A group of 30 software product companies in India recently got together to form the Indian Software Product Industry Round Table (iSpirt). As the name suggests, it is a think-tank dedicated to the software products segment. But India’s information technology (IT) and business process management (BPM) industry, which has grown from US$100 million in 1992 to US$108 billion in 2012, has been represented by the National Association of Software and Services Companies (Nasscom) for the past 25 years. So why did these 30 firms feel the need for another platform?
Talking to business daily Business Standard, Bharat Goenka, founder-member of iSpirt and the cofounder and managing director of Tally Solutions, one of India’s leading software product firms, said: “At Nasscom, the product companies do not have the same weightage as the services companies. The policy interventions Nasscom is trying to make are more in favor of the services industry.” Sharad Sharma, another founder-member of iSpirt adds: “We believe that with this think-tank, we will get a louder voice in policy making and other initiatives.”
Nasscom is underplaying this move by the product firms. N. Chandrasekaran, chairman of Nasscom and CEO and managing director of India’s top IT firm Tata Consultancy Services, told India Knowledge at Wharton during a recent media event: “When you are on a growth paradigm, you cannot do everything that you want to do. I don’t see any conflict [with iSpirt].”
But Nasscom clearly realizes that it needs to change. In July last year, it set up an expert committee chaired by N.R. Narayana Murthy, cofounder and chairman emeritus of Infosys, to chart out a roadmap for the industry and for Nasscom. Releasing the committee’s report recently, Murthy said that the industry should aspire to be US$300 billion by 2020, and he listed seven key initiatives that Nasscom needs to focus on to reach this goal.
Pointing out that since its inception, Nasscom has primarily focused on IT services, global in-house centers, business process outsourcing and engineering and R&D services, Murthy said: “Even as we strengthen the existing areas of focus, we need to look at new areas of growth like Internet and mobile content and commerce, software products and the domestic market.”
Murthy observed that according to the expert committee, by 2020 the Internet and mobile space could account for US$100 billion, the domestic market could bring in US$75 billion and software products could contribute around US$10 billion to India’s IT-BPM industry. But for this potential to be realized, Nasscom needs to realign its structure to increase its focus on these three areas. Nasscom’s executive council also needs to be reconstituted to have adequate representation for the seven identified priority verticals.
The committee has also recommended that Nasscom set up country councils in key markets. Murthy noted that it was imperative to rebrand India as “a proactive solutions provider, instead of a reactive solutions developer.” He noted: “We want to become end-to-end solutions providers and interact at the boardroom level.” Chandrasekaran added: “The branding should reflect both what we do and also our aspirations.”