ISVs key to unlocking India's possibilities

Independent software vendors in India could unleash the potential the country holds for large global tech vendors.
Written by Sol E. Solomon, Contributor

Strong competition in a market being shared with software giants like Microsoft, Oracle and SAP, has led India's independent software vendors (ISVs) to lean towards domain specific applications. With this strategy, these ISVs have elevated their standing in the sector, an IDC report revealed.

Through innovation and by creating their unique expertise, the ISVs are able to provide applications for particular market segments, provide complementary applications for big industry players or position themselves for acquisition.

Sureshpal Singh, senior research manager of IDC's Asia-Pacific Consulting, SMB and Channels Research, said: "We expect ISVs to continue to grow in importance as a key route to unlock the potential that India holds for large global technology vendors."

He cited how India's Infosys leveraged its Finacle core banking application to become a huge influence in the financial services industry (FSI) and attract a technology alliance with Oracle.

Finacle, which is now integrated with Oracle's E-Business Suite of applications (Oracle General Ledger and Oracle Financial Services Applications), has created access to new customers and markets for both companies.

"Another prime example is how iFlex, an influential India-based core banking ISV, was recently acquired by Oracle," Sureshpal said in a press release.

IDC has identified 21 up-and-coming ISVs in India in its Most Interesting ISVs in India, 2007 and 2008 report.

Through interviews and by leveraging its own information base, IDC identified a number of ISVs in India that are still mid-sized but already demonstrating high revenue growth. In addition, they provide in-demand applications that serve software markets such as enterprise resource management and contact centers, as well as applications for vertical sectors like telecom, healthcare, and FSI.

Alice Lai, research manager of IDC's Asia-Pacific Channels Research said in the press release: "Currently, these ISVs are still below the radar of most international vendors but may grow in terms of vehicles of influence into the end-user segments they address."

According to IDC, the Asia-Pacific region's fastest-growing market is India's domestic IT industry. Its size was US$19,564.6 million in 2007, and is expected to double in the next five years to reach US$40,334.9 million by 2012, representing a five-year compound annual growth rate (CAGR) of 15.6 percent.

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