IT industry lobby Nasscom on Monday said it would work towards strengthening the country's software product ecosystem. It set a goal as well - it wanted the products segment to grow almost five-fold by 2020, raking in $10 billion in revenues. In 2012/13, IT products earned about $2.2 billion.
To demonstrate its seriousness in helping the products industry grow, Nasscom announced a Product Council where young executives from software product companies such as Eka Software, Freshdesk, Indix, PK4, Infrasoft and Robosoft, will take centre stage in driving the sector's agenda. Serial entrepreneur and Chairman of FrictionLess Ventures Ravi Gururaj has been appointed Chairperson of the Product Council.
The Council will help product companies fine tune market access strategies, branding, corporate connects, product design, and improve access to funding, among others kinds of support.
Nasscom's activism on the software product front comes after a section of its members formed a separate think tank earlier this year. Called the Indian Software Product Industry Round Table (iSpirt ), the think tank aims to impact and shape policy for software product companies and arrange merger and acquisition connects. Nasscom has often been accused of being a "Big Boy's Club" where only large IT services companies were entertained.
It is better late than never. The industry's models are in the process of major change with the advent of cloud computing. Hardcore services companies such as Infosys are now talking about selling more and more products and solutions, delivered over the cloud. Moreover, the IT services industry may be hitting a plateau in terms of growth. The services industry's domestic hiring has slowed and may slow down even further in the future, as they hire more people abroad to comply with new labour legislation. New service lines such as analytics, infrastructure management services and consulting require fewer fresh graduates than traditional services such as application development and maintenance.
But software product companies - as opposed to services - can still potentially absorb a good proportion of India's large supply of engineering graduates. Som Mittal, president of Nasscom, estimates the product industry can employ half a million people if India can help nurture 10,000 start-ups in 10 years. (India has about 2,400 software product companies now). That would be a blessing considering there seems to be an excess supply of engineers even now. A report by Kawaljeet Saluja of Kotak Institutional Equities, released earlier this month, said the capacity of engineering campuses and the number of technically qualified students has increased 2.4X over the past five years. "The current supply of engineers is well in excess of demand," he wrote.