With the IT sector coming under growth pressures, the differences between Nasscom and a section of the members connected with the software product companies have come out in the open.

Indian Software Product Industry Round Table (iSpirt), a think tank made up of Indian product companies, has gone its way, unhappy over industry body Nasscom’s handling of issues faced by them.

Core focus

The core focus of this organisation would be on products, which according to its members has not been given adequate attention.

Right from evangelising about software product development to tax issues, the Indian software product companies are under stress.

Nasscom, however, said in a statement that it has a defined focus and initiatives for the software product sector and will continue to grow and contribute to build this sector.

To address the interests of the software product companies, industry veterans such as Sharad Sharma, former head of R&D at Yahoo! India, Bharat Goenka, Co-founder of Tally Solutions, Anand Deshpande, founder of Persistent Systems and venture capitalists such as Ashish Gupta of Helion among others are backing this venture.

According to Nasscom data, the software product industry is pegged at $1.81 billion, which pales in comparison to software service exports and this think tank aims to close this wide gap.

Vishnu Dusad, Managing Director, Nucleus Software and also the member of iSpirt, said: “The idea was we needed to do original thinking on products, so this think tank came up to further boost the Indian economy for products. There is no domestic products as Microsoft’s word or search engine Google, so we need to think on those lines and push the Government (to help in developing such products) in a manner and go through Nasscom.

“These 30 companies are still part of the Nasscom. It is an independent body (Think tank), but will work along with Nasscom. There is no hierarchy in this body and all members are equal.”

‘single point agenda’

“This organisation has a single point agenda and is not a competition to Nasscom,” said Hanuman Tripathi, Founder of Infrasoft Technologies.

Others admit that while Nasscom has done a commendable job when it comes to the Indian IT and BPO companies, they have neglected the product sector, which is vital for the sector’s growth.

“There is a need to explain to that a vibrant software product industry is vital to India’s future,” said Sharma.

He added that clarity on taxes and evangelising the advantages of technology in Indian SMEs are huge concern areas, which need to be addressed. In the last Budget, payment made for purchase of computer software was considered as royalty and thereby TDS at the rate of 10 per cent is applicable and since margins at the distribution is in the range of 2-4 per cent, it puts a lot of pressure on nascent software product companies.

(with inputs from Ronendra Singh in New Delhi)

(This article was published on February 4, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.