Fun. Review on Quality Engineering And Software Technologies, Inc

Folks, So many write the reviews on Quest, if it is such a sick company how could it win AIRBUS- Biggest contract.Naik

Majors for Airbus Deal

Cades And Qu EST Could Win Contract Worth$300 M;Infy, Satyam Left Out Of Race

PANKAJ MISHRA & JAYADEVAN PK BANGALORE

Two of India's biggest software firms - Infosys and Mahindra Satyam - have been outbid by smaller, niche rivals QuEST and Cades for an outsourcing contract potentially worth over$300 million from the worlds largest commercial plane maker, Airbus.According to at least three people involved with the discussions, Airbus plans to outsource more design projects for its 380, A350 and A320 series of planes to vendors based in India to slash costs by up to 40% and focus better on competing with

rivals such as Boeing.These projects involve designing wings and other avionics systems for the planes and are more complex and better priced than traditional outsourcing work that include back office operations and writing software codes.Airbus strategy is two fold give more work to hungry niche suppliers and develop a much bigger base of vendors in India for addressing the defense offset clause, said a person familiar with the aircraft makers outsourcing strategy. He also confirmed that both QuEST and Cades have been given letter of intent(LoI) for this contract by Airbus. Airbus and other Indian service providers had not responded to an email query sent by ET last week. By 2012, when Airbus readies its A350 planes, the company plans to send as much as 20% of all

its projects to India. Much of this growth in outsourcing to India can be attributed to the countrys defense offset clause that makes it mandatory for companies to source at least 30% of the value of contracts awarded from local suppliers. Over next ten years India is expected to spend nearly$100 billion on buying fighter planes and helicopters, and nearly one third of this will have to be sourced locally. Airbus has two divisions in charge of designing the next generation of planes.The centre of excellence(CoE) focuses on specific aircraft programs such as A350, or A380.The centre of competence(CoC) focuses on specific technologies and R&D for wing structures, avionics, etc.The second person familiar with the bidding process said Airbus had shortlisted around 5 Indian suppliers including Infosys, Mahindra Satyam, QuEST and Cades apart from at least two European vendors including Capgemini.Experts such as Ratan Shrivastava, director, aerospace & defense practice at research firm Frost & Sullivan say customers like Airbus and Boeing are preferring suppliers such as QuEST and Cades to meet the defense offsetrequirements. Companies like Quest and Cades specialize in some areas with services ranging from design and development, engineering analysis, manufacturing engineering, embedded systems development to some manufacturing and

prototyping. These companies are located in Special Economic Zones(SEZ) and it is easier because all the necessary clearances are in place at SEZs. Companies like Airbus and Boeing are also doing this to meet their offset requirements Indias engineering services outsourcing(ESO) market has been growing slowly but steadily.From around$2 billion currently, India's ESO market is expected to reach$50 billion over the next ten years as more aviation and manufacturing companies seek to lower their design costs by outsourcing to the country. Aviation customers are increasingly looking at sourcing design and other IT projects from India not necessarily for cost savings, but also because the country offers a pool of skilled engineers who understand complex

avionics.Some experts say large outsourcing firms are also not too keen on contracts from Aviation firms because of the risks involved.Lot of the work in the aircraft industry is also a risk reward type of situation where a lot is dependent on the success of the aircraft .Moreover, the gestation is long. Large players are usually not very comfortable with such deals.Also, such work requires high end knowledge in Computer Aided Engineering(CAE), something which companies like Quest and Cades are adept at, said Sudin Apte, principal analyst and chief executive at Offshore Insights, an advisory firm.Both Airbus and Boeing have been outsourcing to India-based vendors over past many years.Boeing awarded a deal to HCL Technologies to develop software for its 787 Dreamliner and has also formed collaborations with several institutions such as IISc, IIT and National Aeronautical Laboratory, for development of futuristic aerospace technology.Hindustan Aeronautics(HAL) is developing components for Airbus'sA380, including the doors.QuEST, on other hand, is making the components that go into the landing gears of aircraft's made by

Airbus and Boeing.