software services india

8/8/2019 Software Services India

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Agenda

Software Services Overview

Market Players and Competition

Customers Regulatory body and Association

Strategies and Policies

Recent developments


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INTRODUCTION

Software Services are broadly divided into ITand ITES.

IT is the study, design, development,implementation, support or management ofcomputer based information system particularlysoftware's applications & computer hardware

ITES Information Technology Enable

Services, where outsourcing of processes thatcan be enabled with IT & covers divers areaslike Finance, HR , Administration, etc.


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Overview

The growth in the Software sector is attributed to Increased specialization

Availability of a large pool of low cost

Highly skilled

The Supply is matched to the demand Share in GDP increased from 4.8% in 2005-06 to 7%

in 2008.

In 2009, seven Indian firms were listed among the top

15 technology outsourcing companies in the world. In March 2009, annual revenues from outsourcing

operations in India amounted to US$60 billion and thisis expected to increase to US$225 billion by 2020


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Length and Depth

SoftwareProducts CustomizedApplications andWebsites

BPO KPO ITES

GeneralProducts

Websites In-bound In-bound AcrossSectors

CRM Online portals Out-bound Out-bound

Banking andInsurance Need basedsolutions B2B B2B


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Overview - Exports

The Software exports industry displayed agrowth rate of 5.5 per cent in FY2010

Industry accounts for 25% of Indias totalexports and 10.5% of Service revenues

Over 900+ companies in India accountingfor USD 10.6 billion

It is likely to touch $60-62 billion by FY2011 from $31.4 billion in FY07


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Overview-Exports Cont..

U

SD

billion


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Overview - Domestic

Domestic Market is at an inflection point-healthy growth of 12% in FY10

60+ Large transformational deals inTelecom Retail, BFSI, e-governance

Over 900+ companies in India accountingfor USD 10.6 billion

BPO continues to be the fastest 108growing segment at 22%

Government IT spend estimated at INR 150

billion in 2009


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Overview - Domestic Cont..

billi

on

In Rupees


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Exports vs. Domestic


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Exports Share of Total Output


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Software Exports


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Market Players and Competition

Company Full Market Capitalisation (Rs


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Company Full Market Capitalisation (Rs.crore)

INFOSYS TECH. 157,644.13

TCS LTD. 152,761.10WIPRO LTD. 98,956.86

HCL TECH. 25,761.91MPHASIS LTD. 12,551.81

ORACLE 18,092.12FINANC TECH. 6,117.62

PATNI COMPUTERS 7,428.07TECH MAHINDRA 9,130.40

ROLTA IND. 2,694.08
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Top Indian

IT Employers

1,63,700 1,14,822

Genpact

1,12,000 80,300

64,557

42,500

37,119 32,00035,267 39,000
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United States of America:

Federal

Counties and Military Services

Commercial

Retail sector Automobile, etc.

Europe

Federal

Commercial Middle-East

Federal

Commercial

Customers - International


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Government

Departments

All developments programs

Commercial

Banking Automobile

FMCG, etc.

Customers - Domestic


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Regulatory bodies and Associations


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Strategies

IT companies are devising new strategies toward off pressure on bottom lines due torecessionary trends in the US. They are nowlooking at non-linear growth models to shore

up revenues. According to a Forrester report, clients are

looking for solutions that would help themautomate discrete business processes oraspects of product development


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Strategies Contd...

IT and product development service providersare, hence, developing solution accelerators,which are pre-developed software thattechnology and services firms use to automate

a particular business process. Around 30% to70% of the code can be reused across clients.


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Strategies Contd...

In their effort to build solution accelerators,companies will look at mergers andacquisitions. This will help them acquirespecific processes and domain expertise that

plug the missing gaps. "Companies such as TCS, Infosys and Satyam

can't hope to continue growing their headcountas it would be unmanageable.


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Establishment of nodal agency(STPI)

Telecom sector De-Regulation

Progressive Policy reform

Semiconductor Policy

Foreign Trade Policy

FDI Policy for IT

Export Promotion Schemes

Advance License

Policies and Initiatives


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Recent developments

Cloud Computing Virtual Environment

Nanotechnology :

The semi-conductor revolution

High-end mobile phones Memory space for data storage devices can be

increased manifold using this technology

Increase in demand for engineers in KPO sector

Foreign acquisitions and merges

E-Commerce and Supply chain management

Idea Economy


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According to Forbes following are the best countries forOutsourcing:

China

Philippines

Russia

Canada

Mexico

Ireland

Competition

V i bl th t di ti i h I di f Chi


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Labor and Management India China

Professional employment

(median share of totalemployment)

69% 29%

Entry level qualification for

professional employees

Post-graduate degree (17

years)

Diploma or 1stUniversity degree

13-16 years)

Labor productivity

(output per worker)

USD 25,567 USD 29,625

Quality certification (share of

firms with CMM certification)

47% 7%

Effect of CMM certification on

revenue growth

90% Faster No Effect

Technology input: R&D spending

(% of firms with R&D)

72% 92%

Foreign non-equity strategic

alliances (% of firms with)

60.2 11.9

Effect of one more foreign

alliance on revenue growth

6% No effect

English language All Educated Indians are English

speakers and the largest

software markets are English

Language

China doesnt lack software

engineers with sufficient English,

but does lack managers who are

able to work with English-speaking customers

Variables that distinguish Indian from Chinesesoftware firms


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Made greater use of more educated professionals andmore experienced managers without incurring higherlabor cost

Achieved quality certifications to overcome liability of

foreignness Established non-equity strategic alliances with foreign

firms Received direct and targeted assistance from

government, mainly via software technology parks andtax concessions from export earnings

Why India on top


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While until about a year ago top Indian service firmswere charging American companies $75 to $90 an hour,today the figures are merely $6 to $9. Murthy believesthat China will very soon do the same job at about $3 an

hour -- and that will bleed Indian firms to death.

Alliance as a way to leverage and create a win-winsituation for both parties

Future


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India exports about 70 per cent of its software to the USand Europe, while China exports about 90 per cent of itshardware goods to the western markets. But in turn theUS exports 90 per cent of software to China, and 60 per

cent of its hardware to India. If India and China can cometogether, they can not only cater to the entire world, butalso dominate their own domestic markets

Future


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software services india

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