View from India: Opportunities abound in software and deep-tech ventures
Enterprises large and small have enhanced their digital infrastructure during the pandemic, and the pace continues. The digital acceleration of Indian enterprises has led to the proliferation of software products. Opportunities abound as the digital journey uncovers new demands.
The digital acceleration is reason for 2021 to emerge as the ultimate watershed year for the IT industry, says Debjani Ghosh, president of India’s software trade association Nasscom. “From services to start-ups to multinationals, the industry grew by 15.5 per cent year-on-year with $227 billion revenue in FY2022,” she said at the Nasscom Women Product Champions launch. “The services ecosystem has been recognised globally. The e-commerce sector has grown phenomenally as much as the product ecosystem, complete with product portfolios.”
According to the Nasscom report ‘India’s Software Product Ecosystem– Accelerating Growth’, the software product sector has evolved substantially to reach $13.3bn in FY2022. The software product landscape has grown impressively as enterprises are moving towards the cloud. This has intensified the adoption of software products like SaaS (software as a service), digital banking, enterprise digitisation and SMBs (small and medium businesses), CRM (customer relationship management), ERP (enterprise resource planning). These key horizontals account for over 50 per cent of market share, while banking, financial services and insurance (BFSI) and high-tech are the key verticals.
The ethos of management is driven by people who are passionate about evangelising products. The product ecosystem has a multiplier effect on livelihood, as it has created livelihood for 6.6 lakh (660,000) professionals in 2021. The product ecosystem worked out in practical terms simply because its nuances can be altered depending on geographical location.
While the product ecosystem has broadened with tools like WhatsApp and Stack Channel, there’s room for further expansion. “The fact that it’s necessary to reach out to a critical mass has urged technocrats to push the frontiers of innovation and make technology scalable. This has contributed to the development of the Indian software product industry,” reasoned Ravi Gururaj, CEO of QikPod. “As industries are transforming digitally, SaaS companies are scaling up rapidly for industries to showcase better designed products for the end user.”
Content, data management and enterprise planning are gaining traction within the software product segment. Seen futuristically, there could be scope for micro verticalisation, wherein SaaS professionals can build products of real value, which can be executed through low-cost developer tools. These tools can give value-add to products in the form of increasing the speed of production and compressing the cycle time to market products. “The USP of Indian software companies lies in their ability to tweak products for price-sensitive consumers. As cloud provides the solution, it is scalable and easy to implement,” Ghosh noted.
Given this premise, global enterprises are embracing Indian software products. “The Indian product ecosystem has made its global footprint. Now it’s time to innovate solutions for better customer access. The export Indian companies could also scout around for prospects in newer geographies. Hence the overall ecosystem needs to be reinforced in areas such as product management, design and scale,” highlighted Ramkumar Narayanan, chair - Nasscom Product Council, VP Technology & MD, VMware.
Companies are investing in digital infrastructure, and SaaS could be a must-have platform among organisations. Deep tech is also gaining momentum. Deep tech, which combines various disciplines like science, life sciences, quantum computing and engineering expertise, has got a boost during the pandemic which drove the need for contactless procedures and robotics. Technology has had to get smart and services become engaging and personalised. Besides that, there’s an urgent need to address climate change and also to clean up space debris. The answer for many such issues lies in deep tech, which is going beyond fundamental research to serve practical applications. Deep-tech start-ups are on the rise. A large portion of the income generated from verticals such as manufacturing, retail and telecom can be attributed to deep-tech strategies.
The Software Product Ecosystem report has projected that deep-tech penetration in software products is expected to reach 40-60 per cent. SaaS products are likely to dominate the market with revenue potential of $30-40bn by 2030. The outlook also points to verticalisation, which is anticipated to become more prominent, with over 50 per cent of products to be vertically focused by 2030.
There’s a lot in the offing. “The emerging categories include SaaS, which could be viewed as a shooting star,” explained Alogonomy CTO Atul Batra. “Convergence of software and hardware through devices and drones is something to watch out for. Real-time updates and data-driven information will transcend all categories. The use cases from these emerging categories may be mind-boggling.”
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