L&T Technology Services bets on smart machines

October 8, 2014

Mumbai: L&T Technology Services, a unit of India’s largest engineering and construction company Larsen and Toubro Ltd (L&T), is betting on smart and connected machines in the belief that analytics and the so-called Internet of Things (IoT) will shape the future of engineering. The firm that offers solutions for product design, prototyping and testing and embedded system design, among others, partnered US-based Proximetry, Inc., an IOT device management solutions provider, in January, to cater to the market of connected devices that are critical when operating electrical substations and large industrial facilities.

On 25 September, it announced a tie-up with Cisco Systems, Inc. to jointly invest in a global solution centre in Bangalore to work on connectivity and convergence-based solutions. “We are starting with 3-4 projects in the transportation sector, and are in the process of building the team. Some of the work has been demonstrated in the past in L&T. The idea is to explore how we can work with engineering, procurement and construction (EPC) companies to make railways, metros, and other mass transit modes more productive, intelligent and safe with the help of Internet protocol (IP)-based communications, Wi-Fi services, video surveillance, and automated operations,” Keshab Panda, chief executive of L&T Technology Services, said in an interview. Cisco’s connected transportation solutions aim at providing a centralized view of highway systems, enabling vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2X) communication so that automobiles can “talk” to each other and with traffic lights, roads, toll plazas, rail crossings and roadside cameras. The solutions also envisage real-time alerts on weather, traffic, and emergencies besides providing greater collaboration between emergency and transit operators and agencies. L&T Technology Services, said Panda, also hopes to take advantage of L&T’s strength in the transportation infrastructure and rail transportation sectors, before “expanding to other areas such as manufacturing, defence, and the off-highway transport segment”.

L&T Technology Services, known as L&T Integrated Engineering Services (IES) till it was rebranded in September 2012, has about 9,500 employees and had revenue of about Rs.2,150 crore in the year ended 31 March, according to Panda. “By the end of this fiscal (2014-15), we will become a $450 million (about Rs.2,750 crore) turnover company,” said Panda, adding that the company gets only 3-4% of its revenue from L&T, and over 50% from the Americas, little over 20% from Europe, and the remaining portion, from the rest of the world. The company, said Panda, also plans to make small acquisitions. In June, L&T Technology Services acquired a 74% stake in Thales Software India Pvt. Ltd for an undisclosed sum to expand its avionics business. “In the next 15 days, we will acquire a US-based analytical and manufacturing engineering company that has operations in India. But we won’t be spending more than $50 million on any acquisition,” Panda said. In a 11 June interview, L&T executive chairman A.M. Naik had said the initial public offering (IPO) process for L&T Infotech and L&T Technology Services will start in July 2016. Naik had then also spoken about “…small-ticket acquisitions of around $30-40 million for its engineering services company”. Analysts see a lucrative business opportunity in technologies that enable devices to communicate with each other. In a 16 September note, research firm Gartner Inc. forecast that the installed base of “things”, excluding personal computers, tablets and smartphones, will grow to 26 billion units in 2020, adding there will be a $309 billion incremental revenue opportunity in 2020 for IOT suppliers from delivering products and services.

Software lobby group Nasscom expects the engineering and research and development (R&D) outsourcing industry in India to touch $40 billion by 2020 from the current $10-11 billion mark with automotive, telecom, retail and aerospace industries expected to outsource 40% of their engineering activities to engineering service providers by 2020. But the competition is stiff, too. Big- and mid-sized Indian IT services providers like Tata Consultancy Services, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd, Tech Mahindra Ltd, KPIT Technologies Ltd and Tata Technologies Ltd also have big clients in the engineering vertical, and partner with networking companies to provide similar solutions that take advantage of technologies like M2M or Machine-to-Machine (where information is collected by a sensor transmitted across a network of wired or wireless devices), and smart meters—that monitor consumption and use analytics.

The fact remains, though, that the engineering services segment is at “an inflection point with significant shifts in business models, increased demand for solutions and globalization driving up the competition amongst global players”, as noted in the ‘Global R&D Service Providers Rating 2013’ annual study by advisory firm Zinnov Management Consulting.This should alert engineering service providers, said the study, to look at opportunities such as “engineering analytics” since global companies are expected to spend over $27 billion on engineering analytics. Panda believes data analytics in engineering is far more complex than it is in the retail sector. “You have to account for factors like current, voltage, harmonics, etc., and know how to fix it,” he explained, concluding that the success of IOT-enabled sensors lie in reducing their cost, “something that we’re working on”.

Source:live mint

One comment on “L&T Technology Services bets on smart machines” Post your comment

  1. infrastructure architect on November 30th, 2014 12:44 pm

    infrastructure architect…

    L&T Technology Services bets on smart machines : Indian Tollways…

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