Software revenue to touch $12 billion by 2015: Nasscom

Written by Economy Bureau | Chennai, Aug 11 | Updated: Aug 12 2008, 06:53am hrs
The maturing ecosystem of the Indian IT sector, reaching a point of inflection, promises a quantum growth in the software product business, with a revenue target ranging between $9.5 billion and $ 12 billion by 2015 from a meagre 1.4 billion in 2008, according to a recent report on ''Outlook for Indian Software Product Businesses," released by Nasscom (National Association of Software Companies) at its second annual product conclave in Bangalore. As per the report, the next decade will play a crucial role in bringing about disruptive growth for the Indian software product segment in the areas of disruptive technologies such as virtualisation, Service Oriented Architecture (SOA) and delivery model, web-services, software-as-an-appliance, subscription/transaction /on-demand business models, etc. These have all already helped new entrants build global billion dollar businesses and further promise to sustain the growth momentum to reach the ambitious target by 2015.

According to the opportunity assessment report, the world software product market is poised to grow $537 billion in FY 2015 from $294 billion (FY 2008), with the Indian market having the scope to address $290 to $315 billion worth of the global pie in the same period. The growth engine is expected to accelerate broadly by 3 areas namely ERM (Enterprise Resource Management), BI (Business Intelligence) and storage and security.

Nasscom predicts that the global market from ERM (Enterprise Resource Management) software products is expected to grow from $33.2 billion in 2008 to $59.8 billion in 2015. Driven by SMBs (Small and Medium Businesses), the BI product segment is expected to grow from $7.8 billion in 2008 to $15 billion by 2015 and the forecast on storage software product from $13.9 billion in FY08 to $26.2 billion in FY15. Indian players and India-based product development facilities of MNC companies are expected to make a mark leveraging on the strong base of domain expertise and demonstrable potential of Indian product start-ups, observes Nasscom.

Som Mittal, president, Nasscom said, "The product segment in India has the potential to grow ten times its current size and touch anywhere between $9.5 billion and $12 billion over the next decade." Commenting on the potential of the segment, Subash Menon, Chair Nasscom Product Initiative, founder chairman, MD & CEO, Subex Limited said, "The required growth rate of 30 to 35% to take the industry from its current revenue of $1.4 billion in FY08 to about $12 billion in FY15 seems quite achievable."

Pari Natarajan, chairman Nasscom said, "The Indian software product story has so far been an export story, with 68% of the revenues coming from just exports of these products. However, home-grown software product businesses will surely witness an increase in acceptance in the domestic market, thereby increasing the revenue share from domestic sales from 32% in FY08 to 41% by FY15 to reach $4 to $5 bn."