Information Technology - Products vs. Services

Last updated on 6th May 2014

Here is an interesting blog post by Dr. S. Ramani titled, Information Technology Products versus Services, http://www.obvioustruths.blogspot.com/2014/05/information-technology-products-versus.html

[Dr S. Ramani is a distinguished veteran of the Indian Information Technology world. For those who would like to know more about him, Dr. Ramani earned a doctoral degree from IIT Bombay and worked as a post-doctoral research associate at Carnegie Mellon University (CMU), USA. He started his career in TIFR Mumbai and went on to be the first director of National Centre for Software Technology (NCST) in Mumbai (now CDAC Mumbai, http://www.cdacmumbai.in/) from 1985 to 2000. NCST helped him play a significant role in creating India's academic network, ERNET, which brought the Internet to India in 1987, and perhaps mainly for this contribution, Dr. S. Ramani was recently (2014) inducted into the Internet Hall of Fame, http://www.internethalloffame.org/inductees/srinivasan-ramani.  In 2001 he became the first director of HP Labs., India, and played a key role in setting it up. He has been on the expert panel of the ICT task force of the UN and is a past-president and current fellow of the Computer Society of India.

Sources: His blogger profile: https://www.blogger.com/profile/04172838171718633613, http://fox.cs.vt.edu/IndoUSdl/BIOramani.pdf]

Given below is a comment (slightly edited to fix a typo) that I added to Dr. Ramani's blog post:

My view based on my experience of the Bombay software export field in the 80s and 90s, is that, during that period, India was not that much of a viable market for fledgeling software products. It was far easier and far more profitable to offer software development services to economically developed countries like in the Western world or, in some rare cases, tie up with some NRI(s) based in the USA to develop products for the US market using software developers in India.

In stark contrast, in the 80s and 90s, the US market was a fantastic one for fledgeling software products, even if many products failed. Customers were willing to try out new software that promised to fulfill some of their needs or improve their business in some way, and the software products that satisfied customers at reasonable price, succeeded, sometimes wildly succeeded. However, it was important to have a very good understanding of the customer needs and business and also be able to provide very quick-turnaround support for any issues faced by the customer. Due to that, attempting to create software products for the US market, based entirely in India, was not really working out - the US based competition was able to do far better.

I don't know what the picture is about the Indian market today. I would presume that now there may be a decent market in India itself for Indian software products.

Regarding B.E./B.Tech. and MBA being a good combo for company leaders, I am not so sure about it in the case of software product companies. I think that combo works out great for software services companies. For the software product companies, as you wrote, passion is a vital factor in such company founders and leaders. Risk-taking ability, brilliance in understanding the niche areas the product(s) cater to and mastery of technology are vital. The finance bit, IMHO, is not that hard to understand for a software product company start-up and does not really need a business administration or finance degree.

I tend to agree with all four of your suggestions regarding education to encourage software (and hardware) entrepreneurship. I would like to add a point about education to encourage software product development skills:

*) Students should study and then try hard to contribute to great open-source software products out there as part of their degree work. Just imagine the confidence a Computer Science (CS) or Information Technology (IT) graduate/post-graduate would have if her/his contribution got accepted. Unfortunately, the culture in most Indian CS & IT departments does not promote and reward (by good grades) such work. Many times the teaching faculty themselves are not so comfortable with in-depth software development, and even tend to look down upon software development work as low-calibre work (as against producing research publications). My considered view on the matter is that a software product developer/visualizer/creator has to first and foremost be fluent in software development - coding fluency is to software creation what linguistic fluency is to creative writing. That gives the foundation for trying out various ideas. Adding strong research skills/insights/ideas to a solid-base of software development opens up tremendous opportunities for software product creation. However, even top research skills if not supported by a strong software development skill base, will lead to self-doubt as the person may not be able to, by himself/herself, confirm/validate his/her research ideas through software prototypes.