Scandinavian developers Flander and Ardites are merging with Symbio Group to create a global player in the outsourced product development space in a deal announced late tonight. Symbio, which has headquarters in Beijing and Silicon Valley, provides outsourced product development (OPD) services to clients such as China Mobile, IBM (s ibm), Microsoft (s msft) and Nokia (s nok). Flander develops mobile and embedded software, and Ardites creates user-experience technologies. The longtime partners hope to leverage Symbio’s presence and brand in China with their collective scale to compete with ODP behemoths such as Persistent, Globallogic and Symphony — all of which have a strong presence in India, according to Jacob Hsu, who will serve as CEO of the new Symbio. I spoke with Hsu in advance of the announcement.
“What’s going to be a really unique differentiator is that we’re the only one who is China-based,” Hsu said. “A lot of people like to make India vs. China comparisons. We don’t really view it as an either/or, but China is clearly emerging as a global R&D leader. Over 600,000 engineering graduates are coming out of China’s universities every year…That’s why I think a lot of technology companies are shifting from India to China.”
The OPD segment is undergoing a fundamental shift, Hsu told me, as companies take a closer look at their outsourcing activities. Many firms didn’t fully enjoy the economic benefits they thought outsourcing would bring and are looking to get more value for their outsourcing dollars. Hsu hopes to tap into that demand by combining China’s active R&D market with global reach and technology from Flander and Ardites.
“It wasn’t a haphazard choice to come to Scandinavia” to forge partnerships, Hsu said. “Last year, China was the No. 1 destination for R&D spending…So you’ve got China being this emerging leader in terms of R&D, and at the same time we’re marrying that to Finland (Flander’s home market) and Sweden (Ardites’ turf), which are No. 1 and No. 2 in terms of R&D maturity, R&D spending per capita. We’re trying to take mature hubs with proven processes and cultures and marry that to the most scalable R&D location in the world.”