software outsourcing

A blog related to software development company and offshore software outsourcing

Wednesday, December 21, 2005

Software Development India

Offshore Software Development (OSD) is the next big thing for the Indian Information Technology companies. The IT companies are geared up to tap this huge market. The Offshore Software Development market globally is worth more than $20 billion and India has just got about a billion of it. Organizations believe that Software Development in the offshore market will be a specialized service. The companies will invest over the next few years towards infrastructure, manpower, technology and training to garner a larger pie of the Offshore Software Development market.

Software Product Company generally spends about 20 to 25 percent on Research and Development, as it is their bread and butter, they feels that at least 50 percent of this work should come to India if not 100. Offshore Software Development will go closer to the customer where the cost-saving is not because of lower wages but due to higher expectations.

Today the entire industry works on wage parity, but this will not be for long. India is paying almost the same wages that are paid to employees in the US. The gap is certainly narrowing in Software Outsourcing.

India has emerged as the new haven for high-technology investments. It’s just been few years since the report of 2002 projected the magical size of nearly $80 billion for India’s Information Technology Industry by 2008. Industry revenues at that point were less than $5.1 billion. India is set to corner about $60 billion of the global Offshore Outsourcing business that will generate an over $300-billion market by 2010.

This is just 10 per cent of the addressable market. With better infrastructure and additional spending in the range of $700 million to $1 billion, the IT-Business Process Outsourcing sector can tap about $150-180 billion during the next five years. The industry will generate more than 1 crore direct and indirect jobs by 2010. By that year, India will be teeming with a graduate pool of more than 17, 73,000 in the age of 20-35 years. So, would there be a problem in securing manpower? No. Only securing “suitable manpower” would be a handicap.

Future of Offshore Software Development in India by some giants of world

Microsoft founder Bill Gates announced a visit to India and plans to invest nearly $1.7bn that will create more than 3,000 new jobs over the next four years. The Software giant already employs some 4,000 IT professionals in India. At the same time, Intel said it would invest more than $1bn in India, most of which would be for a new research and development centre in the southern technology hub of Bangalore. In October 2005, Cisco announced $1bn for new Indian start-ups and for leasing and financial solutions to its customers and partners.

We can proudly affirm on the point that India’s Offshore Software Development sector is the fastest growing area of the economy over the past decade, posting an annual average growth nearly around 40%.