Indian ITeS firms diversifying into products, says Nasscom

Information technology industry body Nasscom says that small and medium businesses could contribute $700 billion to India's GDP in the near future; and if even 2 per cent of this ($14 billion) of this could be tapped by Indian product companies, it would still be a big amount.

Addressing a press briefing on the eve of Nasscom's Product Conclave 2011 on Tuesday, Sharad Sharma, co-chair of the conclave, pointed out that several Indian software product companies now command or are close to commanding valuations of $1 billion, showing that software companies are diversifying in a country whose strength has so far been mainly in IT services rather than products.

"Every year I expect at least one product company to hit the $1 billion valuation mark. Those like Zoho and Druva Software are in line to become billion dollar companies," he said.

Sharma on behalf of Nasscom offered to build an ecosystem for the IT product industry in the country. ''Nasscom can help in three ways. We can bring the industry together, help companies in areas like mentoring and market access, and also assist with policy advocacy,'' he said.

He said an interesting factor in the growth of IT product companies is the aggressive push towards tier II and tier III cities, as India's smaller cities are known in marketing parlance.

According to Nasscom, the number of product firms from tier II and tier III cities has almost doubled in the last three years and currently stands at 330 companies.

As part of the launch, Nasscom also showcased 10 companies with innovative products. These included Paawa Software, which has created a solution for sharing files with Gmail with access control, Ozonetel with its cloud-based telephony platform, and NRich Software which offers solutions for diabetics, among others.