SOFTWARE PRODUCTS
Indian IT’s Fourth Wave
Can India’s software product companies play in the global arena?
DHANYA KRISHNAKUMAR
16 Jan 2009
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| (Graphic by Neeraj Tiwari) |
When Sanjay Swamy, chief executive officer and founder of mChek, was trundling by in an autorickshaw in 2003, he asked the driver the time and the man pulled out his mobile phone for a clock. That was Swamy’s Eureka moment. Realising the deep penetration of mobiles, Swamy floated mChek, a company that uses mobile phones as a secure payment device. mChek’s many clients now include Citibank, Yatra.com, and Airtel (Remember the Vidya Balan and Madhavan ads?) Companies such as mChek are mushrooming in India at the rate of 12-15 per month, signalling the fourth IT wave in the country. The first wave in the 1970s and 1980s created the offshoring model, which led to the birth of most of India’s premier IT firms; the second in the late 1990s built up the BPO business. In the third wave from 2002-06, IT firms began setting up bases and acquiring companies abroad.
In fact, in a first, last year the industry shed decades of gender bias by giving birth to more software product companies (52 per cent) than software service companies. India’s rapidly growing middle class has sparked the demand for more evolved products, and necessitated increased investments in technology. Players are also benefiting from the globalisation of Indian industry, and are leveraging their India experience in other emerging markets. This has made the domestic market a major playground for new companies to try their products locally before seeking business abroad.
So providing competition to the top 10 products companies — the big four Oracle (formerly i-flex), TCS, Infosys and 3i Infotech provide banking solution products Flexcube, BaNcs, Finacle and Kastle, respectively — are scores of new entrants.
Chennai-based OrangeScape — recognised as the top innovator for two consecutive years by Nasscom — is one such company to reckon with. Its DimensionN allows creation of Web-based applications using spreadsheets without worrying about programming. Suresh Sambandam, founder and chief executive officer, explains, “The client can create a model of the application on a spreadsheet and our product transforms it into a Web-based application.”
iViz Security, another high flyer, started at IIT Kharagpur back in 2004, was selected by Nasscom as one of the Top 4 emerging product companies in August 2007 and was also nominated by the World Economic Forum for Technology Pioneers Challenge in 2008. It addresses a $10-billion (Rs 49,000-crore) global market for computer systems/network security, iViZ’s SaaS (software-as-a-service), and has clients such as CNN-IBN, BT, Reliance Communications and Makemytrip.com. iViZ technology evaluates the security of a computer system/network by simulating all kinds of next-generation hacking techniques. This analysis is carried out from the position of a potential hacker, and can involve active exploitation of security vulnerabilities. Any security issues that are found are presented to the system owner together with an assessment of their impact and a proposed solution.
Expansion of such tier-II firms and start-ups has helped broad-base the industry structure, which is dominated by the Top 5 players, accounting for 84 per cent of the total revenue.
“Market indicators suggest that this segment is undergoing rapid transformation and is approaching a new phase of accelerated growth,” says Subash Menon, CEO of Subex and chairman of the Nasscom Product Forum. Subex, which sells Nikira, a fraud management system, has 32 telecommunications service providers as its clients.
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 slated to grow threefold by 2015. The IT growth and its exciting prospects have sprung largely due to the emergence of an ecosystem in the domestic market to spawn and support software product companies. Earlier, “The one big problem was that there was no ecosystem at all when we entered the space in 1993,” explains Kamesh Ramamoorthy, COO of Ramco Systems.
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