India's Software Products In A Hyper-Growth Phase
The Indian software products sector is set to enter a hyper-growth phase, with industry body, Nasscom estimating a minimum of 2,000 start-ups a year by 2020, as against a likely 800 in 2014. The figures it said are based on a study conducted jointly with management consulting firm Zinnov. The study also reveals that the software product start-up segment is estimated to generate 250,000-300,000 jobs by 2020, as against the current 65,000-75,000.
Expressing their views on the growth of the software product industry in recent years, Nasscom said at its annual flagship NASSCOM Product Conclave 2014 in Bangalore that the increasing numbers of online active users becoming consumers of e-commerce solutions and the related marketplaces, Indian startups today are building global digital solutions to capitalize on this rapid growth. Hyper-growth, capital availability and acquisitions are the leading drivers of the growing startup ecosystem in India. Indian start-ups today are well positioned to address the entire Asian market opportunity and also expand beyond the US and European region.
India’s software product system is currently the third largest in the world, following the US and UK. Other destinations such as Israel, Germany, Russia and Singapore are also fast catching up. Outlining the strong growth in the sector has seen in recent years, Nasscom product council chairman Ravi Gururaj said India churned a little over 480 software product start-ups in 2010, rising to about 680 in 2013. “The country could have about 11,500 product start-ups by 2020, as against around 3,100 now,” he predicts.
Nasscom president R Chandrashekhar too believes that software product start-ups will play a vital role in the growth of the entire information technology industry in India. “Indian start-ups are now innovating for the world, which is leading a lot of global players to look at India as a hub. Also, there are huge opportunities within India for software product start-ups, in view of initiatives like Digital India,” he said.
The Indian Software Products Industry Roundtable (iSpirt), a think tank, had earlier estimated India to have a potential to build a $100-billion software products sector by 2025, as against the current $2 billion if the government and the industry “act purposefully”. In a report published early this year, it has expected the domestic market to grow at about 14 percent annually or three times the global rate in the coming years – with a chunk of the demand coming from SMEs, healthcare and education.
Nasscom too estimates, Indian software product start-ups have attracted funding worth $2.3 billion in India since 2010. “Scaling up, Design and Growth Hacking are the key priority for startups today. On the innovation front, it is imperative to increase collaboration and partnerships for product companies with platform players, IT Services, Global MNCs and CIOs,” says Gururaj.
The report also shows that six locations, including Bangalore, Delhi and NCR, Mumbai, Hyderabad, Pune and Chennai make for nearly 90 per cent of the overall software product start-up activity and, Kolkata, Ahmedabad, Kochi, Jaipur and Thiruvananthapuram are fast emerging as other lucrative destinations in the coming months.
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