After IT services, Indian players are eyeing the product development market to move up the value chain.

Over the years, the Indian IT industry has established itself as a strong player in the global arena through its strong domain knowledge and renowned legacy of highquality with lowcost IT services. Amidst the expansion of global market for electronic devices due to increasing levels of convergence, digitization and cost reduction have played key roles in driving the industry into the higher end of innovation like product development, embedded systems and software productsthe key segments of the software R&D sector. India, being an application service provider over the years, is now emerging as an outsourcing hub for product development.

Global productbased companies such as IBM, HP, and Texas Instruments have engaged in outsourcing some of their lowend product development activities (coding and testing) to India since the early 1990s. Subsequently, global independent software vendors witnessed some tough time going by the volatile market conditions. These developments rushed them to upgrade and expand their product offerings at reduced costs.

However, by that time most of these players realized that there was only little scope for further cost reduction by operating within same business model where the growth was constrained by falling profitability. On the other hand, the rapid expansion of communication modes made them to conceive an alternative solution in the form of offshoring. India seemed to be the ideal partner for their business. Moreover, they realized that India had worldclass infrastructure and process excellence through Capability Maturity Model (CMM) and six sigma programs and positioned itself as a key contender in the growing offshore software product segment.

The Analyst Magazine, Software Product Development, Indian IT Industry, Global Markets, Product Development, Embedded Systems, Texas Instruments, Capability Maturity Model, CMM, Original Equipment Manufacturers, OEMs, Taiwanese Manufacturer, Indian Business Ecology, Infosys Technologies, Offshore Product Development, OPD, Financial Management.