all

1. A
Management Research Project –I
On
“STRATEGIC ANALYSIS OF INDIAN SOFTWARE INDUSTRY”
Submitted To:
S. K. School of Business Management,
Hemchandracharya North Gujarat University,
Patan.
Submitted By:
Name Roll No.
KAMAL PRAJAPTI 23
RAVI RAVAL 26
(December-2017)

2. Table Of Content
• Introduction
• International Scenario
• Indian Scenario
• Strategic Analysis of Industry
• Conclusion
• Appendix

3. Introduction
• SOFTWARE INDUSTRY IS THE MOST FASTEST
GROWING INDUSTRY ACROSS GLOBE.
• THE SOFTWARE INDUSTRY INCLUDES BUSINESSES
FOR DEVELOPMENT,
• MAINTENANCE AND PUBLICATION OF SOFTWARE
• THE INDUSTRY ALSO INCLUDES SOFTWARE
SERVICES, SUCH AS
 TRAINING,
 DOCUMENTATION
 CONSULTING

4. History of Software Industry
 THE WORD "SOFTWARE" WAS COINED AS A PRANK AS EARLY
AS 1953, BUT DID NOT APPEAR IN PRINT UNTIL THE 1960S
 BEFORE THIS TIME, COMPUTERS WERE PROGRAMMED EITHER
BY CUSTOMERS, OR THE FEW COMMERCIAL COMPUTER
VENDORS OF THE TIME, SUCH AS UNIVAC AND IBM.
 THE FIRST COMPANY FOUNDED TO PROVIDE SOFTWARE
PRODUCTS AND SERVICES WAS COMPUTER USAGE COMPANY
IN 1955.
 THE SOFTWARE INDUSTRY EXPANDED IN THE EARLY 1960S ,
UNIVERSITIES, GOVERNMENT, AND BUSINESS CUSTOMERS
CREATED A DEMAND FOR SOFTWARE.

5. Cont...
 INFLUENTIAL OR TYPICAL SOFTWARE COMPANIES
BEGUN IN THE EARLY 1960S INCLUDED
 ADVANCED COMPUTER TECHNIQUES,
 AUTOMATIC DATA PROCESSING,
 APPLIED DATA RESEARCH,
 INFORMATICS GENERAL.
 DOS, MICROSOFT'S FIRST OPERATING SYSTEM PRODUCT,
WAS THE DOMINANT OPERATING SYSTEM AT THE TIME

6. Cont...
 ACCORDING TO INDUSTRY ANALYST PARTNER, THE SIZE OF THE
WORLDWIDE
 SOFTWARE INDUSTRY IN 2013 WAS US$407.3 BILLION, AN INCREASE OF
4.8% OVER 2012.
 THE LARGEST FOUR SOFTWARE VENDORS WERE
 MICROSOFT
 ORACLE CORPORATION
 IBM
 SAP RESPECTIVELY

7. Cont...
 SOFTWARE-AS-A-SERVICE, OR SAAS
 SAAS REDUCES THE CONCERNS ABOUT
UNAUTHORIZED COPYING
 NETWORK EFFECTS IN SOFTWARE ECOSYSTEMS
 NETWORKS OF COMPANIES, AND THEIR CUSTOMERS
ARE AN IMPORTANT ELEMENT IN THE STRATEGY OF
SOFTWARE COMPANIES.

8. Cont...
 INFORMATION TECHNOLOGY IN INDIA IS AN INDUSTRY
CONSISTING OF TWO MAJOR COMPONENTS:
 IT SERVICES
 BUSINESS PROCESS OUTSOURCING (BPO).
 THE SECTOR HAS INCREASED ITS CONTRIBUTION TO
INDIA'S GDP FROM 1.2% IN 1998 TO 7.5% IN 2012
 ACCORDING TO NASSCOM, THE SECTOR AGGREGATED
REVENUES OF US$100 BILLION IN 2012, WHERE EXPORT
REVENUE STOOD AT US$69.1 BILLION AND DOMESTIC AT
US$31.7 BILLION, GROWING BY OVER 9%.

9. Cont...
 THE IT SECTOR IN INDIA IS GENERATING 2.5 MILLION
DIRECT EMPLOYMENT
 IT IS ALSO THE WORLD'S LARGEST SOURCING
DESTINATION, ACCOUNTING FOR APPROXIMATELY
52 PER CENT OF THE US$ 124-130 BILLION MARKET.

10. Market Size of Software Industry
 IT BPM industry revenues (excluding hardware) is estimated
at around US$ 130 billion in FY 2015-16 and is estimated to
be at US$ 154 billion in FY 2016-17.
 The contribution of the IT sector to India’s GDP stood at 7.7
per cent in 2016.
 TCS is the market leader, accounting for about 10.4 per cent of
India’s total IT & ITeS sector revenue in FY16
 The top 5 IT firms contribute over 25 per cent to the total
industry revenue, indicating the market is fairly competitive.
 The domestic revenue of the IT industry is estimated at US$
38 billion and export revenue is estimated at US$ 117 billion
in FY17.

11. Market Share and GDP of Software Industry

12. Major Players
 TATA Consultancy Service ( TCS )
 Infosys Ltd.
 Wipro System Ltd.
 Silver Line System Ltd.
 HCL Hewlett Packard Ltd.
 Digital Equipment (India) Ltd.

13. International Level of Software Industry
• China:
The Software Development industry is expected to generate $797.5
billion in 2017, up 6.5% from 2016. The industry has grown
strongly at an average annual rate of 13.9% over the past five years
due to strong demand from downstream software users and the
government, as well as solid pricing levels. This industry's
development has also been supported and encouraged by the
Chinese government. In 2011
• Japan:
While it is not our intent to provide a comprehensive overview of
the large and highly varied Japanese software industry, some
background on its structure and practices is necessary to appreciate
the findings and conclusion of this study. Based on published data,
there are nearly 4,000 software firms in Japan and 86.7% of them
have fewer than 300 total employees the size (software employees).

14. Cont...
• United States:
From 1997 to 2012, software industry production grew from $149 billion to $425
billion; and since this growth outpaced the rest of the economy, the software
industry’s direct share of U.S. GDP increased from 1.7 percent to 2.6 percent, or
more than 50 percent. Software contributed more than $1.14 trillion to the total US
value-added GDP in 2016 – a $70 billion increase in the past two years.
• Russia:
The volume of the market for information technologies at the end of 2013,
compared in constant terms with 2012, is projected to have increased by 6.9 percent
to 762.3 billion rubles ($21.38 billion) according to an updated development
forecast for 2014-2016 prepared by the Ministry of Economic Development. The
government forecast predicts growth to fall slightly in 2014 to 5 percent before
climbing slightly from there to 5.3 percent in 2015 and 5.5 percent in 2016.

15. Major Players Of International
Microsoft:
This statistic shows the net income made by Microsoft from 2002 to
2017. In 2002, Microsoft had a net income of 5.36 billion U.S.
dollars. Despite bringing in record revenues in 2015, 2011 was
actually the year that Microsoft reported its most successful fiscal
year to date, with a net income of 23.15 billion U.S. dollars. The
company's net income in 2017 was 21.2 billion U.S. dollars.

16. Oracle:
This statistic shows Oracle's revenue from 2005 to 2017 (according
to the company's fiscal year). In 2005, Oracle's revenue was 11.8
billion U.S. dollars. By 2017, Oracle's revenue was 37.73 billion
U.S. dollars.

17. SWOT Analysis
Strength Weakness
Opportunit
ies Threats

18. STRENGTHS
 HIGHLY SKILLED, ENGLISH-SPEAKING WORKFORCE.
 ABUNDANT MANPOWER
 CHEAPER WORKFORCE THAN THEIR WESTERN
COUNTERPARTS. ACCORDING TO NASSCOM, THE WAGE
DIFFERENCE IS AS HIGH AS 70-80 PERCENT WHEN
COMPARED TO THEIR WESTERN COUNTERPARTS.
 LOWER ATTRITION RATES THAN IN THE WEST.

19. WEAKNESSES
 RECENT MONTHS HAVE SEEN A RISE IN THE LEVEL
OF ATTRITION RATES AMONG ITES WORKERS WHO
ARE QUITTING THEIR JOBS TO PURSUE HIGHER
STUDIES.
 OF LATE WORKERS HAVE SHOWN A TENDENCY
NOT TO PURSUE ITES AS A FULL-TIME CAREER.
 THE COST OF TELECOM AND NETWORK
INFRASTRUCTURE IS MUCH HIGHER IN INDIA
THAN IN THE US.

20. Cont...
 MANPOWER SHORTAGE
 LOCAL INFRASTRUCTURE
 POLITICAL OPPOSITION FROM DEVELOPED
COUNTRIES

21. OPPORTUNITIES
 TO WORK CLOSELY WITH ASSOCIATIONS LIKE NASSCOM TO PORTRAY
INDIAAS THE MOST FAVOURED ITES DESTINATION IN THE WORLD.
 INDIAN ITES COMPANIES SHOULD WORK CLOSELY WITH WESTERN
GOVERNMENTS AND ASSUAGE THEIR CONCERNS AND ISSUES.
 NDIA CAN BE BRANDED AS A QUALITY ITES DESTINATION RATHER
THAN A LOWCOST DESTINATION.
 $69 BILLION ITES BUSINESS BY 2010
 $97.5 BILLION IT (CONSULTING, SOFTWARE SOLUTIONS) MARKET BY
2010

22. THREATS
 THE ANTI-OUTSOURCING LEGISLATION IN THE US
STATE OF NEW JERSEY. THREE MORE STATES IN THE
UNITED STATES ARE PLANNING LEGISLATION
AGAINST OUTSOURCINGCONNECTICUT, MISSOURI
AND WISCONSIN.
 WORKERS IN BRITISH TELECOM HAVE PROTESTED
AGAINST OUTSOURCING OF WORK TO INDIAN BPO
COMPANIES.
 OTHER ITES DESTINATIONS SUCH AS CHINA,
PHILIPPINES AND SOUTH AFRICA COULD HAVE AN
EDGE ON THE COST FACTOR.
 SLOWDOWN OF DEMAND

23. Types of Product

24. EXPORTED
 INDIA HAS ALREADY ESTABLISHED HER BRAND EQUITY IN THE
GLOBAL IT MARKET.
 INDIAN IT SOFTWARE AND SERVICES FIRMS OFFER SOFTWARE
PRODUCT/PACKAGES; A WIDE SPECTRUM OF IT SERVICES INCLUDING
SYSTEM MANAGEMENT AND MAINTENANCE, MOBILE APPLICATIONS,
CLOUD COMPUTING
 NEXT GENERATION USER INTERFACES, GPU COMPUTING,
CONSULTANCY SERVICES, SYSTEM INTEGRATION, CHIP DESIGN, E-
GOVERNANCE, E-COMMERCE, IT ENABLED SERVICES COVERING
BANKING/FINANCIAL/ INSURANCE SECTOR.

25. EXPORTED
 THEIR IT ENABLED SERVICES ALSO INCLUDE CAD/CAM MULTIMEDIA,
ANIMATION WORK.
 BPO (BUSINESS PROCESS OUTSOURCING) ASSIGNMENTS, CALL
CENTRE RELATED ASSIGNMENTS, AS WELL AS KNOWLEDGE PROCESS
OUTSOURCING (KPO) / LEGAL PROCESS OUTSOURCING (LPO),
MEDICAL LAB, DIAGNOSTIC AND DENTAL SERVICES, MEDICAL
TRANSCRIPTION SERVICES, E-PUBLISHING DATA CONVERSION OR
DIGITIZATION, TYPESETTING, COPY EDITING, CONTENT AND DESIGN,
GRAPHICS ETC.

26. Industry Financial Analysis:
Current Ratio

27. ROCE

28. Own Point Of View
 INDIA CONTINUES TO BE THE TOPMOST OFFSHORING DESTINATION FOR IT
COMPANIES FOLLOWED BY CHINA AND MALAYSIA IN SECOND AND THIRD
POSITION, RESPECTIVELY.
 LEADING IT SERVICES FIRMS ARE EXPANDING THEIR TRADITIONAL OFFERINGS (IN
INDIA) TO INCLUDE RESEARCH AND DEVELOPMENT (R&D), PRODUCT
DEVELOPMENT, AND OTHER NICHE SERVICES
 INDIA HAS THE POTENTIAL TO BUILD A US$ 100 BILLION SOFTWARE PRODUCT
INDUSTRY BY 2025, ACCORDING TO INDIAN SOFTWARE PRODUCT INDUSTRY
ROUNDTABLE (ISPIRT).
 THE SOFTWARE PRODUCTS MARKET IN INDIA, WHICH INCLUDES ACCOUNTING
SOFTWARE AND CLOUD COMPUTING-BASED TELEPHONY SERVICES, IS EXPECTED
TO GROW AT 14 PER CENT IN 2014.