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President's Message
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Dear friends,
The small and medium segment is a critical constituent of the Indian software and services industry. These companies fuel growth, fill in specific gaps that exist in servicing customers, bring in innovation and many a times spur disruptive solutions. It is no surprise that this segment has led to the creation of many industry giants that exist today – they all started small. From an India perspective, this segment is and will remain crucial for retaining the sectors’ competitive advantage.
While large companies are now moving towards becoming full service providers in areas like application development, infrastructure and BPO, emerging companies are bringing in very specific niche solutions – thereby completing the ecosystem. It is also interesting to note that majority of these emerging companies are entrepreneurial ventures by some of the best and the brightest people, who have worked with Indian and MNC companies. Having identified the gaps, they are now bringing in domain expertise, specific solutions and knowledge to their offerings.
These companies are mature, offer marketable solutions, create well-conceptualised products, bring business value and personalised attention to customers and in turn gain customer mindshare during the process. It is very encouraging to note that many of these companies are now developing products and creating IP, and with India becoming the single largest centre for offshore product development, the culture and discipline of product development is becoming all pervasive.
The Indian emerging companies segment has been hit hardest by rising operational costs, difficulties in hiring the best talent, high attrition rates and the fluctuating Indian Rupee versus the USD. The specific areas where these companies need help are market access and operational management, so that they are able to meet the requirements of the market. Among other things, NASSCOM has put in place best practice sharing platforms like industry events, mentorship activities and facilitating global SME linkages, to help foster the ecosystem.
There is also a need for us to encourage these emerging companies through fiscal measures and ensure that we provide a level playing field to all. Those in Tier-2 and 3 cities cannot use the SEZ scheme and even if they operate in Tier-1 cities, they cannot avail of the SEZ benefits given the cost structure. Policy level interventions are needed in areas like FBT, service tax, VAT, excise duty, etc. NASSCOM is continually working with the government to address these issues. Of late, we have also initiated dialogue with real estate providers to come up with specific products that are cost effective for the emerging companies segment.
Warm regards,
Som Mittal
President
NASSCOM
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Updated on:
01 Aug, 2009
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