Suggestions For The Indian Software Product Industry

Lamenting on the declining revenues of the Indian software product industry, this article in today’s Economic Times puts the blame on long sales cycles and lack of preferential treatment for this industry in Indian government procurement contracts. It goes on to share a few thoughts – increased R&D funding, government subsidies, and so forth – for driving greater success rate for the industry.

I found a few points conspicuous by their absence and had wanted to highlight them by way of comments to the original article. However, since I couldn’t get the commenting feature on the website to work despite several attempts, let me use this blog as the bully pulpit from which to air the following suggestions.  

  1. Marketing, marketing, marketing: According to anecdotal evidence, for every $X invested on product development, a typical American product company spends $3X on marketing. Whereas most Indian product companies seem to begin with the misguided notion that “if you build, they will come”. By the time they realize its importance, there isn’t much money left for marketing (or for anything else, for that matter, as it appears from the fact that almost 20% of companies in the industry reportedly downed their shutters last year). Instead of reaching out to external marketing solutions providers and treating them – including my own company GTM360! – as commission agents at that late stage, product companies would do well to factor in some marketing dollars right upfront into their business and funding plans. 
  2. Realize fundamental differences with the services model and stop asking prospective customers about their requirements during the initial interactions with them. Since products come with prebuilt functionality that prospects expect to find useful regardless of their specific situation, requirements gathering should be postponed to the later stage when the vendor is required to submit a fixed price proposal for implementation and customization services.
  3. Appreciate that customers buy a product not for the sake of the product / technology but to drive a certain business process, which can only happen when the product lands safely into their system landscape that comprises of many existing applications. To do this calls for deep systems integration skills. Since the typical DNA of many product firms precludes development of such skills inhouse, most of them would be better off by striking partnerships with third-party SI specialists.

Having worked for and advised some of India’s leading software product companies, I believe that implementation of the aforementioned suggestions would help improve the success rate of the Indian software product industry. Click here to find out more about GTM360’s offerings for this industry.

One Response to “Suggestions For The Indian Software Product Industry”

  1. Rajeev Jog says:

    Having worked in marketing at several US-based software companies I would have loved to have had 3 times the product development budget!

    In practice I think the ratio is more like 1x or 1.5x which is still probably higher than what Indian companies spend.