The annual revenue aggregate of Indian software product businesses are forecast to be around $9.5-12 billion by financial year 2015, according to a study by Nasscom.
As per the report, the next decade will play a crucial role in bringing about disruptive growth for the Indian Software Product segment, and the annual revenue aggregate of this segment is forecast to grow from $1.4 billion in financial year 2008 to $9.5-12 billion by financial year 2015.
This is evident from the recent trends in market activity aided by a maturing ecosystem, which indicate that the Indian software product businesses are now approaching an inflection point in their evolution, and the time is right to bring about disruption. Enterprise application software will present the largest opportunities with business intelligence, enterprise resource management with storage and security being the key priorities.
"The product segment in India has the potential to grow 10 times its current size and touch anything between $9.5-12 billion, over the next decade. We have a lot of work to do and have identified all the stakeholders who can make this happen," NASSCOM President Som Mittal said.
"The Product industry in India is coming of age with world class IP now being created from India in key domains and end-to-end design and development services provided to global ISVs by captive and third party units in India. With new models like SoA and SaaS now maturing, the opportunity exists for Indian product development to take the global spotlight. This will need focus on breakthrough innovation and global marketing with access to multi-level funding. An ecosystem for creativity must evolve in the leader and challenger locations to enable this, and NASSCOM is committed to making this happen," Ganesh Natarajan Chairman NASSCOM and Deputy Chairman and MD Zensar said.
India's R&D offshoring experience, software product talent landscape, the high innovation – low cost advantage, domestic market potential, changing 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.
Industry CEOs, CIO's of user industries, product startups, technology seers, venture capitalists, angel investors, and marketing experts will congregate at Bangalore for this two-day action packed agenda of debate, sharing of new initiatives, and showcase of Indian products in the market.
HIGHLIGHTS
- Recent trends in market activity aided by a maturing ecosystem indicate that Indian software product businesses are now approaching an inflection point in their evolution.
- Market: Over the past two decades, India has emerged as a global hub for product R&D activity, especially in the technology industry. Today, there are over 600 multinational companies (MNCs) undertaking product R&D in their subsidiaries in India.
- Accelerating growth: over the past 3 years, the annual revenue aggregate of Indian software product businesses has grown at a CAGR of 44 per cent. Leading Indian software product firms have strengthened their product portfolio through steady investments in organic growth as well as through overseas acquisitions and have reached credible business scale.
- Broadening industry base: Of the existing 371 software product start-ups since 2001, over two-thirds have been formed in the past three years – of which about 100 companies have started their operations in 2007 alone. As a result, while the top 10 companies still dominate, accounting for 84 per cent of the segment revenues, there are over 200 midsized companies and start-ups that have started generating revenues and are contributing to its growth.
- Incubation support and venture capital interest - today there are 38 incubation centres spread across the country that are actively focused on assisting technology start-ups with funding and mentorship. Since 2005, total VC investment in India has grown at around 42 per cent to reach $543 million in 2007. Over the same period, funds invested in the software products segment have grown at a slightly faster annual growth of 43 per cent, from $76 million in 2005 to $156 million in 2007.
- Growing market - India is forecast to be the world's fastest growing IT market over the next few years, with its share of the global software market growing threefold by 2015. Increasing IT penetration across small and medium businesses (SMBs) and the government/public sector are likely to be the key drivers of this growth. Estimated SMB share of domestic IT spending is forecast to grow from 38 per cent, currently, to over 50 per cent by 2015.
Current trends in the evolution of these factors indicate strong momentum, supporting a positive outlook. Targeted actions by key stakeholders across four key themes will help accelerate the next phase of growth, and enable the annual revenue aggregate of this segment to reach USD 9.5-12 billion by 2015. These are
* Influencing market development
* Enhancing talent pool
* Strengthening capital ecosystem
* Augmenting the support ecosystem |
