New Delhi, June 3: NEC Corporation of Japan and HCL Technologies will set up a $5-million joint venture company in August to provide offshore-led solutions in embedded software, hardware design and mobile technology to NEC, its subsidiaries and their clients worldwide.
NEC Corporation and its subsidiary, NEC System Technologies Ltd, will have a 51 per cent stake in the joint venture, while the remaining 49 per cent will be held by HCL.
The joint venture will also focus on network and security, research and development and high performance computing for NEC and its clients. The ownership of the intellectual property for products developed by the joint venture company will be retained by NEC.
Shiv Nadar, HCL founder and chairman and chief executive officer of HCL Technologies, said, “The JV is expected to grow to about $25 million in the next three years and has a potential to scale up to $75 million to $100 million of revenues per annum in five years. The company will become operational in October.”
Nadar also said HCL’s relationship with NEC dated back to 1997, which started with a small project in system software and currently encompasses work on mobile technologies, embedded software, network and securities, R&D, security products and web technologies.
The joint venture will be based in Noida and will employ 70 professionals in 2005-06. The employee base will expand to 250 in the next three years.
HCL will provide the CEO and chief technology officer (CTO) along with some key technical people to kickstart the joint venture. An advisory committee with representation from the top management from each partner will be formed to set the course for the company.
This alliance is a part of NEC’s strategic intent to harness Indian IT prowess and leverage its advantages to provide greater value and higher quality of products and services to its subsidiaries and their clients globally.
Toshihiko Takahashi, president of NEC System technologies Ltd and executive vice-president of NEC Corporation, said, “In Japan, there is a growing demand for mobile embedded software and advanced software development. The market is also in demand of networking software.”
He said, “The joint venture is strategically positioned to enable NEC and HCL to explore business in areas not covered in the current focus of joint venture.”
Hiroshi Oka, associate senior vice-president of NEC System Technologies Ltd, said, “I have a lot of expectations from the JV and HCL in embedded software, network and securities products, hardware design and related tools and other cutting-edge technologies yet to emerge.”
