India As A Major Force In Software Product Development

India is almost certain to have a major role as a center of software development is the ringing theme that I hear from multiple sources. Already companies like IBM, Microsoft, Oracle, and SAP, already tap Indian talent not just to crank out code but to help design and develop commercial offerings, not to leave out Google & Amazon. I am aware of several product companies planning to move part of engineering work to China in the next 1-2 years. Oracle recently announced the acquisition of iflex. Increasingly, Indian software enterprises want to put their own companies names on product labels, at home and abroad, by capitalizing on their country's highly educated and low-cost workforce to build and sell software for everything from back-office programs to customer-facing applications. It could have far-reaching consequences for software prices worldwide. India's IT-services industry, and their development teams bring with them the disciplined Six Sigma and CMM-I approaches to quality management and experience with Web services and hosted applications to the products they develop. It's a mind-set that fits well with the business world's slow march toward more services-oriented, Web-friendly IT architectures.
The large IT-services enterprises want to grow faster - shareholder pressure is forcing them to look at areas of higher-margin software business. (IBM's gross margins, for example, are 26% for services and 87% for software.) Competition for talent is another dampener for growth. Only a small percentage of the talent pool of IT workers in India has experience building or managing software companies. The Indian IT diaspora could fill in to an extent – fact remains homegrown talent has demonstrated great global success in the services sector(many overseas Indians/other nationalities have difficulty in recognizing this – there are many expert commenter available dishing out free advise). The VC ecosystem in India also needs to develop the way it did in Silicon Valley to provide a nurturing environment for growing companies. The market for software with "Made In India" tag just getting started, but there's no telling how far it can go. But fact remains that India has not so far seriously applied in developing products – it requires a concerted approach – identifying stack elements to truly product aligned marketing & sales. India also needs to think big and act fast – lot of opportunities abound – from web 2.0 related opps, web services, SOA, RFID, Mobiles, Gaming – floodgates of opportunities are open – India Inc needs to get into this right earnest – the window of opportunity may not be open for a long time. The rate of innovation and ability to move first/fast into a space would be the paramount criteria.