Mobile revolution is what is driving the Indian economy, is the word coming in from Shantanu Narayen, president and CEO, Adobe Systems.
However, as a percentage of global revenue, Adobe is still starting off a small base because digital marketing is a new business. It is starting from scratch here in India. The company clearly has a more established presence on the digital media side.
On the R&D play in India, Narayen says approximately 25 percent of all R&D worldwide is happening here. “There is not a product in the US that is not touched by some piece of India R&D and the growth rate has just continued to accelerate,” he told CNBC-TV18.
Below is the verbatim transcript of Shantanu Narayen’s interview with Shereen Bhan on CNBC-TV18.
Q: When we last spoke which was a couple of months ago, you were confident about the India story. The headline numbers continue to look very good. Of course India is the island of growth among most emerging markets at this point in time. How bullish are you about the India business and about India’s contribution to Adobe’s global revenues?
A: Honestly, what is driving the Indian economy right now is this mobile revolution and as you know a big part of our business is everything we are doing around digital marketing and transformation that technology is causing on businesses and given how significant the mobile explosion is here, we are pretty bullish about what is happening in India.
Q: What does that mean in terms of growth and in terms of revenue contribution? Are we expecting significant double digit growth for your business here in India and how much will the India business contribute to Adobe’s global revenues?
A: When you think about India as a percentage of global revenue, it is still starting off a small base because digital marketing is a new business. We are starting from scratch here in India. On the digital media side, clearly we have had more established presence. But when you look at growth rates they are clearly explosive, when you see what is happening with e-commerce companies like Flipkart and Snapdeal and so we will have various significant growth rates from a percentage point of view. I hope to double our business all the time but from an overall contribution to Adobe it is still relatively on the small side.
Q: Can we talk to you specifically about the changes that you are seeing within your India business? You have a change at the top – Naresh Gupta is going to be exiting by the end of March. Do you have a replacement identified? When can we here that announcement?
A: Naresh has done an absolutely magnificent job for us. I wish him well. I have partnered with him for seventeen years on this journey that we have been to build India as a global research and development (R&D) force and part of what he has done is create a phenomenal batch of leaders who are ready to assume more responsibility. So, Shanmugh Natarajan is going to be our executive director for the R&D. Umang is going to continue to run our field organisation. So, part of what we are doing is actually building bridges with all of these key leaders with the business leaders in the US so that we can actually continue to invest and grow here in the market.
Q: So, you will not actually be bringing in a replacement whether internally or externally for Naresh?
A: We do have an internal Head of India’s R&D, we do and that is Shanmugh Natarajan.
Q: Can we ask you about the R&D play in India and your expansion plans because the last time that I spoke to you, you were talking about expanding significantly to drive innovation out of India. I understand that you have a new facility in Noida. If you can take us through your current expansion plans and what we can expect.
A: We have a facility in Bangalore that we have just inaugurated and this new facility in Noida which actually augments our existing facility. So, when you look at what we have, we have over 3,000 people which is a significant portion of Adobe’s global employment here in India and on the R&D side. Approximately 25 percent of all R&D worldwide is happening here. There is not a product in the US that is not touched by some piece of India R&D and the growth rate has just continued to accelerate.
Q: What is that going to mean in terms of your headcount? You are currently at 3,000 employees as you just pointed out. Are we likely to see significant growth as far as your headcount is concerned as well here in India?
A: We do not breakout absolute numbers but we have added probably 1000 people. In addition to R&D we have made very significant investment in two other areas in India’s global consulting and our services on digital marketing as we continue to help people transform their businesses. The consulting and implementation, resources required to make that magic happen are frequently here in India and in addition to that as we are building these demand generation centres for our product, more things like inside sales, a significant or a disproportionate part of that growth is actually happening in India as well. So, India truly now represents a microcosm of everything that we are doing abroad.