Indian software outsourcing companies are providing offshore software development for over a decade. That has matured offshore software development process and now, with the rise of rupee against the dollar, cost advantage is getting lesser. To counter this, Indian companies are required to offer business process consulting and product development services rather than just providing coding services offshore. Many Indian companies like i-Flex are trying to get a market in product development and move up in the value chain.

With Indian companies trying to move up towards the niche markets, outsourcing product development is emerging as a very attractive market for them. Software outsourcing for product development is the latest trend catching up and many established as well as startup companies are going for offshore outsourcing for their product development. Startups funded by venture capitalists ask for Indian outsourcing first. Many VCs are funding entrepreneurs who have good knowledge of their domain and who partner with Indian software outsourcing company to provide low-cost high-quality solutions.

Startups who want to do product development comes with just requirements and vision. This becomes a very challenging task to create a successful product from it. And Indian companies are getting substantial experience with offshore product development. Europe has especially not enough skills for product development. Many European companies are increasing their product development to India. India has a wide talent pool. So offshore product development is going to increase and will become the main trend in the year 2005.