Third wave of local IT products hits shore

Nasscom lists 652 firms leading the Indian product software charge 10/15/2009

C Chitti Pantulu
Bangalore

Call it the 'Nanofication' of the Indian software sector if you will, but the lumbering elephants of the industry are waking up to the new reality of nimble, fleet-footed product startups that are giving them a run for their money.
Apex industry body Nasscom has identified 652 such companies in the country that are at the forefront of what it calls the third wave of Indian product software and is seeking to put in place an ecosystem that supports them and takes the Indian software story forward.
Long dubbed a failure, the Indian software products story has suddenly turned hot.
If pure-play products players such as iFlex, Subex and Tally, and some products such as Infosys' Finnacle were the first wave of the Indian products story, the second wave had a clutch of 100-odd venture-funded startups, which, too, failed to make a much of a mark on the scene.
It is now time for the third-wave players, which are riding the cloud, the great technology leveller that has unleashed new concepts such as platform-as-a-service (PaaS), software-as-a-service (SaaS) and is opening up new possibilities.
"In the cloud, you can hire the horsepower if you have the brainpower to generate a new class of applications," says Sharad Sharma, former Yahoo India CEO and now entrepreneur in residence with Canaan Advisors Pvt Ltd.
For the first time, the cost of customer acquisition is falling while cost of product development has plummeted.
Hardly surprising...