IT firms’ biz model could pose threat to growth

Feb 25 2013, 01:50 IST
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SummaryIndia’s software services firms embarking on developing products and platforms in a bid to get more lucrative revenue streams will find their biggest challenge coming from their own existing business models and the need to meet market expectations on a quarterly basis.

five to seven years, which would imply some “inorganic growth because organically it is not easy to grow at that rate”, Purohit said.

However, many analysts privately wonder about the seriousness of product strategy by Indian IT companies as many of them do not boast of any board representation of individuals from such backgrounds. The presence of board members coming from a products background would certainly provide the strategic push. Industry experts feel that one of the biggest challenges these companies will face is getting the right kind of talent. Indian companies are used to picking up talent from engineering colleges or rival firms but they will have to really hunt for the right set of people who will come at a higher cost when it comes to product play.

However, there are a few who are more confident about the prospects of Indian IT services garnering better revenues from products and platforms in the future. Sundararaman Viswanathan, manager, Zinnov, a consultancy firm, said, “All these service providers have had a history with products and platforms. Infosys, Wipro, TCS have had a culture of software product development. They know what it takes to build and successfully sell a product in the marketplace and hence are quite competent as anybody else in the space.”

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