Product Bug 4.0

Today, India still tops AT Kearneys Global Services Location
Index as the most attractive destination for services offshoring. It has proved
its mettle in terms of software services, with software and services exports
from its top ten companies having crossed the $15 bn mark during 2006-07. It
works for major companies across the worldincluding the software product
developers. But, by itself, it is just not a powerhouse of software products.
Even if a study by IIM Bangalore sees a $7 bn potential by the year 2010. And
even if the global software products industry is estimated to be worth $350 bn
in the year 2007.

These are not inconsequential numbers. So, why is this segment
underdeveloped?

We all know the reasons why having branded products or other
intellectual property-based services is important. Because no IPR means no
resale. Having the IPR on a product means that you can leverage new products off
old ones. With great products, its easy to build and retain a strong consumer
base. Recognition of this need has been around for a few years. Google a bit and
you will find the net littered with discourses on having your own IPR. And with
predictions that the next year will be the year of the software product. Google
a bit more and you will find many Indian software products. One website
mentioned 5,500 products listed.

Nasscom has recently launched a Product Business Guidance Panel
(PBGP) to assist companies in India that want to get into the product
development space. The panel will ensure that such companies can avail
government support if they require it, and that they have the guidance they need
from industry leaders and representatives to overcome the challenges that will
present themselves. Nasscom, through public-private partnership, is also
planning to set up an India Innovation Fund of Rs 100 crore. This fund will
provide angel funding solely to start-ups focused on innovation in the
technology sphere.

So, where is the bug? Actually there are a few.

Bug one is that no earth shaking idea has emerged from either
the large companies or the small software developers. There are ideas for how to
do an existing application betterbut none which break completely new paths.
No Google, no Skype, no YouTube. I do not profess to know the reason for thisbut
innovation that can lead to quantum jumps is missing.

Bug two is that the domestic market does not pay for softwareat
least not for new and untried stuff. So, the experimentation and learning
becomes more difficult and expensive. So, where does the new idea have to gather
substance? In the international markets. And that increases the challenge by a
breaking amount.

Bug three is that support and funding for ideas is scarce. Not
unavailable, but certainly not as easy as writing good code. So there is every
possibility that some great ideas have got lost.

Few big companies have walked the talk. The total investment in
developing this industry would be lower than what is spent on advertising cold
drinks in the country. Or betting on one cricket match. The vision is big but
what has been put on the table is loose change.

Bug four is that we have a successful model based on service up
and running. Those who have made it with that model do not want to defocus.
Others want to focus only on the working model because it appears to be easy
pickings.

All this should not belittle what has been achieved by a few
companies and individuals. Good work has been done and will only increase. But
fishing in a river when there is an ocean around is not the best idea.

The author is editor-in-chief of
CyberMedia, the publisher of Dataquest.

He can be reached at shyamm@cybermedia.co.in