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TECH TALK: The Indian Software Factory: The Indian Software Factory : Opportunities for India

July 6th, 2001 · No Comments

India has been a source of many innovations. As pointed out by CK Prahalad in his acceptance speech for the Lal Bahadur Shastri National Award for Excellence, India has ice-cream cones for Rs 5-6 (HLL and Amul), a Rs 1000 banking deposit (Citibank’s Suvidha), a Rs 200 logistics service/month (the Mumbai dabbawallas) and a Rs 500 cataract surgery (Aravind Hospital in Madurai).

Says Prahalad, “The most intriguing thing about India is its sheer size and the nature of problems facing the bottom of the pyramid. Each one of the problems can be turned into a major test bed for innovationShould we believe that it is the poor at the bottom of the pyramid that are not ready or the elites of India who are unwilling to change their beliefs about the opportunity? India is not opportunity or resource starved but starved of imagination. We have to start with that assumption we have to create a global laboratory for innovations for the world’s poor.”

Indian software companies are well-positioned to take on the challenge for creating software for the world’s corporate poor. They have the talent, the capital to make the necessary investments, the understanding of business processes, and a local market. What is needed is a change of mindset, and that may turn out to be the hardest thing to do.

In India, IT-enabled services are seen as the next big opportunity. Yet, there is very little differentiation in the types of the services offered or the markets targeted. People Arbitrage by itself can only take a company that far. Whether it is software services or IT-enabled services, the toughest part is getting the customer. While the Global 10,000 companies may be very alluring, they are also the ones for whom the outsourcing decision is also the hardest, because they have many options.

Targeting the enterprises at the bottom of the pyramid may seem counter-intuitive, but makes sound business sense. The software solution works as the entry point – it is just the start. There is potential to downstream the relationship built through providing software to outsourced services, targeting the same enterprises for people-intensive requirements.

My guess is that the next few years will see India leveraging this software opportunity, but it will be driven by entrepreneurs who come together with a missionary zeal to make a difference, and build a sustaining, profitable, business by targeting the bottom of the enterprise pyramid. The Internet has created a discontinuity in the world of software, and therein lies opportunity for the ones willing to take the risks, and envision a different future. One can draw inspiration from the motley village cricketers of Aamir Khan’s “Lagaan” who through sheer grit and determination beat the British. Rather than follow, India and Indians must aim to lead and win.

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