Outlook for Indian software product business
Loading ...Blogging the Software Product Business meet @ NASSCOM, Delhi LIVE!
Key findings, Nov 2008 – research finding, Zinnov.
The NASSCOM software product study, what is it that we lack and how to help homegrown businesses go global was the focus for the research finding. We looked at the Silicon valley and other parts of the globe, exhibiting similar growth patterns in India could result into opening newer vistas into hugely untapped local markets.
First 45 minutes:
SO HOW DO WE DO IT?
We touched upon the various Indian SME’s, CIO’s and global CIO’s and why do they look at India into the product domain? In Banking products you have to look at India, have no other option.
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The Indian s/w product industry has witnesses an accelerated growth of 44% over the past 3 years
- While the top 5 players dominate, expansion in the tier-11 forms and startups has helped broad base the industry structure
Post studying over 500 products…
- Growth in s/w product startup activity over the last 3 years has also helped strengthen the industry product portfolio
Increased activity in the Indian software product industry is being witnessed only after 3 decades of its evolution about 350 companies got registered between 1985-1990, but all of a sudden the MNC’s were free to business in India, and hence Indian companies started slowing down.
If it all started very well why are we not going good?
The challenges being faced-:
- Small size of the local Indian market
- Lack of R&D talent
- Lack of VC investment in the 1985-1994 era
- Lack of distribution networks into the global markets
- MNC’s came to sell their products, so they were able to grab the share
- Parallel emergence of IT outsourcing
WHAT HAS CHANGED IN THE LAST 3 YEARS?
- Talent pool
- VC funding available for products, amost 273 VC offices set up in India
- Emergence of incubation centres – very important for infrastructure and mentoring for such young companies
- Role models – people who have been there, done that are now doing it in India
- Market development – there is a huge market in India, about 35 million SMB’s to be tapped into
- Technology disruption – an interesting trend, creating a level playing field for Indian companies, so the coming of an MNC within the same market does not hits the Indian counterpart
Dwelling DEEP into the above point now-:
- Entrepreneurs are being helped immensely with the market size and incubation centers
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Over time Indian based software companies have built highly successful product businesses
Indian software market is growing 2-3 times as the global market. High untapped opporttunity for entrepreneurs. Local requirements are huge. No one has actually figured out the right strategy for the local market.
The software building levers are changing and the way softwares are built are being changed:
- Cloud computing/Vitualization/SOA/Open source
- Delivery models as – SaaS
Innovation in delivery model has led to a radicl shift in global software distribution processes. SaaS has created new markets for SMB’s, hence newer markets are opening up, which sounds as opportunity for emerging entrepreneurs. Going forward we see a huge upsurge into the SaaS and such business software delivery models.
BASED ON THE OPPORTUNITY WE REALIZED
There is a huge opportunity for Indian businesses.
- By 2050 we have a market size worth 350 billion dollars
- BFSI sector
- Telecom
- BI and Analysis
- ERM
- Security
- Retail
- Storage
- Mobile Applications
- Online Gaming
- SEM
Online search and marketing business is a highly successful business globally. In India its still to be structured more. Currently its a 100 million dollar market and growing at 33% YoY. There, hence is a sizeable opportunity for the Indian companies.
Action across four themes will help India based software companies to achieve accelerated growth.
- Influencing the market
- Enhance the talent pool
- Strengthening the capital ecosystem
- Facilitaing the support system
OUR STUDY SAYS: there is no BRAND built for Indian companies to put there products on the global domains.
Doing trade development efforts. There are other parts of the world where we can get high value. Leverge partnership models.
Global CIO’s don’t understand there is an option in India, how do we bridge that gap? How do you address piracy? Cost of product in India is very high, how do you address that?
Sustaining current growth momentum requires more active engagement amongst the various constituents of the s/w product ecosystem.
For entrepreneurs its immensely necessary to tap into these:
- Idea and concept
- Have a strong market research backing the Bplan
- Build a prototype
- Flexibility to change the idea/concept
Software product businesses require significant investments and it takes 36-48 months. So how do you so it?
Leverage partnerships. Ecosystems across the business value chain of the software products can help in rapid expansion of the business.
The session pre tea drew to a close with an interesting Q&A with discussions from the mind and mouth of an entrepreneur.
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