Home-Grown Software Brands: Made in India

DQI Bureau
New Update

Here’s a quiz: Name any three international soft ware products– branded,

shrink-wrapped and pervasive. Chances are your answers will include Microsoft

Windows, Adobe, Oracle, Corel Draw, OpenView, Tivoli, WebSphere… Chances also

are that your answer will not include any Indian product.


But here’s a surprise–there are many Indian products sold

and accepted in both our domestic and international markets. The numbers may not

match up to the Windows of the world, but in their own specific domain, they are

doing reasonably well, and growing. And here’s a few names for you to chomp on–Flexcube,

Finacle, Finness, Signbank, CustomerView, Ubitel, BanksAway, PayAway, TaxMantra,

eRamco, Contago. Sure, the list doesn’t go on forever, but its there, and its

long enough, and it is growing.

Why is it then that many of us are not aware of the Indian

software industry’s foray into products? There are a few reasons. First, of

course, is the fact that though some of these products have been around for

almost a decade in some form or another, the bottomline numbers don’t yet

amount to a great deal. Second, if you’ve read the names of the Indian

software alternatives carefully, you’ve probably realized by now that most of

these products have to do with the banking and finance sectors.

While in themselves, these sectors may be a pervasive part of

everyday life, it is in business terms a niche area. Products sold to banks aren’t

exactly advertised on hoardings; and finally, deriving in a sense from the

previous reason, the success stories of Indian software products have been

limited by their limited visibility and what some would call "non-core

areas". The typical cry against the Indian software industry, for instance,

is "There is no world-class Indian operating system or database". Why?

Well, that’s another story altogether. But many Indian companies do have a

substantial presence in specific verticals–most notably banking and finance,

with telecom being the upcoming domain to watch out for.


And that’s what this story is all about–a story of Indian

software products, of how they grew, where they are today, the challenges they

face and where this segment is headed in the coming years.

Story #1: Flexcube

Flexcube, the core banking solution from iFlex Solutions, for

instance, is a product that has gathered quite a name for itself in the

international market. Both the company and the product have an interesting

history. The company began as a division of the Citibank group in India and till

last year, was known as CitiGroup Infotech. The product itself–Flexcube–is a

rejuvenated and upgraded version of an earlier smaller product called



Says Senthil Kumar, head of corporate marketing at iFlex:

"We launched the company as a product company and the product we created

and built upon was Microbanker." Launched in1992, Microbanker was an

integrated banking solution for small- and medium-sized banks and within three

years of its launch, it became one of the largest banking back office solutions

in the world, with a presence in nearly 30 countries. Some of the success had to

do with its lineage–coming as it did from the Citibank Group. A larger amount

had to with how the product was designed. "We never sold Microbanker as a

branch automation product. For us, it was always an integrated piece," adds

Senthil. Yet, Microbanker was a small product, targeted at small-sized banks in

developing economies very similar to India.

Moving to advanced markets with more sophisticated systems in

place, more complex requirements was a completely different ball game. "We

wanted to build a core banking product for large banks and one that addressed

retail, corporate and investment banking," says Senthil.

One of the first things the company did was to take

Microbanker to Europe and the United States for evaluation. At the same time, it

initiated an extensive market research study in these geographies. Apart from a

whole list of new functionalities and local legal issues that emerged from this,

there were three key elements that came up–scalability, parameterization and

the need for an open platform. "There was a huge time and effort required

in a banking back office solutions in the eighties and nineties. If you needed

to launch a new instrument, you had to write the code. Banks didn’t want that.

Also, we realized that international banking markets wanted an open



So when work on the new product began, the company chose to

go with a Unix and Oracle platform and one of the design goals for the new

product was clear–" No code change".

Flexcube was finally launched in 1997 and today boasts 1.3

million customers, 100-plus branches and is sold in 36 countries. iFlex has a

subsidiary in Holland which manages Europe, Asia and Japan are managed from

Singapore, while India and West Asia are handled out of India. One of its

strongest bases, however, is Africa, where it has a substantial presence in

countries like Ghana, Nigeria, Kenya and South Africa.

Story #2: Finacle


When the management at Infosys Technologies sat down to

explore the possibility of creating a product, they walked a slightly different

route. Says Merwin Fernandes, head of global sales and marketing at Infosys’

banking business unit: "We examined enterprise-spending data. And we found

that the financial services segment was one of the largest spenders on IT."

That suited Infosys fine. Like in most Indian IT companies, financial services

had been a key focus area for Infosys and deciding to take up a product in this

domain was an easy choice to make.

Infosys started slow and small. In 1989, the company came up

with a small product for cooperative banks. Two years later, it began to make

serious efforts in the commercial banking sector. And in 1993, the first version

of their earlier flagship product Bancs2000 was launched in the domestic market.

It wasn’t till two years after this, in 1995, that Infosys launched Banc2000

in the international market. Says Merwin, "It was a getting-our-feet-wet

kind of thing. We wanted to test the market and our product. And we wanted to

make sure that when we got aggressive, we had all the features and

functionalities in place."

For two years after this, the company made Banc2000 sales in

countries in and around India. In 1997, the company felt the need to revamp the

product significantly. The reason was simple–a lot of things had happened in

the interim. Technology had improved, banks themselves were getting more

sophisticated, infrastructure had improved and the Web had emerged as a new and

important medium. Most importantly, the company felt it was time to move from

the more elemental financial markets to the more sophisticated markets of Europe

and the US.


So when Infosys began looking at a new product, they began to

look at expanded functionalities and scalability. At that time, Banc2000 was a

purely character-based system developed in Unix. The management had a choice to

make–should they go the client-server way or the Web-based way for the new

product? Says Merwin, "It was a call we took–going the Web-based way. And

we’ve never regretted it." But by that time Banc2000 already had 35-40

customers and an additional consideration was building a seamless migration path

to the new product. That mandated a slower migration to the new product.

For the next three years, from 1997 to 2000, Infosys gave out

intermediate releases of the as-yet-unnamed product, adding new features every

time–Web enablement, multi-currency processing, integration of work flow

management and the like. During that time, it also re-architectured and

re-engineered their existing customer installations.

Finally, in July 2000, they decided they had their new

product ready and it was time to give it a name. They called it Finacle.

"Because of the migration we had already been doing," says Merwin,

"on the day of the launch of Finacle in July last year, we already had five

existing customers." This included one of the biggest catches of the time–Unit

Trust of India. IN the meantime, Infosys has also launched some other banking

products, including BankAway and PayAway.


Today, the company’s banking business unit caters to 45

banks across 15 countries, though a substantial amount of its revenues comes

from domestic sales. By the end of last financial year, banking products had

contributed close to $10 million to Infosys’ bottomline, a figure it expects

to exceed by the end of the ongoing financial year. Is this a sum that takes

your breath away? No, especially when given the sheer size of Infosys. But

Finacle has been doing well, more so domestically, with over 60% of the

marketshare in centralized banking and almost 80% of new domestic orders in the

last 15 months. Last year, Finacle, along with Flexcube from iFlex, was among

the to top three retail banking systems in the IBS list, while BankAway got CSI’s

‘Best Packaged Application’ award.

Some other stories…

Other banking product success stories include Tata Infotech

and Delhi-based Nucleus Software Exports–a 15-year-old company that moved from

consultancy and services to solutions and now has a stable of software products

in the banking and financial services segment.

Nucleus’ flagship product is Finness, which is essentially

an integrated suite that provides solutions for both the asset and liability

side of the business, core financial accounting and customer service.

Interestingly, as a Rs 55-crore company, it gets 23% of its revenues from

products, of which 21% comes from Finness alone. Introducing four new products

last month, the company also announced that it would be investing close to Rs 10

crore over the next two years in product development.

But are banking products the only sector Indian companies

venture into?

Walking some other roads

Obviously not. Though banking and financial services dominate

the Indian software product story–as they do the entire Indian software story

for that matter–there are other companies looking at other application areas

and business verticals.

Chennai-based Ramco Systems, for instance, first launched its

flagship product Marshal in 1994. By the time Marshal 3.0 was released by Bill

Gates in Mumbai in 1997, it was a full ERP suite consisting of over 30

applications, including discrete manufacturing, treasury and quality

applications. Two years later, Marshal 3.1 was re-branded as Ramco e. Around

that time, the generic mass market for ERP was breaking up into clusters of

vertical industries and the Internet had emerged as a significant business

medium. Therefore, Ramco e was built keeping in mind the new verticalization and

featured Web products designed for the various stakeholders in an enterprise.

The next version–Marshal 4.0–is planned for a 2002 launch and the company

says it will build in strains that will support what it calls c-commerce

(collaborative commerce).

Ramco has a diverse customer base. For instance, Ramco’s

process manufacturing solution is among the top such product for chemicals, food

and beverages, metals and textiles industries in the US market, while its

enterprise asset management solution has reasonable acceptance in the aviation,

utility and facilities management market. Recently, Ramco and Boeing also

announced a partnership to provide solutions to the global aviation maintenance


The company forayed into enterprise product vending at a time

when the ERP market was dominated by the likes of SAP and Baan. From small

beginnings, its operations are today spread across 1,000 customers in 11


Another company that ventured into the ERP space was Eastern

Software Systems, with its Web-enabled ERP system called Ebizframe. When Anil

Bakht and Sanjay Agarwal set up the company in 1990, they started with hospital

management software. In 1998, they announced an ERP package specifically

targeted at the SME segment and, a year later, were among the first to offer ASP

services through their ERP-on-the-net offering. Recently, the company has

launched a WAP-enabled enterprise solution called Cellbiz. Though largely

oriented towards the domestic market at the moment, the company gets 20% of its

revenues from West Asia and hopes to venture farther afield shortly.

This is by no means a comprehensive list. There are a host of

other products and companies and not all of them can be reasonably covered here.

But this begs a question–if there are in fact Indian software products of

international standards, and if they have been around for a reasonable length of

time, why aren’t they as big as one would have a right to expect?

The challenges

In two words–marketing muscle. There are various expert

estimates on what it takes to market a software product internationally. But all

of them agree on one thing–it takes more to market a product than to produce

it. And more of almost everything–money, international presence, branding and

plain marketing savvy. It also requires a different mindset–the ability to

pour money down a project on which no returns are foreseeable.

None of these are typical characteristics of a nascent

industry. This is the major reason why the profile of Indian product offerings

looks the way it does: heavy on banking, telecom and enterprise. No operating

systems or databases… though one wonders what happened to Wipro’s Unix

offering Winix.

Being in niche verticals like banking saves companies the

cost of saturation advertising. They are able, instead, to look at more focussed

branding exercises for their target audience.

Infosys, for instance, has a very clear three-stage marketing

strategy for entry into international markets for its banking products. In what

it calls its ‘Entry Focus’, not only does it carry out market research and

gap analysis, it also does preliminary brand-building and market-sensitization.

This is largely through select advertisements, participation in seminars and

some press interviews that build up visibility. They also enter into services

and sales partnerships locally and leverage that for local presence till they

get their first breakthrough.

In Stage II, or what it calls its ‘Growth Focus’, Infosys

begins to get aggressive, targeting 20-25% of all new deals. Says Merwin,

"Bankers are known to be conservative. They have to be, for they deal with

others’ money. Therefore, a breakthrough is not very easy. But the same

conservatism that works against us in the beginning begins to work for us after

we make our first sale. And increases with every sale. Being a tried and tested

product is a big plus after that." By the time the company comes to its

final consolidation stage, Infosys begins to look at 40% of all new deals.

Forging partnerships

Whatever their particular marketing strategies may be, local

participation is crucial for all companies in the international market. Product

sales require knowledge of local markets, local lingo and extensive local

presence. iFlex deals with this through local hiring. Says Senthil: "As

much as possible, we are using local people for marketing and sales. The

customer-facing team almost anywhere is likely to be local–the Netherlands, UK

or America." Infosys, on the other hand, deals with this through local

partnerships. "Our sales partners in every market handle the front end,

including making day-to-day calls and providing the first level of

support," says Merwin. Their service partners provide higher levels of

support, including, often, implementation as well.

Finally, however, both companies have found that partnering

with infrastructure vendors like HP, Compaq, IBM and Digital works well. For

instance, the iFlex-IBM relationship happened, says Senthil, "when we

started succeeding in a space we weren’t present before. They were in the

AS400 and S390 space when the Unix solution started winning. So we signed up a

technology partnership in 1999. Subsequently, they came to us and told us how

the MQ series could be used to integrate Flexcube".

Finally, however, no one thing is sufficient. Says Girish A

Menon, vice-president (global marketing and planning) at Ramco Systems,

"The strategy has to be multi-pronged. Marketing a product, particularly an

enterprise solution, depends a lot on the maturity level of the market


Ramco’s marketing strategy is also focussed around

partnerships in the international market. Says Menon, "To this end, we’ve

put in place a global partnership program–Ramco Value Net." The most

significant partnership the company has forged in recent times is with aviation

major Boeing, under which the latter will market Ramco’s aviation solutions,

together with its own modules under the brand-name Enterprise One.

But do these sound like stories of intermittent successes? Of

exceptions rather than the rule?

The days ahead…

Perhaps. A lot is changing, however. Indian software giants

today have more cash available for investment in R&D, their brand value is

high and growing, technology issues are no longer an impediment as they once

used to be and most of the big companies today are very brand-savvy. They also

have a huge advantage–coming from a services and solutions background, these

companies have built up considerable domain expertise in verticals like telecom,

retail, logistics and VLSI and chip design. It may be a slower route to

productization, but it is also a very sure route.

Quite clearly, the Indian software products story has not

ended. It is just beginning. Watch this space.

By Sarita Rani in

Bangalore  Inputs from Shrikanth G in Chennai, Meghna Sharma in Delhi and

Easwardas N in Mumbai

Cash Cow...


do you think about the Indian software industry’s efforts to develop and

market software products?

In the early years, Indian companies chose to focus on software services due to
better risk-reward metrics in the services segment. As the industry matures and

large world-class Indian players emerge–in the next two years, India will have

five $1-billion-plus software companies–their appetite for risk and hence

product development will increase. As they gain domain expertise, say in the

financial services or telecom, product development will increase even further.

Is productization important?

During these years, we have built up strong domain knowledge, achieved

global exposure as well as a global brand equity in the software services

sector. All this provides a good stepping stone for Indian IT companies to start

looking at developing software products. Products would help enhance the Indian

IT brand further.

What verticals should Indian companies target?

Some of the verticals that Indian IT companies can look at for building products
include, banking, telecom, retail, hotel, aviation and insurance. Indian

companies broadly have opportunities in three arenas–enterprise software,

consumer and desktop software and mobile computing and embedded software. In the

enterprise software and consumer and desktop software space, Indian companies

can develop horizontal applications that deliver specific functionality and

features and complement a broad set of existing applications. In addition,

within the enterprise space, there is a significant demand for integration

between existing and emerging applications (such as e-commerce integrating with

financial applications residing on mainframes). Indian companies already

providing integration services on a customized basis have the opportunity to ‘productize’

their offerings and reuse their expertise across multiple client solutions.

Also, we have seen that e-commerce is creating new software product

categories for enterprise computing and Indian companies can provide significant

components of this technology and also productize e-commerce implementation


Deregulatory steps the government needs to take...

The government can help companies mobilize resources and create a suitable

climate for more VC funding in this area. Government funded laboratories,

R&D centers and academic institutions such as IITs should be encouraged to

invest in and carry out research in this area. The government can also provide

support via tax holidays and exemption in duties for IT companies that develop


Nasscom and the software products segment...

Nasscom on an ongoing basis is working with the industry in providing relevant
industry information that is required by companies who want to venture into this

area. Nasscom provides forums for best practice sharing where successful Indian

and global companies share their experience on developing products. We also

bring out research studies which help companies identify relevant opportunities

and sharing real life examples of companies who have successfully developed


Some significant Indian software products...

Some Indian companies who have developed products which are marketed in global
markets include iFlex Technologies’ banking product called ‘Flexcube’;

Infosys Technologies’ banking automation product called Bancs 2000 (it is now

called Finacle); Talisma has a CRM product; Ramco Systems has an ERP solution

called ‘Marshal’; TCS recently developed MasterCraft, which helps software

design and development teams in requirement analysis, modeling and automatic

code generation. Even a startup like Adamya Technologies has developed embedded

software which is the world’s smallest Bluetooth stack.

Meghna Sharma