SaaS founders discuss NPSP 2019 with MietY Officials in Chennai

Shri Rajiv Kumar Joint Secretary in-charge of National Policy on Software Products (NPSP 2019) and Senior Director Dr. A K Garg met 20 SaaS companies founders and leader in Chennai on 13th March 2019. At meeting it was discussed that NPSP announced by Government of India on 28th February will soon create a National Software Product Registry, where SaaS companies can register and have access to GEM portal. Also, the procurement process will be suitably amended to allow Govt. departments to procure and use SaaS products.  ‘National Software Product Mission (NSPM)’ envisaged in the policy will be setup at Ministry of Electronics and IT (MeitY).

 

 

Government has launched NPSP 2019 to focus on Software product ecosystem. iSPIRT has been advocating the cause of SaaS segment in Software products and its importance for India to remain a force to reckon with in Software in next 25 years.

The event was a golden opportunity for SaaS companies Founders and leaders, to provide feedback to and understand from the senior officials in Delhi, about the vision they have to make India a Software product power. Twenty SaaS companies represented in the event.

Speaking on behalf of SaaS founders, Suresh Sambandam, Founder and CEO of OrangeScape said,” Global landscape has changed very fast driven by new technology. We have a 2 trillion Dollar opportunity for SaaS industry. If we get our act right, India can aspire to remain in global game in Software Industry”.

The roundtable was organised by iSPIRT Foundation to facilitate officials to have direct interaction with SaaS industry and understand issues, problems and opportunities in SaaS industry, to enable Government to further carve out schemes/ programs under NPSP 2019 going further.

Policy Hacks – National Policy on Software Products (NPSP) 2019

It is a moment of delight at iSPIRT to see Govt. of India setting its focus on “Software Product”, with the announcement of National Policy on Software Products by government of India on 28th February 2019. The policy framed by Ministry of Electronics and Information Technology (MeitY) is aimed to sustain India as a global power in Software industry in emerging technological changes impacting the industry.

iSPIRT had earlier covered this announcement in a blog titled “India powers up its ‘Software Product’ potential, Introduces National Policy on Software Products (NPSP)”

A link to PDF document of the NPSP 2019 is given here on MeitY website. https://meity.gov.in/writereaddata/files/national_policy_on_software_products-2019.pdf

Ispirt held a Discussion on NPSP 2019 on 2nd March 2019 with Dr. A. K. Garg, Director MeitY and iSPIRT volunteers Shoaib Ahmed, Amit Ranjan, Nakul Saxena and Sudhir Singh. A vedio of the discussion is placed below.

 

Given below is the transcript of the main part of the discussion. (We have tried our best to put this but It is not a ditto verbatim transcript but what each participant spoke in essence).  It is advised to watch and listen to the video.

Sudhir Singh started the discussion and invited Dr. A.K. Garg to give an overview on the policy.

Dr. A.K. Garg – The policy gives wholistic looks and a single window opportunity. issues involved with HS Code. Three tire effort of building a talent pool. First, Appraising Students at school level that there is a difference between product and services. Second, Dedicated pool of developers dedicated to products. Third, Developing a pool of people who can be mentors

The other aspects we have looked at is, how do we provide dedicated market access to the product space. Unless and until there is a dedicated and early market access, we cannot create opportunities. We have not looked at graduating this from services industry to product industry, but we are looking at a completely new set of eco-system that will created around the product space, that is one thing which is very important and hallmark of this policy.

Sudhir – in the Strategy section 1 that deals with ‘Promoting Software Products Business Ecosystem’ creating ‘Product registry was an important aspect that can be further utilised to create incentives, schemes and programs.

Amit Ranjan – what can not be measured can not be improved, going further on the line, what can not be defined can not be measured. The government is taking a proactive view od first defining what is a Product and then a logical breakdown of that is building the registry, building the classification and codification system. So at least the system recognizes the different dimension and different players in the industry and then once you have a clear understanding of it than you know you can tailor policy and you can do specific thing for specific part and creating this registry will lead to mapping the industry and there after many things could emerge out of the system

Nakul Saxena –  One of the main objectives of iSPIRT was to create a special focus on Software products and thanks to people like Mr Garg and Secty MeitY and the Minister that we finally got this out. The HS code creation can help product companies to get preferential inclusion in Government procurements and Software products being included in many of the international agreements, especially where Govt of India gives grant to developing countries.

Shoaib Ahmed – Is the definition of Software product clear (referring to the early phase of development of policy when there was lot of debate on this part).

Nakul – the definition on Software product company is that that the company need to be owned 51% by Indian origin person and IP should reside in India.”

Dr. Garg – lot of thinking has gone in to Software product and Software product company. The first and foremost thing is that, it is a very dynamic world and what we have taken is an approach where Software product definition can adjust to changing dynamics. Initially we thought we will not keep any definition, but ultimately, we had to with pressure of various stake holders.

Sudhir – requested Nakul to take up the second Strategy section on Promoting Entrepreneurship & Innovation.

Nakul – One of the important features of the Policy is that Govt. and MeitY will be putting together 20 Grant Challenges to solve for specific eco-system problems in education, agriculture and healthcare. He mentioned that Secretary has asked to quickly start working on the Grant Challenges.

Dr. Garg – Can we crowed source ideas using iSPIRT and Policy Hacks platform.

Nakul – Yes, we can. This is a welcome idea and suggested we can have Policy Hacks session to structure discussions and then invite ideas.

Dr. Garg – (further spoke on skilling)  for skill development to suit product space, one has to think product and live with it. We have to think through a program that can create a pool of 10 to 15 thousand product professionals who understand product eco-system can help innovation and creation of new ideas and or mentor product companies. And that will be the most important dimension for creating a product eco-system.

Shoaib – I think that is a wonderful point and a very important point, beyond the technology and is a combination of skills with one being important is understanding of product market and development of these skills is important.

Amit – The way to think about it is that we have to catch people when they are young and I actually see this playout when lot of times when student are in their secondary education, when they are doing their class 10th or 12th, if you are able to educate them at this stage then it takes very early root in their mind. Product system is all about being experimental and all about being failing then retrying and then improving via every attempt. We should educate them about what is a Product how is it different from Services. We do not have lot of Product success stories from India. But educate them and then skill building comes at secondary stage.

Dr. Garg – We do not have to replicate the Silicon valley model and that will never work. We have to think and India specific solution that will work.

Shoaib – We need to create an India eco-system, there are a few success stories which we have in India, we need not copy but which need to be understood.

Sudhir – There are two more points covered in this section of Strategy. One is on common upgradable infrastructure to be created to support startups and software product designers to identify and plug cyber vulnerability. The second being creation of a Centre of Excellence will be set up to promote design and development of software products.

Dr. Garg – the first market in Cyber Security is Govt. So creating a single repository of various Indian Cyber products will help. The other thing could be understanding Indian cyber problems and through Challenge grant on some of these problems.

Sudhir – let us take up the Strategy section on improving access to market. Requested Nakul to start.

Nakul – for Indian Companies to start growing and start scaling it is important getting some anchor customer. The policy has taken care of this aspect for Product companies to get access to anchor customers and then compete within domestic and international market. But the product entrepreneurs have also to be aware how to deal with Govt. RFP.

Dr. Garg – So first two anchor customer are important. In Govt. space we are working on Gem to provide interface to Indian Software product. But we need to think how these product companies tie up with System Integration Companies and their interest are not compromised by Sis. Second thing is awareness building in various Govt. agencies. A young entrepreneur may not be able to get to the right stake holder, how does he get this access is what we need to think through. We will be very happy to get your views on creating access to first market.

Amit – this is a very important point, especially in the context of SaaS companies, there is an unwritten rule that Indian Domestic market is not big enough or pay enough to sustain many of the SaaS startups. And that is why many VCs are suggesting that you can build a SaaS Company of out of India but that is essentially for engineering, product design but the market it self you will have to go overseas. Development of the Indian domestic market is extremely important. One of the factors which will play a role there is kind of graduating these startups up the Quality ladder as well. The buyer will look for best product in market at best price. By focusing on Quality, they can compete with foreign companies. It is very important to break this negative feeling in the Eco-system that if you are SaaS you can not sell in India, you have to go out.

Shoaib – my point is that Quality software and creating a eco-system.  Selling Software, servicing Software and manage Software is a complete different eco-system. Making sure that policy supports that and recognizes it, is the first step. I think we have started with that and I am happy to spend more time to contribute on what does it take to do this.

Dr.Garg – if you have a Quality and you do not have a brand it a challenge.

Sudhir – this section again mentioned in Policy creating a Software product registry and connecting this with Gem for government product.

Sudhir – Let us move on to the last strategy section on implementation. I remember that the ‘National Software Product mission’ (NSPM) was proposed by iSPIRT in to the policy. NSPM can play a vital role as it can become an umbrella cover. Using this it may be possible to create many schemes and program. For example, we have a formidable SaaS industry and it may be possible to quickly create a SaaS product registry and use Gem to get access to Government. Once the registry is created may be Govt. can also issue and advisory to state Government to adopt products from this registry.

Dr. Garg – One of the important things is we have to educate the people, and secondly, we have to educate the people on procurement model. Most of the time procurement models are one-time purchase, whereas in a SaaS you have to budget every quarter or every month or it will be pay per use also. Which is a very difficult proposition in Govt. to be approved.

One of this thing that come in to my mind is the entry barrier have to be made easier, e.g. there is lot of activity around e-commerce. Now Govt. is actively going to promote product. The e-commerce system is far more developed, it has lower gestation. You can find few companies having valuation of Billion dollars, but that is not true of Product startups. So, we need to see how do we make entry barrier lower for entrepreneur of product companies, other wise human nature is to go by the path of least resistance. Product takes much longer to build, the gestations are much longer, risk are much higher.

Shoaib – the challenge are to get role models going, to showcase this. Education is some thing we have been talking about from two dimensions, one is the entrepreneur, second is the Indian SME customer or the Indian customer.

The Participants did deliberate further on important of early implementation of NSPM and working on various section of Policy and providing active support from iSPIRT.  The discussion was closed with final remarks from the participants. (please listen/watch the Video for further details on final deliberations).

The main Salient features of this policy for benefit of users are as follows:

  1. The visision is to make India a Software product leader in world
  2. In it’s mission – It aims at a ten-fold increase in India’s share of the Global Software product market by 2025, by nurture 10,000 technology startups, upskill 1,000,000 IT professionals and setting-up 20 sectorl technology cluster.
  3. The policy has 5 Strategie to implement the policy.
  4. Strategy are 1 – Intendents to create a congenniel environment for Sofware product business.
  5. An important feature of the policy is creation of a Software product registry of India that can facilitate implementation of schems and programs in future, creation of a HS Code category for Software products.
  6. To boost enterprenure ship, it itends to create a Software Product Development Fund (SPDF) with 1000 Croroe contributed by ministry in a fund of funds format. Remaining coming from private sources.
  7. 20 dedicated challenge grants to solve societal challenges.
  8. Readying a talent pool of 10,000 committed software product leaders
  9. Improving access to domestic market for Software product companies and boost international trade for Indian Software products.
  10. Lastly setting up of a “National Software Product Mission (NSPM)” to be housed in MeitY, under a Joint Secretary, with participation from Government, Academia and Industry. NPSM will further drive implementation of the policy and be able to craft schemes and programs for the said purpose.

An important part of announcing the scheme has been done. This has now to be leveraged to create a momementum in Software product. iSPIRT is committed to see the further development of India as a Product Nation.

The cause of ‘SaaS’ Industry is top priority on iSPIRT’s policy radar

‘SaaS’ can drive the future of Indian IT Industry both in International trade as well as domestic front. With changing dynamics in Software sector globally, ‘SaaS’ can help India remain a Software power house. iSPIRT has been following ‘SaaS’ industry growth from this perspective. The realization that there are several policy hurdles for ‘SaaS’ industry was very early conceived at iSPIRT.

Accordingly, iSPIRT made several attempts to ease the problems of ‘SaaS’ industry. One of the belief at iSPIRT is that ‘SaaS’ is basically about ‘product’ first and then a ‘service’. With this belief iSPIRT has been continuously taking up the case of clear distinction of Software product within the larger framework of Digital economy consisting of “Digital goods” and “Digital services”.

In order to stop the exodus of Startups, which constitutes a large number of ‘SaaS’ based startups, a Stay-in-India checklist was taken up with Department of Industrial Policy and Promotion (DIPP). There have been a number of items cleared by DIPP such as Angle Tax, Fair market Value, ESOPs provisions made better, Company incorporation rules simplified, Domestic venture debt made easy, Convertible notes, FVCI norms relaxed and External Commercial borrowing (ECB) eased by RBI etc. Some of these announcements under the shadow of StartupIndia policy. However, iSPIRT has been continuously pushing policy makers to relax all these norms for all start-ups. iSPIRT covered most of these announcements in PolicyHacks blogs given here.

A major problem area for ‘SaaS’ startups is also the payment gateway systems. ‘SaaS’ industry has to resort to either relocate to a foreign geography, or open a subsidiary abroad or seek expensive international payment gateway services. On domestic front the ‘SaaS’ industry suffers from recurring billing problems. Both these issues were taken up in PolicyHacks sessions given here. iSPIRT believes Indian ‘SaaS’ companies should be able to carry of out international trade of digital goods without moving out of India seamlessly and using Indian payment Gateway systems.

The belief at iSPIRT that a futuristic industrial policy at Ministry of Electronics and IT (MeitY) is required to meet the challenge of Indian IT industry was followed up with a National Policy on Software Product (NPSP) at MeitY. Being the administrative ministry for this Industry MeitY has in past played highly catalytic role in making of IT industry that India is proud today. A similar renewed thrust is required to push the Indian Software Product Industry.

One of the main emphasis in NPSP draft being followed up at MeitY is the ‘‘SaaS’’ segment. iSPIRT team is continuously engaging with the MeitY officials to educate them and influence on the importance and the need to focus on ‘SaaS’ segment.

There is recognition in Government system for need of this strategic shift. Honourable Prime Minister’s speech at Germany (Link here see 12th Minutes segment) is the evident of this realization of need for change that can lead to companies like Google to be born out of India.

iSPIRT is striving hard in this direction to see the ‘SaaS’ as the next big leap by India.

What to expect from National Policy on Software Products [Draft]?

Ministry of electronics and information technology (MeitY) has released the draft of National Policy of Software Product (NPSP) for public consultation.

Click here to see the announcement and how to respond to the consultation process.

Click here to see the draft pdf document.

This blog aims to explain where the draft NPSP policy statement stands at present and what to expect further.. The blog also answers many questions arising out in the minds of stakeholders in Software product industry as well as IT industry in general.

This may help Software product industry stake holders in responding to MeitY on this consultation process, which ends on 9th December 2016.

How does NPSP help India?

The first Software policy came up in 1986. It resulted into Software Technology Park (STP) scheme in 1991. Even after 25 years the old Software policy (1.0) of 1986 still prevails, with focus on IT services.

But, past few years have seen serious decline in growth, owing to rapid transformation in technology and Software industry, globally. India’s IT sector is strong enough to face changing technology challenges. India’s national competitive advantage has taken a shift towards innovative stage and ‘product’. Please see another blog on this subject here.

To address globally relevant strategic paradigm shifts, a Software 2.0 policy is needed with ‘product’ as focal to it.

This consultation process will lead this Software 2.0 policy. It will help in India in capitalizing on the existing matured IT industry and build a phase 2 of Industry in form of product based Industry. There are 3 advantages that NPSP announcement brings us.

Firstly, with NPSP announcement, India will give recognition to Software product industry.

Secondly, schemes and programs emergence from NPSP that will catalyze Software product industry eco-system.

Thirdly, Software product industry will have legitimate governance structure in Government of India that help solve problems and provide level playing field.

The draft policy does not have any actionable but only intent statements?

Yes, presently the draft is only a macro policy statement with a vision, mission to be achieved and ten strategic areas to be addressed. Let us understand different aspects of it.

There were two challenges to framing if this draft policy. One most people in Government system link the Industry policies framing directly to a package of fiscal incentives that help in direct market intervention. On the other hand, IT industry having matured, there is less appetite at ministry of finance to easily carve out a fiscal incentive program.

Two, iSPIRT believed that innovation and product based industry needs multi-layered action plan that can help promote the eco-system central to product industry. Adding any fiscal package right in beginning, to the policy statement would have put the efforts in jeopardy.

Hence, most areas that need to be acted upon are summed up in 10 Strategies in the draft. This macro policy announcement helps in getting policy rolled out in two stages.

First, set strategic intents and recognize a product industry.

Second, Action plans (schemes, programs, incentives and institutional setups) can follow on need basis and in phased manner after the policy is finally launched. Policy can be leveraged through multiple threads focused on defined actionable. It could be a) immediate action item list; b) ecosystem building programs; c) segment specific packages and lastly d) incentive schemes.  For example, SaaS based product segment needs an early support in form of a booster package that solves their multiple problems.

This is a right flexible approach adopted by MeitY. This is how it happened in Software 1.0 policy as well.

Let us achieve stage one and then proceed to stage two.

Are there stages envisaged further to announcement?

At iSPIRT, we believe, after the promulgation of NPSP the very first action that is required to be taken by MeitY is a new institutional setup (instead of relying on old or existing vehicles).

Hence, a ‘National Software Product Mission’ (NSPM) should be setup urgently, as nucleus of activity to cater to emerging Software product industry. NSPM can operate under an inter-ministry board, thus drawing legitimacy to understand and solve problems of this emerging industry, across Government departments, at a single point.

NSPM should become a forum for intellectuals and industry practitioners for issues of technology, boosting R&D, international competitive dynamics, steps and actions needed to handle challenges that industry face in a continually evolving dynamic world etc.

Let us welcome the NPSP with open mind and right expectation

Some point in NPSP may not be rightly synching with every segment of Industry. However, one must also note that, the Government’s stake in an industry policy is also multi fold which also including the generation of employment and income.

In view of above, it is in favour of Software product industry to welcome this step 1 of formulating a viable National Policy on Software products. An early approval of NPSP is in the interest of Software product industry of India as well as country to look at a bright future.

A positive welcoming feedback will help MeitY in early approval.

We sincerely hope NPSP will soon be approved and help in building a “Software product nation”.

If you still have any questions you can write to [email protected] or [email protected]

National Software Policy 2.0 needed

national-software-policy-2-needed

A recent article by Andy Mukherjee, predicting the end of India’s IT industry has caused lot of commotion. Though, the ‘end’ is an exaggeration, the warning of the ground slipping is not new. The declining growth is owing to the rapid transformation in technology and Software Industry itself, globally.

The first Software policy of 1986, resulted into Software Technology Park (STP) scheme in 1991. Undoubtedly, the policy was highly successful with IT industry today accounting more than 9 % of GDP.

Despite diminishing growth, even after 25 years, old Software policy (1.0) of 1986 still prevails, with focus on IT services. A reworked IT policy 2012, is generic, remained redundant with no meaningful churn out for new age Industry.

Failure to capitalize on the capability built in last quarter century can have serious consequences. The onus lies with Ministry of Electronics and IT (MeitY). However, MeitY seems to be missing on following four issues.

One, Software is core, not IT enabled Services (ITeS). Two, not able to gauge the shift in fundamental industry structure globally from ‘services’ to ‘products’ and also ‘cloud’ based products. Three, not able to appreciate ‘national competitive advantage’ has moved up the maturity curve to ‘Innovation stage’. Four, a phlegmatic approach resisting shifting gears swiftly.

To address these strategic paradigm shifts, a Software 2.0 policy is needed with ‘product’ as focal to it. We are at least 5 years late in our action here. Let us delve here into the four issues and related actionable.

Software is the focal sector in IT

It is important to understand here, that the genesis of today’s IT Industry was ‘Software’. The empirical evidence highlights real horse power coming from Software. IT enabled services (ITeS) is a derivative or related sector that grew through a ‘pull through’ effect of various related determinants (R. Heeks 2006). This is true even when we cut through the industry’s maturity stages. The ‘core’ has to be energised for new paradigm.

Product focus (new paradigm)

The big sector level transformative shift is ‘Standardised Product’ taking the center stage. This cuts across the ready Software packages (small, modular or enterprise grade), SaaS, PaaS and mobile apps.

The only subtle difference which remains is, whether a ‘product’ is sold to the end-user as ‘goods’ or a ‘product’ is hosted by SaaS or PaaS producer to provision the ‘productised service’. Even IT services business now hinges at standardised ‘products’ for revenues.

Shifting National Competitive advantage

For about a decade no one believed that Software policy 1.0 could make India a super star in Software sector. It is only after about a decade, researchers recognized that India, a developing country could become a follower nation in Software sector. This was in sharp contrast to other 2 rising countries in same period of late 1980s i.e. Israel and Ireland, who were ascribed as Industrialized nation by world bank even in that period among the 3Is.

Usually academic researchers have not been very successful in predicting or prescribing favourable industrial policy for a country. But, they have played an important role when we apply an established research for analysing a sector’s performance and understanding the needed strategic shift.

Also, the classical economics models of ‘comparative advantage’ do not fit well for a sector like Software which is replete with advanced factor conditions.

The most comprehensive model to deep delve into this search is Michael Porter’s theory of competitive advantage (The Competitive Advantage of Nations, 1990). It goes beyond the macroeconomic theories on competitiveness and also incorporates the aspects of business and industry with advanced factors such as technology & innovation. The “diamond” model is based on four main determinant categories viz. factor conditions, demand conditions, Related and Supporting Industries and Firm Strategy, Structure, and Rivalry. It also incorporates and interlinks two extra parameters of a) chance and b) Government policy. For India both these played a vital role.

full-diamond2

Porter’s Diamond Model. Source: The Competitive Advantage of Nations, 1990, Michael Porter’s (Kindle book, position 3060)

The national competitive advantage is based on the advanced level interplay of these determinants in the above diamond, network.

The model may lack in taking into account the new emerging factors of cloud and mobility computing. Yet, it offers a comprehensive and advanced postulation that can help understand the sectoral impacts.

Richard Heeks (2006), using this model concluded the competitiveness of Software sector of India. So also Bhattacharjee and Chakraborty (2015), further building on Heeks study. Richard Heeks (2006) says, “full diamond is not (yet) in place”. Whereas Bhattacharjee and Chakraborty (2015), recognize the full diamond in place. (Please see reference below at bottom)

Going beyond famous diamond model, the stages of development as postulated by Porter are more relevant to understand our readiness for ‘product’ stage.  The stages in order are ‘factor driven’, ‘investment driven’ and ‘innovation driven’ (the last wealth creation points decline). R. Heeks (2006) finds ‘Investment driven’ stage in 2006. Bhattacharjee and Chakraborty finds ‘innovation’ having swept in the period 2012-2015.

stages-of-development-from-kindlebook-location9634

Stages of development. Source: The Competitive Advantage of Nations, 1990, Michael Porter’s from kindle book location 9634

“Govt. helping improve the quality of domestic demand and encouraging local startups” is representative of ‘innovation’ stage, says Heeks (2006).  One can easily map here, the conditions arising to launch of StartupIndia policy 2015 and other accompanying developments.

Yet another symptom of ‘innovation driven’ stage is the domestic demand conditions undergoing a rapid change. ‘Digital India’, GST and UPI are not only concurrent, country scale demand generation programs, but also innovation boosters in domestic industry.

Porters, argues for a proactive role for cluster in National competitive advantage. The clusters enable innovation and speed productivity growth. The Silicon Valley and Israel’s Silicon Wadi are clusters that contribute to regional growth as well as making them as global brand.  India has a distributed cluster model spread across various Tier 1, Tier 2 and Tier 3 cities. Bangalore, Hyderabad, Pune, Delhi NCR and Chennai being prominent.

India has enriched these clusters in the investment phase recognized by both the referred researches above.

In India, a mass of new age Software product startups has emerged touching wide array of industries. Advanced and specialized factor resources are emanating from the Software product development happening in the captive offshore center, R&D centers of MNCs or by outsourced product development (OPD) vendors, across all major IT cluster in country.

India therefore is poised for a phase 2 of Software Industry this time with product focus.

Emerging SaaS segment has global reach

SaaS can be the next game changer for India. The national competitive advantage can be capitalized for creating a SaaS industry, and puts India in first three slot on global map.

Many Software as a Service (SaaS) companies like Zoho, Freshdesk are already global market place names, pitching for leadership in their own segments. It proves the power of SaaS to give edge in exports.

Out of more than 200 SaaS companies, number of them have incorporated outside, owing to the friction in doing global business from India. Software 1.0 policy doesn’t care for their issues. This loss can be plugged with Software 2.0.

Swift action needed by Government

India’s IT sector is strong enough to face changing technology challenges. It needs a ‘product nation’ based proactive strategy, that deals with ‘product ecosystem’ development, R&D, domestic demand boosters, frictionless trade and tax regime.

MeitY should rise to the occasion and announce a macro level policy framework, without wasting further time. Action plans (schemes, programs, incentives and institutional setups) can follow on need basis and in phased manner. This is how it happened in Software 1.0 policy as well. A new institutional setup is required. ‘National Software Product Mission’ should be setup urgently to cater to emerging Software product industry.

‘Software product power’ is cardinal to retaining global Software ‘power’ tag. Globally Software product market is estimated to be $1.2 trillion by 2025. India needs to target for 10-15 % of this.  At home front, India needs to create ~3.5 million new jobs by 2025. Choices are limited.

iSPIRT has been working with MeitY for last 2 years to persuade them for taking a stand for a national level product industry while the service industry keeps growing. A nine point strategy draft is under consideration. But it has taken lot of time. In hardware product space, we have National Electronic Policy 2012. A National Policy on Software Product will replenish the industrial policy basket of MeitY and usher in growth in new areas of both domestic and international trade.

“Mere incremental progress is not enough. A metamorphosis is needed. That is why my vision for India is rapid transformation, not gradual evolution”, said Prime Minister at NITI Aayog recently.

We hope the announcement of the long pending ‘National Policy on Software Product’ (NPSP) will soon be forthcoming. Only then will PM’s dream of rapid transformation, become a reality to catalyze an “Indian Software 2.0 industry”.

Main References used

1. Research article “Using Competitive Advantage Theory to Analyze IT Sectors in Developing Countries: A Software Industry Case Analysis”. By Richard Heeks, Development Informatics Group Institute for Development Policy and Management School of Environment and Development University of Manchester, Manchester, United Kingdom. http://itidjournal.org/itid/article/viewFile/228/98

2. Research paper, “Investigating India’s competitive edge in the IT-ITeS sector”. By Sankalpa Bhattacharjee and Debkumar Chakrabarti (Peer-review under responsibility of Indian Institute of Management Bangalore). http://www.sciencedirect.com/science/article/pii/S097038961500004X

3. The Competitive Advantage of Nations, by Michael E. Porter’s Free Press edition 1990