Future of Offshore Software Development in India

Offshore Software Development – The Initial Years

Ever since the arrival of the offshore software development industry in India in the late nineties and the early 21st century, the country has seen rapid advances in the field of offshore software development. The seeds of the offshore software development industry were first sown in the 1990s when the economy was opened to privatization and globalization. The country’s natural strengths saw to it that India grew to be a market leader in offshore software development in no time. The country did face a lot of competition from countries like China, Russia, Philippines, Ukraine, etc, but it didn’t take time for the Indian offshore software development companies to dominate them from the word go. As of now India is synonymous with software outsourcing and is respected the world over as a software outsourcing giant.

New Regime – New implications in Offshore Software Development

In the last two decades, many had predicted the fall of the Indian offshore software development industry. It has instead gained in strength and doesn’t seem to go downhill anytime soon. There have been challenges, some serious ones too, but the industry has absorbed those shocks and has rather blossomed. In recent times with the change of the American administration, there have been fears regarding the status of business tie-ups between the two countries.  The present American administration seems to be favoring its own citizens for all kinds of work that the offshore software development companies in India have been doing for American clients. As a result, the Indian offshore software development industry is a bit apprehensive about the future implications of such changes in American policy. Yes, it sure is a hard time for Indian software developers. But then, it’s adversities that help you grow. It’s not the end of the world for Indian companies as long as they can learn to diversify and change the direction of doing their business. Europe has lately developed as an important destination for Indian developers. There’s a lot of potential in the European market. The over-reliance on the American market had caused us to neglect Europe all this while. The uncertainties in the US are now forcing offshore software development companies in India to grow up from low-end software providers to high-end software developers. Definitely, this is going to be a lot useful in the long run.

American restrictions notwithstanding, the business possibilities are going to increase further. In the years to come, the role of IT will increase further. With that, the need of software outsourcing too will grow. It’s simply not possible for America or Europe to handle all their software development needs from their own talent pool itself. Considering that need for outsourcing will continue to grow in the rich countries of Europe and US, India will continue to be a popular destination for offshore software development due to the huge advantage over many other countries including China, because of its trained manpower and the low-cost salary structure. English speaking skill of its population is an added strength for the industry in India.

Some of the advantages that will help the country provide the most attractive platform for the offshore software development industry are as follows:

Abundant Workforce

Most countries do not have the advantage that India has in terms of its large and dynamic manpower. The Indian IT workforce is young, talented and highly professional. With a large pool of expert programmers and software designers, India sure is a power to reckon with and is thus likely to be a leading force for years to come.

Low Operating Cost

India has the advantage of operating at low labour costs, compared to most other countries. However, low cost alone doesn’t make India an attractive destination for outsourcing. Many other low-cost countries could not succeed the way the business has succeeded in India. A decade back many feared that increasing labour costs would make India unattractive for investment. Fortunately, these unfounded fears have not come true and India continues to be a favourite destination for outsourcing.

Strength of the Indian Companies

Compared to many of its competitors, India is now blessed with a number of market leaders in the international front. Tata Consultancy Services, Infosys, Cognizant, HCL Technologies and a few others like Vofox Solutions are providing top class services to their clients. This goes a long way in improving the brand value of the Indian offshore software development industry.

Growth in Startups and Entrepreneurship

Even though a bit late, Indians have woken up to startups and entrepreneurship. With the entrepreneurial spirit growing in the country, similar to the likes of Silicon Valley, it’s no wonder India will fast develop into a software giant in the years to come.

There are however some challenges too that needs to be overcome to ensure that the Indian software offshore software development industry continues to grow further. A few of these are:

Poor Infrastructural Facilities

Poor infrastructure has at times cost the industry a lot in terms of man-hours wasted. Services have often been let down because of the breakdown in facilities like transport, electricity, water, industrial shutdowns, etc. Companies are forced to invest heavily in facilities like transport and captive electricity, which should otherwise be taken care of by the government. Many smaller companies, not able to afford such facilities are handicapped in providing the best of the services to their foreign clients.

Lack of Political Support

Many of the political parties, especially the regional ones don’t see eye to eye with the software development industry. Often there’s a lack of political support on issues that would help the industry to grow further like providing land for expansion of facilities. The lack of political will and enthusiasm often causes obstruction in the growth of the industry. A healthier outlook would definitely help.

Over Reliance on the English Speaking Countries

India is currently heavily dependent on English speaking countries like US, UK and Australia for most of its businesses in offshore software development. It will definitely help if we could diversify to other non-English countries.

Concluding Note

Over the years the country has seen a number of Indian IT companies getting listed into the NASDAQ and New York Stock Exchange. A good number of Fortune 500 companies find it comfortable to do business with most of the offshore software development companies in India. No more are Indian companies simply satisfied with low-end services. They are now more into offering specialized services for their global clients and are thus moving up the value chain. Years of experience in the service industry has made offshore software development companies in India to more comfortable with designing skills and the gamut of services being offered too has improved a lot. Standards are improving, knowledge and skill level of employees to is on the rise. Indian companies are developing the much needed competitive edge over their rivals. Thus the future of Indian offshore software development industry is in safe hands and in the years to come India will see its software services getting more diversified, serving a larger region of the world and not simply dependent on one particular economy.