India: The Location of Choice for Top Global Software Companies

William Blake.

This historical quote is quite pertinent for the Indian IT and software industry, which has come a long way in imprinting its powerful presence in the global IT industry by smartly harnessing its human resources. India’s rise as a leader in the global IT and software arena has been magnificent in the last two decades. Primarily backed by its intellectual capital of English speaking, technologically sound work force and economic advantage, India has so far retained its position as the most preferred destination for top global multinational companies looking to offshore their IT and back-office functions. India’s name undoubtedly features among the top three global destinations best suited for the growth of IT and software industry in any global survey. Today, while thinking of optimizing its offshore capabilities, all major global firms prefer India to other destinations – China, Malaysia, Indonesia, Vietnam, Mexico, Ireland and the Philippines.

The software industry in India has come of age with world class IP (Intellectual Property) being created in key domains. Captive and third party units in India are now providing end-to-end design and development services to global ISVs. With India’s talented engineering workforce and experienced leadership proving that they can deliver more than just being the foot soldiers in the global outsourcing industry and scale up to the next level, the trend started shifting to software product development. Consequently, there has been a steady rise in the establishment of global delivery centers (GDCs) in India by top software companies to either develop niche products or carry out global deliveries of services to other stakeholders. The global delivery model has proved to be a win-win proposition for large and small ISVs to maximize profit and realize quality product development.

As India made its mark as the top offshoring destination, multinational firms like HP, Microsoft, IBM, Intel, Oracle Corporation, AMD, Cisco and SAP established their global delivery centers in the country and recruited large number of skilled IT professionals. Supported by technological advancement and regulatory reforms, global firms have realized huge invesment potential in the Indian market.

Back in the 1980s, it would have been hard for the pioneers of the Indian software industry to imagine that Indian service providers would come such a long way to handle complex high-end software research and development (R&D) with such finesse. This has all become possible because of the vast IT knowledge the Indian engineering workforce have gathered through the years, by being involved in diverse technology projects and back-end jobs that were outsourced to India. Apart from this, the rich skill leadership that the country already has in the IT sector, aspiration for entrepreneurship that exists among India’s youth particularly in the IT and software space, and established vibrant software ecosystem have played a great role to win the trust of global enterprises to set up delivery centers.

Apart from the established IT destinations like Bengaluru, Chennai, Hyderabad, Pune, Gurgaon,
Kolkata and Mumbai, tier-II and tier-III cities such as Bhubaneswar, Chandigarh, Jaipur and Kochi are also emerging as new destinations for software and IT businesses in India. India has more than 47 organizations certified as ISO20000—a standard for IT Service Management and several others have received SEI-CMM level certifications. While labor arbitrage has been a key driver for India’s IT industry’s growth, factors such as access to talent, service quality, productivity, and time-to-market have also gained importance.