INDIAN SOFTWARE 

The following essay was written by my friend, Mr Siddharta Chandra in 2000. He has worked as a software developer (full life-cycle) in India and is currently working in Boston, USA. He read BEng (Hons) Electronic & Software Engineering at the University of Leicester, UK and graduated in 1997.

INTRODUCTION

The single largest industry that has spawned in India after economic reforms in 1991 has been software. Today, Bangalore in southern India is one of the biggest software hubs in the world. More recently, another southern Indian city of Hyderabad has made its claim to fame by being the only development centre for the Microsoft Corporation outside of the USA.

In the early and mid 1980s, Bangalore witnessed an unprecedented boom in the number of technological related companies, which moved their operations to that city. That boom sustained in the early '90s and was given a further boost with India opening up its economy in 1991.

Quoting, The Times of India, 4 November 1998, Bangalore has found a place among the top 10 techno-towns in the world along with Boston, Washington and the Microsoft City – Seattle, says American news magazine, Newsweek. Bangalore, says Newsweek, has two hundred and fifty hi-tech companies among which Texas Instruments and Infosys are anchor companies.

The "liberalization process", saw the entry into India of many multinationals. Many of these multinationals were technology-based companies and recognizing the boom in Bangalore, they decided to start their operations in India.

This led to further competition in the domestic software market and a tremendous improvement in the quality of software because of that competition. It also saw India exporting software to most of the developed parts of the world and making its mark in the software map of the world.

Quoting, The Times of India, 7 November 1998, Indian software industry has generated an export revenue of Rs. 5,090 crore (approx. $1.3 Billion ) in the first half of the current fiscal year (1998-99) as against Rs. 3,074 crore (approx.$683 million) clocked during the corresponding period last year


REASONS FOR THE BOOM

The major reasons, why the software industry witnessed a boom in India are the following –

Cost – Given the amount of skilled labour available in India and programmers available almost on demand, the production of computer software in India is significantly cheaper and more cost effective than development of that same software in developed countries.
On average, an American programmer is paid 6-7 times more than an Indian programmer is. Therefore, it is extremely cost effective for companies to have their software developed in India. Although the salaries of software programmers and designers, has gone up in India during the last 5 years, it is still way behind the salary levels of the West. Hence, cost-effectiveness is (and will for some time to come) a major factor influencing software companies to relocate to India.

English readily spoken – Almost all Indians who have had sufficient higher education, to program software, have the ability to read, write and speak fluent English. English is the only language that is spoken in all parts of India. In corporate India, English is the official language of business, thereby marking a significant difference from other countries experiencing similar booms, e.g. China.

Low Infrastructure cost – The creation of computer software doesn't require huge manufacturing plants or factories. An office space, adequate power supply, computer hardware requirements and sufficient man-hours are enough for a software company to start responding to client orders. This is of key importance, since India, being a developing country, still lacks the infrastructure levels of the developed parts of the world.

Reputation – Indian software companies and their software have acquired a fair reputation in the worldwide market for quality and effectiveness. This had happened due to the growth of this industry and market consumption of the software. Today, demand is high in the world wide software industry and for this reason, a good reputation would inevitably lead to more business opportunities.


INSIDE THE INDUSTRY

The main focus of most Indian IT companies is client solutions. Since most of the companies, which provide software solutions, are fairly new, they are willing to analyse shortcomings in their companies quickly and make efforts to adapt to changing requirements.

Networking

There are many firms in India, which are now trying to "computerize" their operations, which is creating a big demand for networking solutions for offices. NT server, v4, is currently the biggest operating system being used in offices. Intra-office E-mail is picking up in a big way, and therefore, companies, which can create complete networking solutions for an organisation, are booming.

Databases

This is possibly the biggest and most profitable part of the industry. Almost all Indian companies (IT and non-IT) want to create databases of their own. In the initial stages, there were some companies, which would provide database facilities like warehousing of records, etc. to most other companies. But with the increase in the number of companies, the individual firms have started maintaining their own databases.

With Oracle and Sybase being the two biggest players in the Indian market at the moment, most office records, files and documents are stored on Oracle and Sybase databases. MS SQL Server is a new entrant into the market and holds a great deal of promise.

The creation and maintenance of these databases has been the part of the industry that has created the maximum number of jobs for programmers and designers alike. Today any medium to small IT firm, has at least 1 department in charge of its database, along with a Systems Administrator. The awareness of the power and flexibility of databases has also led to many development firms opening specialist branches for handling database development. Some companies have gone further to become completely database centric providing all database solutions. Most local IT firms hire database professionals.

Along with the domestic boom, database solutions are also being made for a large number of foreign firms, making the field of databases the most burgeoning of all among the software industry.

Initially, most of the work in the database industry was focussed on changing existing databases from, say, DBII to Oracle, v7. But with new firms coming up, the focus has shifted to new databases from converting old ones into new. This has given rise to a large number of design firms who specialise in the creation of (Relational DataBase Management Systems) RDBMS solutions for companies. A host of such companies are also in the forefront of providing solutions for firms in the West, which might be discovering RDBMS concepts also.

The latest trend in the industry here, is converting RDBMS solutions to OODBMS (Object Oriented DataBase Management Systems) solutions. This has picked up considerably in the last year.

RDBMS and OODBMS are two areas of the database industry, where significant design and analysis work is done before the coding process starts. This branch of the software industry is specifically more attractive for designers, than for programmers.

Microsoft

Much before Microsoft's new announcement of setting up its only development centre outside the USA, in Hyderabad, software firms existed in India, specializing in Microsoft solutions. A large number of Microsoft Certified Solution Providers (MCSP) companies have been working in India for about a decade now. As a result, India abounds in the number of Microsoft Certified Professionals (MCP). A large number of the IT professionals, who go to the client firms in the West to provide solutions, are among these.

Visual C++ and Visual Basic are two of the most popular compilers here. With the growing number of firms getting networked using NT Server, the demand for Microsoft trained professionals for administering and maintaining these networks is growing at a rapid pace. There is also an enormous demand for firms, which can provide Microsoft specific solutions for their networks. MS Access is widely used. More recently, Visual J++ has also been gaining prominence as a compiler.

There are specialist firms in most cities which train professionals in concepts of COM, ActiveX and such.

There has been a big rise in the number of firms, which provide Microsoft specific solutions for firms in the West. These companies are solely made for sending their software abroad and they don't serve the local market at all. These companies come under the category of 100% export oriented units. These companies exist in clusters. In most cases they share their infrastructure, including power, telephone lines and sometimes even hardware. A cluster such as this is commonly referred to as a STP (Software Technology Park). A typical STP can house as many as 100 export oriented units.


PROBLEMS AND HURDLES

Although the domestic software industry has grown within India at a phenomenal rate, the share of Indian exports (which earns precious foreign exchange for the country) has grown at a much lesser pace.

Quoting, The Times of India, 7 November 1998, according to the National Association of Software and Service Companies (NASSCOM) survey, Indian software exports grew at a rate of 65.5 per cent in the first half of 1998, as against a growth of 61.2 per cent in the similar period last year.

Among the main problems faced by the Indian software industry are the following –

Infrastructure – This is the biggest problem faced by the software industry in India at the moment. This is because; although the software industry doesn't need too much investment in infrastructure (see above), India still fares poorly in terms in physical infrastructure available for the development of industry. A computer in India, invariably requires the purchase of an UPS (Uninterrupted Power Supply) unit. This is because of an erratic power situation, both in terms of voltage and supply. With the Internet becoming the focal point of development now, Indian IT companies are finding it hard to cope. The reasons for this lies in two areas –

There are not enough firms in India, which provide Internet services. The ISP (Internet Service Provider) industry still rests in the hands of too few. (This situation may be changing though, even as I type this).

Poor quality of telephone lines, in terms of bandwidth and availability. Modem connections to the Internet, in India, usually allow a maximum connect speed of 28.8 KBPS.


As a result Internet connectivity in India is still dismal. And this is a major stumbling block for the future of the industry. IT companies, realizing that the days of stand-alone development are probably are at an end, are making substantial investments in telephone networks. Most major companies in India have set up their own infrastructure. These include setting up of UPS units for an entire office and leasing telephone lines to make them available for the sole purpose of accessing the Net (leased lines). This makes the initial cost of setting up a software company bigger than necessary.

Focus – Most of the IT companies, that have spawned in India, have made it because of the demand for Y2K solutions. Several companies in the UK and USA have found it more cost-effective to have their Y2K solutions developed in India. As a consequence, most if the IT firms here are having a hard time, diversifying into more concrete and permanent areas of growth. Most software firms here and industry analysts have recognized this aspect. Also, since most of the companies focus on client-related software, there is little or no in-house development. This, coupled with frequent changes in clientele, makes it difficult for companies to cope with new technologies and new areas of development. Companies have been known to fold, because of changes in clientele. The solution for this problem has been conceived as "increased focus on in-house development." Industry analysts say that if in-house development is given priority, it would lead to a much wider and stronger skill base on which the company can rest, thereby making it easier for companies to change focus in times of change.

Body shopping – Some of the biggest software firms in India have been generating a fair amount of their income through sending people to work on solutions abroad. These people travel to the place where the solution has to be installed and work on the solution there. This is a possible source for "brain drain", since the firms for whom the solution is being created then try to hire these professionals on a permanent basis. This sometimes leads to the consultancy firm losing out on the services of the professional. IT companies in India, recognizing this problem, have decided to work on solutions in India, rather than send the professional to the concerned firm.

Hardware – Compared to the software industry, the hardware industry in India is less developed. Parts of computers are still quite expensive and firms, who assemble computers and sell them, have to buy those parts at a fairly high cost.


CONCLUSIONS

The Indian software industry definitely holds a lot of promise. Because of a large educated pool of programmers and IT professionals, there is no dearth of skilled labour. Also, the industry is being actively supported by the successive governments in power and has received considerable support. With the entry of a large number of multinational companies in the IT field, including majors like Microsoft, IBM, Fujitsu Inc., Oracle and Sun Microsystems, competition in the Indian software market is vigorous and expected to grow. Also, with many companies exporting software and investing in in-house development, companies are becoming more flexible and resilient in a changing market.

The future of the industry depends to a large extent on the ability of companies to provide Internet facilities and the cost of providing the facilities. This is a sphere in which India is lacking, (at least that's what Bill Gates, Chairman and CEO, Microsoft Corp said, on his visit to India in 1997). He visualizes India as a "software superpower" if India makes all the right investments. Depending on all the factors mentioned above and some more, India could become the second largest exporter of software in the world, after the United States, in the 21st century, but only time will tell…