Go local, start-ups told

Independent software vendors (ISV) in India should target the applications requirements of the booming domestic telecommunication and retail market as one of the avenues for growth, said Sridhar Mitta, chairman e4e Labs.

Speaking at seminar on growth opportunities for ISVs organised by Microsoft in Bangalore on Thursday, Mitta identified the mobile application space, which is set to grow exponentially, as a key avenue for ISVs to grow.

Additionally, there is the equally booming retail market with more than five lakh kirana stores looking at some sort of automation in billing and data mining. This is another huge opportunity for ISVs to target.

He added that ISVs should focus on opportunities which give them scale and the bandwidth to expand the operations at a fast clip. "This is one of the major criteria which venture capitalists always look for and also the ability to tap global market," he noted.

A Microsoft spokesperson added that for the Indian IT industry to move up the value chain, realising the products opportunity is extremely important.

"However, this business opportunity is also among the toughest to realise. The Indian ISV community faces several challenges which, if overcome, can ensure that India has a significant share of the approximately $11 billion opportunity by 2008. Our objective is to help the ISV community overcome these challenges by partnering with NASSCOM, TiE and venture capitalists to enable the Indian software community to scale up to global markets," he added.

Earlier, speaking on the methodologies ISVs should adopt to make headway in this business, S Jagadish, a senior professor at IIM-B said that most business owners and managers spend 70 per cent of their time working on operational issues, 25 per cent of their time on tactical issues, and only 5 per cent at best on strategic issues. "This must change immediately."

"ISVs cannot afford to be reactors who have no distinct emphasis. They have to either adopt a focussed differentiation or a low cost innovator approach and should aggressively develop opportunities in niche markets through product and market expansion, unique products or services and customer service. They should do this with a clear emphasis on cost leadership and should go after applications for end-user computing," he noted.