'Product firms in combinatorial innovation phase'

India has a critical mass of software product companies (over 3,500), which have entered the maturity stage. Currently, they are going through a period of combinatorial innovation, said BVR Mohan Reddy, chairman of Infotech Enterprises Limited (to be rechristened as Cyient Limited shortly).

Delivering his keynote on the topic ‘Need for product companies in India’s growth’ at Nasscom Product Conclave 2014 here, he said while India’s role in the global technology intellectual property creation had grown steadily, several challenges had constrained the growth of the homegrown software product businesses.

The challenges, he said, included low valuation of start-ups. Around 50 per cent of Indian product startups are valued anywhere between $1 million and $10 million.

“A maturing ecosystem has helped accelerate the growth of homegrown software product businesses over the past few years. Tier-II and III cities like Ahmedabad, Thiruvananthapuram  and Kochi are rapidly emerging as viable product hubs,” he added.

Stating that India scored a mere 4.95 on entrepreneurial culture as compared with the highest of 7.67 by the US, Reddy said the software product industry required more very-early-stage funding support to grow. “ The product industry has a potential of $100 billion by 2025,” he said.

Earlier in his address, Ravi Gururaj, chairman of Nasscom’s product council, said though the product company ecosystem in India was in a nascent stage, it would see a new generation of companies coming to life now.