ABSTRACT
Indian software services exports have been growing at a spectacular rate for over more than a decade now. Global resource shortage and labour arbitrage have often been cited as reasons for this growth. In this paper, we go beyond these arguments in explaining this phenomenal growth that is remarkable due to its consistency and resilience in the face of technological and business volatility. In the process, we identify a series of complementary and continuous managerial innovations witnessed in the industry that resulted in creation of superior customer value. The industry exhibited dynamic capability in continuously morphing its business proposition, first by facilitating optimal usage of client resources and subsequently enabling diversification of risks arising out of technology churn and business volatility. Therein, we believe, ties the true explanation for the industry's ability to convert a limited opportunity window into a sustainable business of global proportions.
INTRODUCTION
Indian software services exports have grown at a spectacular rate of 42% over the past fifteen years. While the volume of growth, from a mere US$ 52 million in 1987-88 to US $ 10 billion in 2002-03 is spectacular by itself, what is noteworthy is its consistency in the face of rapid technological changes and business volatility. Moreover, this remarkable growth has come from a nation that had significant disadvantages associated with emerging economies, such as inexperience in building a global industry, weak domestic market and 'country of origin' risks associated with less developed countries like India (Cordell, 1992).
India's software exporting industry is one of the world's successful information technology industries. Begun in 1974, it employed 345,000 persons in 2004 and earned revenue of $12.2 bn, equal to 3.3% of global software services spending.
Types of software by usage:
Types of software by customization:
Software is either (1) written for general use and replicated in its original form across many users, or, (2) written for a specific user. The former is termed a software product or package. It may be shrink-wrapped and transported physically or over the Internet. The latter is termed custom software. Being made-to-order, custom software is more geographically constrained that products, i.e., proximity to the user is more important. Because of this, software products are more readily exportable
than custom software. System-level software is the most complex as it manages the interfaces with both hardware and higher level software; applications software is the least complex. Nowadays, all system level software are products. The more varied an end-user's
needs from another end-user, the more likely is the software to be customized. Since variations in needs appear most at the stage of applications, most customized software is applications software. Custom software is part of a larger category called software services.
THE INDIAN SOFTWARE AND SERVICES MARKET
The IT Software and Services export segment has a very crucial role to play in the overall IT market in the country. The IT Software and Services exports has greatly contributed to the IT sector which enlarged from US$ 1.73 billion in 1994-95 to a US$ 13.5 billion industry in 2001-02. NASSCOM also forecasts a future growth of 30% for FY 2002-03.
PESTAL ANALYSIS:
Ø Political:
Ø Economical:
BREAK UP OF TOTAL GLOBAL SOFTWARE SPENDING
Ø Social:
NO. OF SOFTWARE GRATUATE IN INDIA
Ø Technological:
Ø Legal
Ø Environment
THE INDIAN INTERNET MARKET SCENARIO
Overview
CONCLUSION
In this paper we show how the Indian software industry, by means of continuous and complementary innovations, was able to create superior value for their customers in a rapidly changing business environment. The dynamic capability that the software industry exhibited in continuously morphing their business propositions, first by enabling optimal usage of client resources and subsequently diversification of risks arising out of technological churn and business volatility, helped them to convert a limited opportunity window into a sustainable business of global proportions. We believe that ours is a first attempt to go beyond the traditional explanations of growth of this industry, which largely centered on country specific advantages. Likewise the Indian software industry faced serious challenges in terms of its inability to retain world-class scientists and researchers, distance from key markets, inadequate capital and adverse perceptions associated with the country. However, the industry overcame such formidable obstacles by making a series of organizational and managerial innovations that enabled them to create a world class service delivery model in one of the most dynamic and volatile industries in the world.
