“We are very bullish about their international expansion as global markets are opening up for Indian product companies,” said Ramkumar Narayanan, chairperson of Nasscom Product Council.
Software products could mean customer relationship management or enterprise resource planning tools built by companies like Zoho Corp, Freshworks or Tally Solutions. Also, licensed software products built by Indian companies such as Infosys and Ramco Systems for core banking and payroll management come under this definition.
This market is estimated to be $13.3 billion in annual revenue for the financial year ended Thursday, after growing at an annualised rate of more than 10% in the previous three years. The growth of global market share for Indian software-as-a-service (SaaS) companies has also doubled during the same period.
Around 40-50% of the total spending on software products in fiscal 2021 had come from startups and new-age companies with 100-1,000 employees.
“We want to enable the software products ecosystem from India to become as relevant as the IT services ecosystem which currently brings over $200 billion of annual revenue,” said Narayanan, who is also managing director at VMware India.
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The demand comes from enterprises that are replacing their legacy processes and reducing human interventions with SaaS solutions across human resources, logistics and finance functions. The products are also used in treasury management and sales forecasts by employing deep tech.
The industry body estimates 40-60% penetration of deep tech in software products by 2030, where trends such as artificial intelligence and machine learning are seen to become prevalent.
The global enterprises and small and medium businesses are preferring Indian players because of customised or transaction-based pricing, giving customers the flexibility to buy and slowly scale the solutions across geographies, the report said. It is more beneficial than earlier models of licensed or subscription-based pricing.
Also, the cloud-ready nature of these products makes them cheaper in terms of storage, while the technology companies release product updates and upgrades over the air through the cloud. Certain products also involve no setup or employee training costs.
As much as 80-90% of global enterprise buyers are looking for cloud-based solutions enabling scale and ease of deployment, according to the report.
