On with the new

With IT product companies breaking from Nasscom to form a think tank, the industry takes its next step

India's celebrated $100 billion IT and software services industry has been in a kind of a funk for the last couple of years, with unanswered questions about where it is headed and what its future is. Now, a small chunk of the same industry is veering off in a new direction, holding out the promise of something exciting.

A website called www.ispirt.in quietly went live yesterday, its muted launch no indicator of the big changes that the founders of iSpirt hope to bring about. The founding group of 30 at iSpirt (the Indian Software Product Industry Roundtable) includes a few successful technology entrepreneurs, some savvy veteran technologists and a venture capitalist or two. Among them is Bharat Goenka, whose iconic Tally business accounting solution was conceived in the 1980s and Naveen Tiwari, whose mobile ad network InMobi is a global player.

The group iSpirt calls itself a "new-generation think tank" and hopes to bring about the transformation that will spur the growth of Indian product companies to a new level. In the process, the hope is that India can rebrand itself within the decade as the land of software products.

The new model is in keeping with the pervasive mood in the country, where old structures are begging to be dismantled and newer ones are being conceived on the fly. Aptly, the think tank for India's technology product companies has emerged from the country's tech hub, Bangalore.

Sharad Sharma, a former head of Yahoo!India R&D and a part of iSpirt's founding team, likened the current Indian technology industry scenario to a conservative Indian joint family of the Bollywood kind, with multiple siblings sharing a kitchen and television and living under the same roof (Nasscom). The oldest one studies hard, gets into a top law school, aces his exam and becomes an ultra-successful lawyer. Two later siblings follow in his footsteps. Sharma equated the oldest sibling to the largest and oldest IT companies and the ones thereafter to second-tier IT companies and ITES (BPO) firms.

Over time, there is a noticeable generational shift. The two youngest siblings relish non-vegetarian food, wear jeans and one even stays with his girlfriend and wants to be an artist. There, Sharma drew a parallel to India's mobile and internet businesses. "The family has suddenly woken up to the situation and there is talk of providing separate floors to each brother... but with a common kitchen with authentic Thai and Italian cooking", he said, alluding indirectly to the restructuring in the offing at Nasscom based on recommendations by Infosys chairman emeritus Narayana Murthy.

But among players within the product ecosystem, there is a feeling of urgency that the industry is at a crucial turn. It has to capitalise on the opportunity to sell Indian software products to Western customers, and take it beyond that and help transform small- and medium-sized businesses and, in turn, the Indian economy. "Success will create a new generation of software product companies that will use their India customer base to disrupt global markets and carve out leadership", said Sharma.

Interestingly, Nasscom's own numbers corroborate the dynamism in India's product scenario. "Nasscom has a bumper crop of new product companies enrolling as members", its president, Som Mittal, said. The 1,300-member trade body had 300-plus product companies as members until last year but in 2012-13, a further 100-odd new members signed up. Nasscom's recent product conclave in Bangalore a few weeks ago attracted 1,600 participants.

As a testament to India's changing technology landscape, new product companies are sprouting up daily in Bangalore and other Indian cities, enlivening the start-up ecology. Cloud computing has lowered entry barriers and companies are building products with much less capital than before. Product development is coming from smaller, disruptive companies. Products are being sold as a services to new customers acquired over the internet, blurring the distinction between software as a product and software as a service. All this augurs well for the growth of India's software product companies.

Product companies say they have been in self-help mode in the last few years. Fittingly, iSpirt too will mould itself as a self-help think tank that is largely collaborative, community-owned and modelled along open source lines. It will address government policy, catalyse the market for software products and create mature product companies. The think tank's membership may overlap with Nasscom, but its DNA will thus be vastly different from the trade body's, say its founders.

The technology industry needs both trade bodies such as the quarter-century old Nasscom, and new generation think tanks — one to tackle issues like visa caps, and the other to sort out challenges like on the intellectual property front. In India, there is room and necessity for both.

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