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Accounting for a meagre 0.2 per cent of the global sales in 2002, India's software product revenue in 2002-03 touched Rs 1,000 crore (Rs 10 billion) with exports accounting for 60 per cent, according to Nasscom Strategic Review 2004.
"Total revenue from software products for Indian companies in 2002-03 was around Rs 1,000 crore, accounting for a meagre 0.2 per cent of global software product sales in 2002," it said, adding revenue from software products exports declined to Rs 600 crore (Rs 6 billion) in the period from Rs 1,500 crore (Rs 15 billion) in 2001-02.
Major Indian players i-Flex Solutions, Infosys and Tally each had Rs 100 crore (Rs 1 billion) plus sales in software products in 2002-03, according to Nasscom.
Together they account for Rs 632 crore (Rs 6.32 billion) or 63 per cent of the total Indian product revenue while other key players include TCS, Polaris and small companies like Newgen, Kale and ESS.
Majors like Microsoft, Oracle, PeopleSoft, Adobe continue to dominate the software market with the total packaged software market in India touching Rs 1,996 crore (Rs 19.96 billion) in 2002-03 and Indian products accounting for about 6.7 per cent of the overall market.
The market grew at a CAGR of five per cent from 2001-02 to 2002-03. Exports of packaged software products account for 2 per cent of overall software products.
Nasscom said the emerging opportunities for Indian companies in the software product market were in areas of embedded software, offshore product development service and software products (shrink-wrapped and enterprise products).
The Indian software products industry, still in its infancy, is dominated by a few companies. These companies have developed products for niche markets and have succeeded, Nasscom said.
The Indian IT industry is slowly climbing up the value chain in terms of service offerings. Clients in Europe and the United States are beginning to outsource high-end functions of product development to Indian companies.