Indian IT startups face intense competition from both domestic and overseas rivals. Domestically, startups compete with established Indian IT giants as well as other startups. Overseas, startups face competition from large international firms in countries like the US, China, and Israel. However, Indian startups have some advantages including a large talent pool, lower costs, and maturity in delivering outsourced projects. Experts advise startups to focus on niche solutions, world-class presentations skills, and overall value rather than price to compete successfully.

1. a to succeed if it has a
clear understanding
start-up can markets
of its target only hope
and challenges. In fact,
competition might prove to be one
of the biggest stumbling blocks
services pie. So, whether it adopts a
strategy to take on its competitors or
chooses the right space to be in, it
is important for a start-up to know
whether its greatest challengers are
its Indian counterparts or overseas
firms in China and emerging areas
(and a living) for themselves in the
process-Aadil Bandukwala, chief
evangelist, Leading Minds & Talent
Onions; Gurudev R Goud, vice
president-business development,
KTwo Technology Solutions; Nirmal
Shah, vice president, Global Delivery,
in its road to success. Given that like Brazil. Tescra; and Vihang Kathe, director,
we live and work in a 'Bat' world, In a bid to help Indian IT start- International Business Consulting.
competition is no longer limited to ups navigate their way through
what we see around us. It extends to intense competition and emerge Who poses the greatest
unseen IT start-ups and established winners, we present the view of challenge?
firms in other countries, battling for some panellists who have stood up Kathe's experience suggests that
a slice of the global tech products/ to competition and made a name competition varies depending on each
i.i;. I www.itmagz.comIDECEMBER 2008 I 41

2. behind Indian and Romanian firms
Q) niche of the IT sector. For instance,
"It is the overall
o he explains, "If you are competing in terms of talent, technology and
value that counts,
o for an ERP implementation for SAP, skills. He feels that these advantages
irresQective of.
'> ~~ 'S~~~~~~~~ ".~~~ ~~ "'-~~~~ ""'m~~~~.~~...~~"-~'-~~
'..~'-~"-~~'-
CD companies like Infosys, Wipro, TCS agencies in India and Romania bag ,her you are
or HCL. However, if you are looking 60 per cent of the work outsourced competing against
for niche storage solutions, expect by the US and the United Kingdom.
competition from US companies Other countries rapidly catching up
a fellow local player
like EMC, HP or IBM. My firm is in this sector are Malaysia, Israel,
or an international
j, engaged in the storage, server and Bangladesh and Macedonia. player/·
.network security solutions sectors. According to Shah, Indian
The greatest competition we face is counterparts as well as firms in
from large MNCs operating in this Brazil, Bulgaria, China, Hungary and
space-firms from countries like Mexico, comprise the competition
the US, Israel and Russia that are faced by Indian tech endeavours.
strong in the security segment and Goud, however, is of the view that
companies like Dell, IBM and HP the biggest competition for Indian IT
that have a sound presence in storage/ start-ups comes from within India,
server, technology." although some Chinese firms rule
Bandukwala seconds this. His the roost in the 'buy cheap, use and
~nteractive Internet agenC:y,Leading throw' product category! Nirmal Shah, vice president, Global Delivery, Tescra
Minds, faces great competition from
similar firms in India and Romania. Advantage India developers wouldn't mind clocking
This is because Internet start-ups in Evidently, the challenge has two in a few extra hours after their
China and Brazil, for instance, are far dimensions and necessitates tech routine schedule to help design a
start-ups to have eyes'in front as project. Web developers usually
"In order to cater well as at the back of their heads to code, and design is not their forte.
to larger volumes, make their presence felt in a tough However, in India, you will find a
market. But do Indian techies have lot of Web developers who know
firms just need
, the inherent skills to help them deal their design like the back of their
to focus on offering with the intra-country competition hands. They don't mind working
products/services of an and price wars that Bandukwala feels late hours simply because they have
equivalent 'quality at a are becoming a frequent occurrence? the drive, the zeal and the passion
He himself believes that clients
oomDetitive price." to create that magical product in the
nowadays want a relial':>le,quick and promised timeline.
efficient partner. "If a start-up can Against overseas competition,
build and leverage on these three Shah cites maturity, a better
core competencies (of being reliable, understanding of processes, delivery
quick and efficient) other than its models and technological depth and
technological expertise, it will never breadth as the major advantages
run out of business, no matter what that Indian companies possess.
price it quotes," he advises. "Barring (very) few examples,
Further, Bandukwala points out IT vendors from other emerging
that India boasts of an abundance nations are really small players and
of 'flexible' talent and passion, sometimes just a rag-tag bunch of
an otherwise scarce resource, as a techies running a garage operation.
Gurudev R Goud, vice president-business huge advantage. He elucidates his Scale is definitely against them at
development. KTwo Technology solutions point with an example: typical Web this point in time," he says.
42 I DECEMBER 2008 I www.itmagz.comli. "t.

3. Adding value to Brand India ''Tech start-ups need at a lower price, as being a key
CD
Goud believes Indian techies'
to develop world factor for enabling starr-ups to <
skills in Web 2.0, WiMAX, survive in markets. o
embedded technology focusing
on the design of low-powered and
class products that
may be marketed Don't get bypassed by ,_
o
CD
high-performance devices, and the not only in India but 'local' companies ,,"
convergence of automotive, medical across the world." No discussion about competition
and consumer electronics, are far would be complete without
superior to the overseas competition. mention of the clients' perception of
Nevertheless, he stresses that Indian competing local and international
IT professionals need training on players. When an Indian tech firm is
how to present and market their pitted against an overseas firm, which
skills. "We have it in us but need one is more likely to win by virtue of
world-class presentation, business its country of origin? Further, if two
communication and PR skills," he local players compete, what are the
advises. On a larger scale, he feels key factors that influence a potential
the Indian IT industry should take client?
inspiration from the Korean and .Bandukwala feels that when it
the Swiss ecosystem, and organise comes to the Internet platform,
itself likewise to nurture talent and clients usually don't bother about
promote innovation. Vihang Kathe, director, International Business Consulting the location of an agency or partner.
Kathe mentions India's prioritising "They are only very particular about
value-based entrepreneurship as things up fast~r" A start-up can the ability to understand, tweak,
its greatest strength, which should carve a niche for itself very quickly customise, build and scale the
ideally be nourished with government if it focuses in the right direction," technology they need and to deliver it
support. He says, "The Indian advises Shah, as he shares how his in a decent timeframe. If these can be
management principles emphasise firm co-exists with the big boys matched, more often than not, even
providing value for money products/ of the Indian IT industry, and price is not a barrier," he says.
solutions to end-customers. In actually gets to do some cutting- Shah too stresses th(! importance
keeping with this tradition, tech edge work that they don't. of delivering value. "It is the Qverall
start-ups need to develop world class Goud agrees. Citing Skype, value that counts, irrespective of
products that may be marketed not YouTube and Orkut as the best whether you are competing against a
only in India but across the world." examples of how starr-ups have fellow local player or an international
given established biggies a run for player," he says. And what adds to a
Expand your footprint their money, he says, "Every start- firm's value in this local versus foreign
If value-based entrepreneurship up's mantra must be to 'give value.' debate? Apparently, a lot of weight is
is stressed, even a start-up can hope Don't worry if your way forward placed on the firm's local presence in
to gain a foothold in a market is blocked by a big player because its potential clients' city of operations.
where an older player is already well at the end of the day, people Shah explains: "We are headquartered
established. "Start-ups must see respect the value they derive from in the US and some of our clients feel
value in not competing on price, a producr/service. Besides, market more comfortable when they know
but overall value. If you show value, leaders usually overlook a few key we are a 'local' company. We have
you are bound to get more business points like service quality, customer lost some bids because we did not
and take that bit away from the loyalty or price. A new firm can use have a presence in a particular city
competition. In fact, although large these omissions to its advantage." or state. The bias, if there is any, is
companies drive the IT industry, Kathe sees the ability to for someone to be local to the client's
smaller start-ups are agile and have provide niche solutions modelled city. If they don't have that bias,
the advantage of being able to pick on the offerings of large players they usually don't much care about
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