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The emerging product opportunity
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With
India being
recognized as the global software services hub, the question
that is being asked is whether this is the end or the beginning of
the journey towards being recognized as a software giant.
In
other words, does India have the
potential to transcend the image as a destination of choice for
outsourced services. Can India emerge as a
hub for more high-end R&D work, including core product
development? In the long term, can successful product companies
emerge from India?
Let’s examine some facts-
There
are nearly a 100 technology companies that have captive centers in India to cater,
typically, to high end design and product development work. This
includes giants such as Microsoft, Oracle, SAP and Intel as well as
best of breed players including i2, Manugistics,
Manhattan Associates and Ariba. The trend
is clearly pointing towards offshore becoming integral
to the product development strategy of these companies.
We
have also witnessed an increase in Offshore Product Development
(OPD), or global product companies outsourcing their product
development activities to Indian companies –
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Aztec,
Symphony, Induslogic, Persistent and Sonata
are some mid-sized players with a well carved out OPD offering. Israel
headquartered Ness Technologies’ has good
sized offshore development centers for leading product companies
including Business Objects. Emulating the manufacturing industry, it
is believed that, to stay competitive, product companies will need to
shift base or source from low cost countries like India.
Higher
up on the value chain are companies that are actually engaged in
product development. Hitherto considered impossible for want of
market knowledge and productization skills,
the creation of a market closer home –
India and Asia, as well as the increase in product creation
knowledge has led to the emergence of product companies from India.
Today, there are a
fair number of companies which focus on IP creation – SunTec Business Solutions and LifeTree
Convergence are in
the customer care and billing solutions space, Manthan
Systems provides business intelligence software for global retailers and Surya Software
provides niche products aimed at global financial services industry.
In addition, there
are several companies that have created products specifically for the
Indian market. Examples include Lasersoft in
banking, Mitoken and Karomi
focused on horizontal enterprise solutions and E-solutions, a company that
provides solutions for grocery retail chains.
Clearly, Indian
companies have taken the important first step in terms of IPR creation.
However, there are many challenges that need to be addressed –
product engineering skills need to improve by an order of magnitude, Indian
companies also need to learn how to brand their products and build
the sales channels to make their products available in the market.
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The
world is watching Indian companies to see if they can expand their
capabilities to truly provide the complete set of technology offerings – from application services, R&D services to products. The
next few years promise to be exciting both for IT companies as well as
industry observers.
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