Monday, April 02, 2007

India and Software Product Companies

I was reading an article in Business Today, on India's Hottest Software Product Companies (Link requires subscription), which lists companies like Sasken, Ittiam, iFlex and Infosys (Finnacle). One thing was common with all the companies. They are not even minnows. Finnacle's Contribution to the topline of Infosys is not even worth a mention. But just I saw it, I saw an article today that Infosys is eyeing some foreign acquisitions for strengthening its stance in the product space.
Sources said SmartStream, with over 1,000 clients, presents an ideal target for Infosys, which in has admitted to looking for acquisitions in mature markets to propel its banking solution product Finacle into global play. Its main competitor, Flexcube from i-flex, has got Oracle as its majority stakeholder giving it the much needed impetus in the global banking market.

Most of the Indian Software Products company are small time enterprise software companies filling a niche, or with some Financial Applications company serving an unserved market, with the exception of market leader Iflex, but then even Iflex grew by serving underserved markets, namely the Unites States of AFRICAS.

Having worked in a Mid-tier IT services company, trying to build an enterprise Software Application, read product, in the core team, I can understand why Indian IT product companies fail. Oh wait! We didn't even try, to fail. That IT servcies is where should grow, and that If at all we must look at Products, we should look at Internet Products, deserves a full post and I will write a full post on that.

Product Development entails huge investments, is risky, and takes a long gestation period time. There are only two ways to do this. You should be part of a conglomerate, like the TATAs to be able to invest huge sum of R&D dollars.. (TCS should actually spin off a Product company.) or The idea that you have should be that of a super product. Something that will change the world, to put it easily, in which case there will be investors queing up to wait till it starts to pay off.

When Indian IT behemoths tries their hand in product, they do it as a mix of product-services. They want to develop a product like they do a fix bid Applicaton Outsourcing or Software Project. If Infosys wants Finnacle to Suceed, and the market is huge, they should spin off a Company, and use some of the CASH lying in their books to aggresively market the product and fix it proper. Infosys can always generate extra revenues on maintenance and Implementaion.

As for why Consumer Software never took off India, it is just that it just never happened. If the idea behind Skype or Youtube was to come from India, nothing would have stopped it. Not that Indians are less creative, but it just never happened. Expect it happen sooner than not, though...

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Blogger natraj623 said...

if you want to see an innovative product come entirely from India, see our mobile advertising network, ZestADZ ( I agree that there is no shortage of talent or creativity but it requires a mindset, focus and passion

21/3/09 11:28 AM  
Anonymous Anonymous said...

The mindset is missing. Huge Investment is required in software productization and market development, that is not supported even you have great product ideas and ready to market products too.

8/6/09 1:09 PM  

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