Revenue from Indian software product business is expected to be in the range of $9.5 billion to 12 billion (Rs 39,900 crore- Rs 50,400 crore) by FY15, from $1.4 billion (Rs 5,880 crore) in 2008, says a Nasscom study.
'Nasscom Software Product Study: Outlook for Indian Software Product Businesses’ states that the next decade will play a crucial role in bringing about disruptive growth for the Indian Software Product segment.
India’s R&D offshoring experience, software product talent landscape, the high innovation – low cost advantage, domestic market potential, changing venture capital (VC) environment and support ecosystem all contribute towards positioning India as a strong contender in this space and position it to capture a slice of the global software product pie.
Som Mittal, president, NASSCOM said, “The product segment in India has the potential to grow ten times its current size and touch anything between $9.5 to 12 billion, over the next decade. We have a lot of work to do and have identified all the stakeholders who can make this happen.”
The study points out that recent trends in market activity aided by a maturing ecosystem indicate that the Indian software product businesses are now approaching an inflection point in their evolution. Enterprise application software will present the largest opportunities with BI, ERM with storage and security being the key priorities.
“The Indian software product story so far has been an export driven story with 68 per cent of the revenues coming from just exports of these products. However, going forward, home-grown software product businesses will surely witness an increased acceptance in the domestic market, thereby increasing the revenue share from domestic sales,” opines Pari Natarajan, CEO, Zinnov.
The report notes that by 2015, Indian software product business revenues would be more evenly balanced between domestic and export based sales and share of revenues from the domestic market would increase from 32 per cent in FY08 to an average of 41 per cent by FY2015 to reach $4 to 5 billion. “Key parameters such as proximity of Indian software product businesses to the local market requirements; excellent understanding on localisation requirements, and ease of adopting customised and targeted sales approach would fuel this growth,” says Natarajan.
Subash Menon, Chair Nasscom Product Initiative, Founder Chairman, MD & CEO, Subex said, “I am thrilled to note that there are at least 10 to 15 companies that seem to be scaling up, apart from being successful in the global arena. These companies will act as the pillars of this nascent, yet promising industry. India clearly is poised to emerge as a key player in the lucrative and fast growing software products arena within the next few years.”
