extract from tcs.com --

Perhaps the above project is not a software product development project as it converted an existing software product from one COBOL language variant to another.

F.C. Kohli and the Eureka Moment of India’s Software Industry, https://science.thewire.in/the-sciences/f-c-kohli-india-information-technology-industry-ibm-tcs-burroughs/ states that successful execution of above project gave great benefits to TCS: "It demonstrated to an American customer that software developed in India by local engineers could work on machines in America. For Kohli and TCS, it meant an entry into the US market. Contracts started flowing to TCS – from the Detroit Police, the City of Detroit, the State University of New York, from banks and so on." These projects seem to be specialized software development for a particular customer and not software product development which is meant to be sold to, and used by, multiple customers.

I was not able to get details of other projects done by TCS for Burroughs computers to know whether they did develop some software products for Burroughs computers, or provide maintenance and enhancement services. Note that later Tata Burroughs Ltd. (TBL) was spun out of TCS to handle Burroughs computers work. I think there is a good possibility that TCS or TBL may have done some outsourced software product development - perhaps maintenance and bug-fixing kind of work - for Burroughs Corporation in the late 1970s and 1980s.

Note-1.4) Datamatics or Datamatics Consultants is a reference to Datamatics,  https://en.wikipedia.org/wiki/Datamatics . Wang Labs. is a reference to Wang Laboratories, https://en.wikipedia.org/wiki/Wang_Laboratories . Wang Labs. USA "outsourced" some software product development work to Datamatics in India in the 1980s.

From https://www.ndtv.com/business/stock/datamatics-global-services-ltd_datamatics/reports: "Milestones achieved", "1983 – Pioneered India’s first offshore software factory by setting up a Dedicated Offshore Center for Wang Labs, USA." and "1989– First company to establish a satellite link from its software development center in India to AT&T Bell Labs, USA".

The above report says Datamatics had a "Dedicated Offshore Center" for "Wang Labs, USA" right from 1983! On the Internet, I could not find the details of the projects done here in the initial years of that center. Perhaps some of the work done would have been for Wang Labs. software products. I clearly remember the library in Datamatics SEEPZ office where many Wang manuals were kept, and have benefited from lot of reading of those Wang manuals in that library. Perhaps that library was set up as part of the "Dedicated Offshore Center" work.

Probably in 1989-90, I led a team in Datamatics SEEPZ office, on such a project (note that I quit Datamatics in May 1990 and this seems to have been the last major project I worked on, in Datamatics): "SMTP E-Mail Gateway for Wang Laboratories, USA: Unix, X.400, X.500, Sendmail, TCP/IP, OPEN/OFFICE, C " - from my industry work experience document: https://ravisiyer.files.wordpress.com/2011/09/raviiyerindustryworkexperience.pdf . This was clearly software product development, and so fits in the category of outsourced software product development.

Now Wang Labs. was a noted mini-computer vendor manufacturing and selling its own hardware, besides its own software, some of which were on its proprietary Operating Systems line referred to as Wang VS OS. But this product development (for Wang Labs) was on Unix platform. I don't know if Wang Labs. sold this SMTP E-Mail Gateway as a separate product. If I recall correctly, the top level design for this work was given to our Datamatics SEEPZ Bombay team by Wang Labs. We did the detailed design and development (in India).

I also contributed to another such 'outsourced' software product work of Wang Labs. to Datamatics Bombay i.e. "Wang Word Processor (WP/WP+) Archiving Utilities for Wang Laboratories, USA: Wang VS OS, VS Assembler". This, I think, would have been in 1989. 

The AT&T Bell Labs 1989 offshore software development center in Datamatics, mentioned in above ndtv.com report, at least in its initial year (prior to 1990 which is what this post focuses on), was software work on IBM mainframe, I think. I did not hear of any Unix software work in 1989 done by this team. Note that I was in Datamatics in 1989. So I think that work done in 1989 in this project would have been related to in-house software of/for AT&T and not for any software products of AT&T.

Note-1.5) Tandem is a reference to Tandem Computers,  https://en.wikipedia.org/wiki/Tandem_Computers. From https://en.wikipedia.org/wiki/Tata_Consultancy_Services#1968%E2%80%932004

In 1981, it [Tata Consultancy Services (TCS)] established India's first client-dedicated offshore development centre, set up for clients Tandem.

--- end wiki extract ---

But the above wiki info. does not provide a reference. https://www.business-standard.com/company/tcs-5400/information/company-history states, "In the year 1985 they set up their first client-dedicated offshore development center for Compaq (then Tandem)." 1985 is the year for this event in https://www.indianmirror.com/indian-industries/top-industries/tcs.html as well.

I think 1985 may have been the year when this work started and not 1981.

I believe the above Tandem work of TCS involved maintenance (and perhaps enhancement) of Tandem Operating System and other software. From https://en.wikipedia.org/wiki/Tandem_Computers: "Tandem Computers, Inc. was the dominant manufacturer of fault-tolerant computer systems for ATM networks, banks, stock exchanges, telephone switching centers, and other similar commercial transaction processing applications requiring maximum uptime and zero data loss."

So this seems to have been outsourcing of software product development work (done by TCS India) for a USA based computer company (Tandem).

If I recall correctly, during my SEEPZ days in second half of 1980s, the TCS software work for Tandem computers (which perhaps was done in TCS SEEPZ at least in the second half of 1980s) was regarded as one of the most complex software works being done in SEEPZ then, even if it was maintenance (bug-fixes and enhancement).

The https://www.tcs.com/tcs-50 page does not show Tandem project info (for years 1981 to 1989 which I checked).

Note-1.6) Texas Instruments, abbr. TI, refers to https://en.wikipedia.org/wiki/Texas_Instruments . Texas Instruments India Fact Sheet of year 2015, https://www.ti.com/lit/ml/szza071/szza071.pdf states on page 1:

Texas Instruments (TI) recognized the value of India for global research and development (R&D) as early as in 1985. Initially attracted by the country’s engineering talent, TI established an R&D center in Bangalore, the first global technology company to set up such a facility in the country. In the last three decades, the India center has emerged as key R&D site.

Note-1.7) Like TCS/TBL and Datamatics had relationships with major computer companies in USA (Burroughs, Wang) in 1970s & 1980s, other Indian software/computer companies of that period also had relationships with other major USA based computer companies (e.g. Hinditron with DEC, Patni Computers with Data General). These other Indian software/computer companies may also have developed software products for the USA computer companies they were associated with.

Note-1.8) IBM is the abbreviation for International Business Machines Corporation,  https://en.wikipedia.org/wiki/IBM . IBM was in India prior to 1978 at which time they had a disagreement with Indian government and left India [see HISTORY OF COMPUTING IN INDIA (1955-2010) by V. Rajaraman, IEEE Computer Society, https://ethw.org/w/images/8/87/Rajaraman%2C_V._History_of_Computing_in_India%2C_1955-2010.pdf, page 3]. IBM re-entered India later in 1992 ["IBM which had returned to India in 1992 as an equal partner of the Tata group bought off Tata group’s share and became the sole owner of IBM (India) in 1999.", page 53 of same book].

It is doubtful that IBM got any software product development done in India prior to 1990. For the period prior to 1990 (which is what this post looks at), IBM seems to have only sold computers in India and provided support for them. Same may be the case for ICL, https://en.wikipedia.org/wiki/International_Computers_Limited, whose computers were used in India in the 1960s & 1970s. In the above mentioned book, V. Rajaraman writes, "In comparison to IBM its rival International Computers Ltd., a British company which was marketing ICL 1901A computers, had a market share of only 48 machines which were assembled between 1965 and 1975 by Bharat Electronics Ltd. (BEL), a public sector company" (on page 19).

Note-1.9) Page 29 of above V.Rajaraman book states, "The number of computers in India which was less than 1000 in 1978 increased to 80,000 in 1990. There was insignificant software export in 1978 whereas it increased to USD128 million in 1990."

Note-2.0 Software Product Development done in India for international software products (only/mainly) companies

Note-2.1) Microsoft is a reference to Microsoft Corporation, https://en.wikipedia.org/wiki/Microsoft . From https://www.microsoft.com/en-in/msidc : "Microsoft India Development Center is one of Microsoft’s largest R&D centers outside the Redmond headquarters. Set up in Hyderabad in 1998, we represent Microsoft’s strategy of globally shared development to build products and services."

From https://en.wikipedia.org/wiki/Microsoft_India : "Microsoft India Private Limited is a subsidiary of American software company Microsoft Corporation, headquartered in Hyderabad, India. The company first entered the Indian market in 1990 and has since worked closely with the Indian government, the IT industry, academia and the local developer community to usher in some of the early successes in the IT market."

Note-2.2) Oracle is a reference to Oracle Corporation, https://en.wikipedia.org/wiki/Oracle_Corporation. From https://www.ibef.org/download/Oracle.pdf : "Oracle opened its India Development Centre (IDC) at Bangalore in 1994, with a view to leverage the talented Indian workforce for product design and development. Subsequently, the IDC has been expanded to another facility in Hyderabad. The IDC provides software development for the entire Oracle product family for Indian and global markets. Oracle India employs 6,000 people and recruited around 250 per month during financial year 2004."

Note-2.3) The Long Revolution: The Birth and Growth of India’s IT Industry by Dinesh C. Sharma, Chapter 7, https://yaleglobal.yale.edu/long-revolution-birth-and-growth-indias-it-industry , states that Citibank set up a facility in India for software development to meet "computerization requirements of Citibank worldwide", called Citicorp Overseas Software Limited (COSL) in SEEPZ, (Mumbai), which was inaugurated on 28th Oct. 1985.

It states, "The unit (COSL), in its formative years, developed software for internal use of the bank in America and other regions. Soon it diversified into banking products for non-Citi customers. MicroBanker was one such product."

A new CITIL company that would sell software products to banks other than Citibank "was carved out of COSL in early 1990s", https://en.wikipedia.org/wiki/Rajesh_Hukku.

https://en.wikipedia.org/wiki/Oracle_Financial_Services_Software clearly says that CITIL (which was later renamed as I-FLEX and finally as Oracle Financial Services Software Limited (OFSS)) was founded in 1990. In my searches on the Internet, I could not get proper references to first release date of Microbanker software in open market. But as Microbanker was released by CITIL (after its founding naturally) as a product in the open market, Microbanker product's first release date cannot be prior to 1990. 

Microbanker initially seems to have been developed by COSL for Citibank. But COSL (Citibank India software development centre) work prior to Microbanker product release to open market, has to be viewed as internal software of Citibank, even if it was used on a wide scale in many Citibank offices across various countries, and cannot be viewed as software product(s) sold in open market. 

I recall from my SEEPZ days that in second half of 1980s and going into the 1990s, COSL was considered to be one of the top employers for software developers in SEEPZ.

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Postscript

Some noted Indian software and professional organizations are: NASSCOM (National Association of Software and Service Companies) [https://nasscom.in/ , https://en.wikipedia.org/wiki/NASSCOM ], ACM (Association for Computing Machinery) India [https://india.acm.org/ , (global) https://en.wikipedia.org/wiki/Association_for_Computing_Machinery ] , CSI (Computer Society of India) [http://www.csi-india.org/ , https://en.wikipedia.org/wiki/Computer_Society_of_India ] and IEEE (Institute of Electrical and Electronics Engineers) India [https://www.ieee.org/about/ieee-india.html/ , (global) https://en.wikipedia.org/wiki/Institute_of_Electrical_and_Electronics_Engineers ]. I wonder whether these organizations have some info. on such history of software product development done in India for major international computer & software companies prior to 1990s (1970s and 1980s mainly). 

[I thank Wikipedia, outsource2india.com, tcs.com, thewire.in, ndtv.com, ti.com, ethw.org, microsoft.com, ibef.org and yale.edu, and have presumed that they will not have any objections to me sharing the above extract(s) from their website (small extracts from outsource2india.com, tcs.com, thewire.in, ndtv.com, ti.com, ethw.org, microsoft.com, ibef.org and yale.edu) on this post which is freely viewable by all, and does not have any financial profit motive whatsoever.]