labels: Nasscom
Software revenue to grow to $12 billion by 2015: NASSCOM news
12 August 2008

NASSCOM has released the findings of the 'NASSCOM Software Product Study: Outlook for Indian Software Product Businesses' at its second annual product conclave in Bangalore.

In a product expo held by NASSCOM, wherein for the first time companies could display and demonstrate its products to delegates at the conference.

According to the report released by NASSCOM, software revenue would touch between $9.5 billion and $12 billion by 2015, compared to $1.4 billion in 2008.

The report said that over the past three years, the annual revenue aggregate of Indian software product businesses had grown at a compounded annual growth rate of 44 per cent.

It also noted that leading software product firms had strengthened their product portfolio through steady investments locally, as well as through overseas acquisitions.

India is forecast to be the world's fastest growing IT market over the next few years, with its share of the global software market growing threefold by 2015. Increasing IT penetration across small and medium businesses (SMBs) and the government / public sector are likely to be the key drivers of this growth.

Recent trends in market activity aided by a maturing ecosystem indicate that Indian software product businesses are now approaching an inflection point in their evolution.
The next decade will be a period of disruptive growth for this segment, with the annual revenue aggregate of Indian software product businesses forecast to grow from US$1.4 billion in FY2008 to between $9.5 billion to $12 billion by FY2015.

The installed base of software product development talent in India currently consists of about 140,000 professionals. Of this talent pool about 68,600 are engaged with MNC centers, 53,200 work with vendors and about 18,200 work with the Indian product development firms. A large chunk of the talent in MNC R&D centers is engaged in product development in the enterprise products, telecom & networking verticals

Over the past two decades, India has emerged as a global hub for product research and development (R&D) activity, especially in the technology industry. Today, there are over 600 multinational companies (MNCs) undertaking product R&D in their subsidiaries in India

Of the existing 371 software product start-ups since 2001, over two-thirds have been formed in the past three years – of which 100 companies have started their operations in 2007 alone. As a result, while the top 10 companies still dominate, accounting for 84 per cent of the segment revenues, there are over 200 mid-sized companies and start-ups that have started generating revenues and are contributing to its growth

The report noted that today there were 38 incubation centres spread across the country that are actively focused on assisting technology start-ups with funding and leadership.

Since 2005, total VC investment in India has grown at a CAGR of 42 per cent to reach $543 million in 2007. Over the same period, funds invested in the software products segment have grown at a slightly faster CAGR of 43 per cent, from $76 million in 2005 to $156 million in 2007.


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Software revenue to grow to $12 billion by 2015: NASSCOM