PACT BETWEEN SERVICES, PRODUCT COS COULD FUEL GROWTH: ANALYSTS

Bangalore
The Economic Times (Bangalore edition)

Collaboration between software service providers and product firms could become the key factor influencing the growth and competitiveness of Indian product companies, industry experts said on Monday.

Subash Menon, the CEO of telecom products company Subex, said at the Nasscom product summit here that a win-win relationship could be established when large system integrators such TCS, Infosys and Wipro help product firms by taking their solutions to the marketplace and in turn get revenues for implementation and maintenance.

The Indian IT industry is undergoing a major shift as many product companies come into prominence even as the commoditisation of IT services is seen as not adding much value to the sector.

According to Nasscom President Som Mittal, around 40% of the IT industry’s revenue is likely to come through innovation in the near future and this will be largely driven by product companies.

Some 100 product companies started operations in 2007 with a total investment of $150 million.

While software industry leaders agree that there is a high degree of mortality among product firms, Pari Natarajan, CEO of consultancy Zinnov, said there are enough role models in the industry, which entrepreneurs can look up to.

Nasscom also released its study on the Indian software products business and estimated that this segment could grow to record revenues of $9.5-12 billion by FY2015 from the current level of $1.4 billion.