Today it was my turn to visit HCL. I spent time with the engineering services group. This company has strong roots in engineering, given that it got its start with hardware and OS manufacturing. While the rest of IT services may be getting commodotized, business models related to engineering services are emerging. Shivkumar (VP ERS) and his team explained an emerging model to me. Product innovation based on embedded systems is a growing area. This is because physical products like cars and phones have a software/services component to it. When companies look to create new products or enchance existing ones, they source that to HCL's engineering lab. This lab has setup environments that can be used for product development and testing. These environments are standardized and certified for domains like medical devices and aerospace. These environment (like virtual machines on a computer) can be rented out to customers and allows the sharing of common services while protecting the differentiating IP of competitiors sharing the environment. Sharing the environment allows competitors to launch products faster and use lessons learnt from multiple users. While this capability may be commonplace with some vendors, HCL's distribution channels allows customers to test market their products in India's emerging marketplace. In addition, HCL is putting is place risk sharing models that allows cutomers to launch experiments and share rewards of successful launches with their customers. This is a space to watch closely.