Face it, fight it and survive it smartly. That's how Anand Deshpande, CEO, Persistent Systems, is wielding action in the R war. He shares some good tried-and-tested mantras here in this chat with Pratima Harigunani of CyberMedia News as she attempts to understand how product companies are fighting the slowdown.

A lot has been discussed, speculated, dissected and wept upon when it comes to slowdown and its impact on the IT Service industry. But what's happening on the product terrain and how are OPD (Offshore Product Development) players grappling with the ebb?

Yes. Economic situation is tough and most of the customers are US-based. With the overall dismal market conditions, we have seen many implications like cost-reduction, conservation and suspended decisions since mid-October.

How are you responding to it?

The recent first two weeks of January have been spent in US trips and I have met about 30 customers. I would be following more of these trips ahead too. The idea is not to jettison existing customers as panicked vendors start chasing new customers to shore up revenues. These are the times when we need to deepen interest and partnership with existing customers and help them fight the tough times.

Eventually, we get a long-term allegiance as the customers remember who was standing by when he was going through a difficult phase. If you visit a friend only during parties, it's different. But if you visit him while he is sick, he would never forget it.

But how does one exactly do that when there are pressures of survival on this side?

We need to reassure customers that we are together. Secondly, I ask about the plans ahead. Because a lot of opportunities become visible in such times. Every CEO in this situation is looking for ways to increase topline. Now we can help him there as we are present in other parts of the world if he is looking for geographical scope or we might have other offerings or capabilities if he is looking for a portfolio scope. A product company can not just shut shop in a slowdown. Recession or no recession, it still has to come out with a product upgrade or a next version. The critical part now is to make those products come faster and with lower expenses. So we explore product rationalization, diversification, multiple products, outsourcing etc. Lot of customers are keen to find how they can sell more to customers in such times. If our customers win, we win too.

So far, what are the new pastures that you according to the aforementioned direction have started treading?

Services are one such area. As a company, we can ask about co-building opportunities, asks the customer to try our capabilities, for let's say three months and then take it ahead. Services around products, like testing, or implementation etc is what we can look into. Another area is the bridge between small or start-up bracket companies to mid-sized firms where we can try a chance to do the integration of the products adopted by the bigger side.

What's the win-win benefit?

Customers are happy to share their long-term vision but may be not sure about investing. If we know their direction, we can help them move right in that direction and at the same time figure out my role and roadmap as it fits into the customer's.

Do you thing recession has a positive purgatory effect?

Well, tough times force companies, both customers as well as us, to look inside strictly. On a good day, who bothers? But a bad day has its good corrections.

So, it's not time to sit back but rather act?

Yes, we know it's bad. But how much and for how long would you talk about it. The market is set to improve after some time. What would you do then? Where do you see yourself then?

How similar or different are the recession impacts for the product industry vis a vis the services industry?

The timeline of effects may be different but it is similar otherwise. IT Services are essential for any IT company, those can't be shut down overnight and so cuts, which do happen, happen only at a quarter lead. In products, the cuts happen faster but at the same time spends have to move on. Unless they do that they would never come out of the mess. Upgrades are necessary. Product companies can't just sit back till times get better. To survive, they have to continue and keep selling.

Do you think the recent inclination towards 'As-a-service' models is a knell for product companies?

Well product companies have started realizing that they need relevant offerings to survive in the changing markets. They would figure out how to rearrange their offerings. The question has different answers from short-term Vs a long-term angle.

Is cannibalization a pertinent concern?

That's a bigger issue. My opinions and observations are quite deep and different.