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India gears up to emerge as software product hub
Wednesday, 05 November 2003, 20:30 IST
BANGALORE: The Indian software industry, which survived the onslaught of the global technology meltdown and staged a remarkable comeback, is raring to move up the value chain.
Having had a global impact in the services arena by building strong domain knowledge and brand equity over a decade, several Indian IT firms are set to embark on product development and embedded software in the current decade.
With a view to encouraging Indian IT firms to expand their profile from pure applications and services to designing and developing software products, Nasscom (National Association of Software Companies), the Indian software industry body, organised its first ever summit here Tuesday, as part of the ongoing five-day IT.com 2003 event.
Though the IT services sector has been able to maintain a compounded growth rate of 26-28 percent even in the face of a global downturn, its share in the product development space has been a mere 0.2 percent of the total $180 billion global software product market.
Inaugurating the "Product and Embedded Software Summit 2003" Nasscom chairman Som Mittal told the 300-odd delegates that it was high time the maturing Indian IT industry and its global majors approached software product development more aggressively.
"The strong domain knowledge and global exposure provides a stepping stone for Indian IT firms to look at developing software products. This was not being done till now since Indian firms have been focusing on software services on account of better risk-reward metrics," Mittal stated.
The Indian IT industry's strong value proposition in terms of low development costs, large talent pool, mature quality control systems, proven offshore model and growing domain skills will continue to hold the country in good stead in the product development space too.
"While a beginning has been made by a handful of companies in the product and technology services, India has a long way to go to emerge as the global product development hub though 70 percent of the software development is design-led."
Due to limited market reach and low acceptability of a 'Made in India' brand, only a few Indian IT firms have ventured into the product domain, he said.
Moreover, with product life cycles getting shorter, the risk of marketing software products have put paid to the efforts, Mittal pointed out.
According to the Nasscom-McKinsey study, the product and technology services' segment is set to grow phenomenally in the next five years to achieve a revenue of $8-11 billion by 2008.
Signs of the momentum picking up are evident from the 29.4 percent growth registered from the product and technology services during the last two years.
Export revenue from this segment jumped to 
66 billion ($1.4 billion) in the fiscal year 2002-03 from 51 billion ($1.08 billion) during fiscal 2001-02.
As a result, the share of the product and technology services pie in the total software and service exports of 348 billion ($7.2 billion) has gone up to 14.3 percent in 2002-03 from 13.9 percent in 2001-02.
"To provide impetus to the product segment and encourage more Indian companies to venture into the product space, Nasscom has formed a special forum to catalyse and address their concerns," Mittal declared.
Among key measures initiated by Nasccom are allowing exchange of ideas and identifying issues related to marketing, branding, investments and IP (Intellectual Property) creation and protection, ensuring participation in leading international conferences, seminars and exhibitions, and a 'Made in India' campaign for software products developed by Indian firms.
Besides, 'Inside India' will showcase multinational firms using India as an R&D base for their global outsourcing and off-shoring.
Source: IANS
66 billion ($1.4 billion) in the fiscal year 2002-03 from 51 billion ($1.08 billion) during fiscal 2001-02.
As a result, the share of the product and technology services pie in the total software and service exports of 348 billion ($7.2 billion) has gone up to 14.3 percent in 2002-03 from 13.9 percent in 2001-02.
"To provide impetus to the product segment and encourage more Indian companies to venture into the product space, Nasscom has formed a special forum to catalyse and address their concerns," Mittal declared.
Among key measures initiated by Nasccom are allowing exchange of ideas and identifying issues related to marketing, branding, investments and IP (Intellectual Property) creation and protection, ensuring participation in leading international conferences, seminars and exhibitions, and a 'Made in India' campaign for software products developed by Indian firms.
Besides, 'Inside India' will showcase multinational firms using India as an R&D base for their global outsourcing and off-shoring.
Source: IANS