The Indirect India Effect On Global Software Sales

A few days back I was talking to a friend who is in a senior marketing role at a big J2EE vendor. Our conversation moved to how important India was for sales in the J2EE market.


We both felt that India has an impact on sales however it
isn’t one that’s obvious in sales figures. It’s an indirect impact that
vendors can ignore at their own peril.

Indian software service companies today have 1000s of IT professionals working on projects throughout the world in every domain you can think of. Infosys, Wipro, Cognizant, TCS, Satyam, Patni… have got a huge mass of humanity creating and deploying projects using various software products. So for example if Infosys is deploying a banking solution for ABCD bank in Japan and deploys using Oracle database and application server, who do you think decided to use Oracle database and application server over say IBM or BEA?

In all probability, the decision was made by 4 or 5 people sitting in a meeting room somewhere in India. So the sale happened in Japan and will reflect in Oracle’s sales figures there, but the decision really happened in India. So although Oracle’s sales in India would be a fraction of those in Japan, the Japan sale would never have happened if Oracle did not have a major presence in India, one good enough to convince the 4 people in India that using Oracle DB and application server is their best bet.

Many IT service companies in India have partnerships with software vendors and you would see a strange pattern in these companies. Company X might be deploying majority projects on Oracle DB but go over to company Y next door and you might see IBM DB2 being the dominant database. Rarely do customers force a software service provider to use a particular product, so it’s normally the service provider who decides which product to use.

Software vendors have gradually started to realize this and these days spend a lot of money trying to get Indian developers to use and recommend their products. I do not know what the current figures are but I think it makes good sense to put more money into India than the actual sales in India, primarily because of the indirect India effect.

There’s still a long way to go because the India effect seems to have dawned on only a few companies as yet. Also the “cheap labor” tag has stuck India and is one very difficult to shake off. So some vendors seem to treat developers in India as class B citizens of the developer world. I suppose it would also be difficult for mangers to justify their spending in India when the sales in India would not be much.

So if you are sitting in New York and wish to sell a software product to a corporation next door, it might just make more sense to take the India route. It will cost less and is more likely to get you regular sales.

If you have on-the-field experience that supports / contradicts this theory of the “Indirect India effect”, please do share.

Related:
>>
Indian software services company claims “better, faster and cheaper” advantage

>> Recruiting like crazy

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  • ‘Guest’

    There are certainly performance issues when it comes to abstracting layers of management. Spring offers superior performance and a non-intrusvie standards based approach.

  • Noname

    Agreed, the recommendation of software/hardwares do happen to a large extent (ofcourse depending on the kind of project).
    But I have seen over the years that the recommendation process has not been an easy one, the customers too (now) have grown and become more ‘techy’, (thanks to the bugs and stack traces that we show in production).
    Hence the team here needs to justify every use of software and hardware.

  • Noname

    Unless the customer is already hugely invested in a product line, the services company gets to decide or at the least strongly recommend.

    It also depends on whether a project is a new one or an enhancement – integration project.

  • Noname

    in your article. Difficult to read.

    ~Lokesh

  • Noname

    The people who pay money decide.
    and ofcourse we are not in development ,we are in trading (services ????)
    Selling a American (ORACLE) product to a Japanese Bank .
    AND WE ARE SO HAPPY TO DECIDE for them
    HA !!!!!!!!
    so we are winners ……………
    May be India will be the next IT Trading Giant (new term ?)

  • Noname

    [QUOTE] Rarely do customers force a software service provider to use a particular product, so it’s normally the service provider who decides which product to use[/QUOTE]
    I disagree with the above stmt. I work for a software services company and have always found the client driving the technology and related infrastructure.