The newly-created Indian Software Product Industry Round Table (ISPIRT), operating as an offshoot of the country’s well-known NASSCOM, will focus on influencing government policies on software patents and products. It hopes its emphasis on software products rather than services will help promote a technology startup culture in India.
ISPIRT is currently made up of 30 companies, most of them based in India’s southern cities. In comparison, Nasscom has more than 1,200 members. But members of ISPIRT say more than a thousand companies have expressed interest in joining the new group.
The software product industry in India is still small in size compared to the country’s outsourcing/services sector, which has an annual revenue exceeding $70 billion.
“We concede that we are small in size, but we have a tremendous potential to grow,” says Shoaib Ahmed, president of Tally Solutions, a Bangalore-based software product firm instrumental in forming ISPIRT.
Small Size, Big Goals
ISPIRT has three aims: forcing the federal government to reform the country’s patent system; ensuring government agencies consider domestic software product companies while purchasing software products; and persuading the government to reduce taxes on local software products.
ISPIRT is challenged by its current lack of clout in New Delhi. The software product sector employs fewer people, and most of its companies are little known in the Indian public, especially when compared to giant IT outsourcing companies like Tata Consultancy Services (TCS) and Infosys.
But industry analysts say software product companies have a bright future ahead of them, given the way the country’s corporate sector is going high-tech. According to NASSCOM, India’s software product sector has grown fifteen fold over the past two decades, from $113 million in revenue between 1990-2000 to $1.87 billion in 2012.
“The country is going high-tech and there is a tremendous need for software products, but there is a need to create awareness among consumers about what software product they need to buy. And ISPIRT will create that awareness,” Ahmed says.
Interestingly, most of these companies have not obtained patent rights to the products they claim they have developed. Therefore they are finding it difficult to sell their software beyond the borders of the nation. And they have few options to oppose if another company infringes or copies their product.
Therefore, their aim is to tap the domestic market fully before expanding overseas.
“If Indians buy software products generated locally, that will benefit all. You will see a new breed of startups developing software products,” Ahmed says.
It may be true that a minor change in government policy could tip the balance in favor of ISPIRT members. But the biggest challenge is making the government give a hearing to their proposal.
Many software product companies do not seem to have benefited from favorable government policies. For example, the federal government’s guidelines related to e-procurement call on government agencies to prefer domestic firms while choosing IT product vendors. But Indian government agencies rarely abide by such guidelines. ISPIRT members argue there is a need to turn these kinds of guidelines into laws.
The association also plans to build a public stage for domestic companies to share their knowledge and expertise in software development. Such a platform, ISPIRT believes, will give birth to a large number of startups generating thousands of jobs across the country.
“In every successful product ecosystem, people have built on each other’s ideas and playbooks. There would be no Google but for Stanford University and no Cisco but for DARPA…” the ISPIRT said in its statement