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Despite the much needed improvement in capital share, it can be inferred that IT serves as a vital catalyst in faster economic growth and increased employment opportunities. Hence, Information Technology is imperative in India’s approach towards the goals and all round economic growth.

What Should Software Companies do to Sustain the Growth?

Software Companies in India like Infosys, TCS, and Wipro, are forced to look beyond coding, testing and providing services. With more than a decade of stupendous growth, these companies are facing tremendous challenges to sustain the profits that they have been able to achieve in the past.

Indian companies need to move up the value chain by attacking consulting space as well as move into the products game. Besides shifting from the core competency of providing solutions to the service sector, another option could be to explore various unexplored regions across the globe.

Indian Software Companies have been focusing mainly on the US for Software Exports, accounting for 17.2$ billion, i.e., 68.4 percent of the total exports. Other 23 percent share is shared by Europe, whereas the miniscule percentage is being shared by other countries like France, Germany, China and Dubai. If India, continues to concentrate on the US only, than over the next five years there could be a structural damage happening to the industry, due to changes in customer demand and geographical environment.

Besides, if Indian Software Companies want to be considered as global organizations, they will have to extend their reach and venture across geographical borders. Infosys and TCS have already done so by setting up a centre in China, and Wipro has done so by acquiring firms in Europe. This is a clear indication of the intention of these firms to globalize and become a world class player.

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* Contributed by -
Manik Kinra,
Batch 2006-07,
Great Lakes Institute of Management, Chennai.