India has been traditionally known as a destination to get software services carried out. However, as witnessed by international speakers and visitors at the 2011 NASSCOM Product Conclave held in Bangalore, there’s a whole new breed of software-based entrepreneurs growing major software product companies – ie: those that develop a specific product or service based on a software application, rather than simply providing software services to third parties.
According to India’s software industry association, NASSCOM, India has some 2,400 software product firms, classified into six major vertical sectors:
The ‘digital’ vertical has around 750 organisations, sub-divided in to the following categories:
The software product companies emerging from this sector are themselves addressing huge domestic and global markets. One example is a start-up company that has introduced what it claims is India’s first cloud telephony platform enabling entrepreneurs and businesses to develop their own apps using the telephony channel – and it is looking to service 800 million customers.
Other software startups include augmented reality-based products for retail, advertising, entertainment and medical, a game-based employee engagement platform, SaaS solutions for chronic therapies (initially for diabetes healthcare), and live video for the web.
According to NASSCOM, the software product industry in India has seen growth of 22% for the past five years. The 2,400 companies contribute US$2 billion to India’s software industry revenues. The organisation claims that the domestic software products market in India was US$158 billion in FY 2011.
Venture capital is also freely flowing into this sector in India – with organisations such as Sequoia Capital, Helion Venture Partners, and Nexus Capital having dedicated India funds. According to IDG Ventures, it’s thought that US$2.1 billion has been invested in technology start-ups in India since 2004, and this is expected to grow to US$7.5 billion over the next five years.