JDA Software to invest Rs 500 cr in India

Move to accelerate product development, build out marketing infrastructure in India over next five years

Scottsdale, US-based supply chain management solutions company. JDA Software Group Inc, will be making an incremental investment of about Rs 500 crore to accelerate product development and build out marketing infrastructure in India over the next five years, according to Abel A Correa, vice-president (product development).

JDA has forayed into the Indian market with the acquisition of US-based Manugistics Group Inc, which has a product development centre in Hyderabad, for approximately $213 million in cash in 2006.

It further expanded its India footprint by acquiring Nasdaq-listed i2 Technologies Inc in a transaction valued at $604 million in 2010, which brought into its fold the latter’s global consultancy solutions centre in Bangalore.

“While we are now more into architecting the solutions in India and giving them back to the US, which is our largest market, what we are looking for is to churn out products right from their design stage from here. And, 2015 is where the goal is,” he told Business Standard.  

Currently, close to 95 per cent of JDA Software’s products is developed on a joint ownership basis between the US and India centres. Correa, however, said that their aim was to execute 70 per cent of the work, including design, concept, development and testing, from India in another couple of years.

To build the human capital required to take the whole process to the design stage, JDA is planning to hire more engineering talent available in India. “Today, about 40 per cent (or 1,856 professional) of our 4,500-strong global workforce work out of the Hyderabad and Bangalore centres. We intend to ramp this up to 2,500 by 2015,” he said.

Once a Nasdaq-listed entity, JDA Software had gone private in December 2012 after RedPrairie Corp, backed by private equity firm New Mountain Capital LLC, acquired it in a $1.9-billion deal that merged the two providers of software for managing corporate supply chains. JDA, which follows a January-to-December financial year, reported revenues of just over $1 billion in 2012.

Stating that India was a growing market for JDA, with around 25 customers covering the manufacturing, retail and supply chain verticals, Correa said a growth of 50 per cent in their India business was possible in the next one to two years driven primarily by the increasing customer demand.

“We are well positioned in the automobile industry as we already have the global expertise of working with companies like Renault, Ford and General Motors. Now, we are talking to a couple of automotive companies in India. In think, we will stand a good chance,” he added.