Nasscom to identify growth opportunity for product cos

Friday, 06 September 2002, 19:30 IST
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India's leading software body said on Thursday it had set up a forum to help local companies boost development of software products, which carry higher profit margins than services, in which the industry is well entrenched.

BANGALORE: "We are talking about identifying a new growth opportunity for Indian companies," Som Mittal, vice-chairman of the National Association of Software and Service Companies (NASSCOM), told a news conference. Exports of software services make up the bulk of India's $10 billion IT services industry. Most companies focus on providing low-risk services billed by the hour on the back of the country's large pool of low-cost, English-speaking engineers. Only a handful of Indian firms, including Citibank-backed i-flex solutions and Bangalore-based Subex Systems , have ventured into products. NASSCOM Chairman Arun Kumar said the gradual worldwide shift to open standards from proprietary networks coupled with significantly lower development costs and a large talent pool in India offered an opportunity for companies to develop products. He said the number of Indian firms operating in the software products development space had risen to more than 450 from nearly 320 two years ago, but this could be increased further. Growth in India's software services exports slowed to 29 percent in the past year to March, hit by a technology slowdown in the United States, after rising roughly 50 percent every year in the late 1990s. The industry's total exports topped $7.5 billion last year and are seen growing 30 percent this year.
Source: IANS