Presentation On Software Services in India

Group 8
Yeshwanth Kumar
Nishanth
Rahul
Madhu Krishna
Shishira Reddy
Rishika Rasthogi
 Agenda

• Software Services Overview

• Market Players and Competition
• Customers
• Regulatory body and Association
• Strategies and Policies
• Recent developments
 INTRODUCTION
• Software Services are broadly divided into IT
and ITES.
• “IT” is the “study, design, development,
implementation, support or management of
computer based information system particularly
software's applications & computer hardware
• “ITES” Information Technology Enable
Services, where outsourcing of processes that
can be enabled with IT & covers divers areas
like Finance, HR , Administration, etc.
 Overview
• The growth in the Software sector is attributed to
 Increased specialization
 Availability of a large pool of low cost
 Highly skilled
 The Supply is matched to the demand
• Share in GDP increased from 4.8% in 2005-06 to 7%
in 2008.
• In 2009, seven Indian firms were listed among the top
15 technology outsourcing companies in the world.
• In March 2009, annual revenues from outsourcing
operations in India amounted to US$60 billion and this
is expected to increase to US$225 billion by 2020
 Length and Depth
Software Customized BPO KPO ITES
Products Applications and
Websites
General Websites In-bound In-bound Across
Products Sectors

CRM Online portals Out-bound Out-bound

Banking and Need based B2B B2B

Insurance solutions
 Overview - Exports

• The Software exports industry displayed a

growth rate of 5.5 per cent in FY2010
• Industry accounts for 25% of India’s total
exports and 10.5% of Service revenues
• Over 900+ companies in India accounting
for USD 10.6 billion
• It is likely to touch $60-62 billion by FY
2011 from $31.4 billion in FY07
 Overview-Exports Cont..

USD billion
 Overview - Domestic

• Domestic Market is at an inflection point-

healthy growth of 12% in FY10
• 60+ Large transformational deals in
Telecom Retail, BFSI, e-governance
• Over 900+ companies in India accounting
for USD 10.6 billion
• BPO continues to be the fastest 108
growing segment at 22%
• Government IT spend estimated at INR 150
billion in 2009
Overview - Domestic Cont..

In Rupees
` billion
Exports vs. Domestic
Export’s Share of Total Output
Software Exports
Market Players and Competition
 Company Full Market Capitalisation (Rs.
crore)
INFOSYS TECH. 157,644.13
TCS LTD. 152,761.10
WIPRO LTD. 98,956.86
HCL TECH. 25,761.91
MPHASIS LTD. 12,551.81
ORACLE 18,092.12
FINANC TECH. 6,117.62
PATNI COMPUTERS 7,428.07
TECH MAHINDRA 9,130.40
ROLTA IND. 2,694.08
1,63,700 1,14,822 1,12,000 80,300

Genpact
Top Indian
IT Employers
64,557

42,500

37,119 35,267 32,000 39,000

 Customers - International
• United States of America:
• Federal
• Counties and Military Services
• Commercial
• Retail sector
• Automobile, etc.
• Europe
• Federal
• Commercial
• Middle-East
• Federal
• Commercial
 Customers - Domestic
• Government
• Departments
• All developments programs
• Commercial
• Banking
• Automobile
• FMCG, etc.
Regulatory bodies and Associations
 Strategies

• IT companies are devising new strategies to

ward off pressure on bottom lines due to
recessionary trends in the US. They are now
looking at non-linear growth models to shore
up revenues.
• According to a Forrester report, clients are
looking for solutions that would help them
automate discrete business processes or
aspects of product development
 Strategies Contd...

• IT and product development service providers

are, hence, developing solution accelerators,
which are pre-developed software that
technology and services firms use to automate
a particular business process. Around 30% to
70% of the code can be reused across clients.
 Strategies Contd...

• In their effort to build solution accelerators,

companies will look at mergers and
acquisitions. This will help them acquire
specific processes and domain expertise that
plug the missing gaps.
• "Companies such as TCS, Infosys and Satyam
can't hope to continue growing their headcount
as it would be unmanageable.
 Policies and Initiatives

• Establishment of nodal agency(STPI)

• Telecom sector De-Regulation

• Progressive Policy reform

• Semiconductor Policy

• Foreign Trade Policy

• FDI Policy for IT

• Export Promotion Schemes

• Advance License
 Recent developments
• Cloud Computing
• Virtual Environment
• Nanotechnology :
 The semi-conductor revolution
 High-end mobile phones
 Memory space for data storage devices can be
increased manifold using this technology
• Increase in demand for engineers in KPO sector
• Foreign acquisitions and merges
• E-Commerce and Supply chain management
• Idea Economy
 Competition
According to Forbes following are the best countries for
Outsourcing:
•China
•Philippines
•Russia
•Canada
•Mexico
•Ireland
 Variables that distinguish Indian from Chinese
software firms
Labor and Management India China
Professional employment 69% 29%
(median share of total
employment)
Entry level qualification for Post-graduate degree (≥17 Diploma or 1stUniversity degree
professional employees years) 13-16 years)
Labor productivity USD 25,567 USD 29,625
(output per worker)
Quality certification (share of 47% 7%
firms with CMM certification)
Effect of CMM certification on 90% Faster No Effect
revenue growth
Technology input: R&D spending 72% 92%
(% of firms with R&D)
Foreign non-equity strategic 60.2 11.9
alliances (% of firms with)
Effect of one more foreign 6% No effect
alliance on revenue growth
English language All Educated Indians are English China doesn’t lack software
speakers and the largest engineers with sufficient English,
software markets are English but does lack managers who are
Language able to work with English-
speaking customers
 Why India on top

• Made greater use of more educated professionals and

more experienced managers without incurring higher
labor cost
• Achieved quality certifications to overcome liability of
foreignness
• Established non-equity strategic alliances with foreign
firms
• Received direct and targeted assistance from
government, mainly via software technology parks and
tax concessions from export earnings
 Future

• While until about a year ago top Indian service firms

were charging American companies $75 to $90 an hour,
today the figures are merely $6 to $9. Murthy believes
that China will very soon do the same job at about $3 an
hour -- and that will bleed Indian firms to death.

• Alliance as a way to leverage and create a win-win

situation for both parties
 Future

• India exports about 70 per cent of its software to the US

and Europe, while China exports about 90 per cent of its
hardware goods to the western markets. But in turn the
US exports 90 per cent of software to China, and 60 per
cent of its hardware to India. If India and China can come
together, they can not only cater to the entire world, but
also dominate their own domestic markets
Thank you.