IDC expects independent software vendors to be key influencers in unlocking India’s potential for large global technology vendors

In its latest research, IDC finds that the dynamic environment in the technology space is pushing independent software vendors (ISVs) to invest heavily in R&D. In order to flourish in the same environment shared with global software giants such as Microsoft, Oracle and SAP, ISVs in India along with their local counterparts in other major Asia/Pacific markets are leaning towards domain specific applications. The ever-growing competition in both local and international landscape has driven local ISVs to innovate and create unique expertise as providers of applications serving particular market segments; providers of complementary applications to big industry players; or to position themselves for acquisition.
Sureshpal Singh, Senior Research Manager of IDC’s Asia/Pacific Consulting, SMB and Channels Research, comments, “A textbook example that many local ISVs in India would aspire to emulate is how Infosys leveraged its Finacle core banking application to become hugely influential in the FSI space and thus attracting a technology alliance with Oracle. Finacle has now been closely integrated with Oracle's E-Business Suite of applications (Oracle General Ledger and Oracle Financial Services Applications), creating access to new customers and markets for both companies. Another prime example is how iFlex, another influential Indian based core banking ISV, was recently acquired by Oracle.”

In its recently released report "Most Interesting ISVs in India, 2007 and 2008" (Doc #AP678101Q, April 2008), IDC has identified 21 noteworthy up-and-coming ISVs in India. This study is part of IDC’s Asia/Pacific ISV research, which looks at local ISVs within a number of key markets in the Asia/Pacific region. Through exclusive interviews and leveraging IDC's existing information base, IDC identified a number of ISVs in India that are still mid-sized but already demonstrating high revenue growth in addition to providing in-demand applications that serve software markets such as enterprise resource management; contact centers; as well as vertical-specific applications for the telecom, healthcare, and FSI industry.

Alice Lai, Research Manager of IDC’s Asia/Pacific Channels Research adds, “Currently, these ISVs are still below the radar of most international vendors but may grow in terms of vehicles of influence into the end-user segments they address. Our aim is to provide key company profiles, product/solution unique selling propositions and positioning, go-to-market strategies, and IDC’s analysis for the 21 ISVs, which our in-country analysts felt deserve attention. “
According to IDC’s findings, the India domestic IT industry will continue to be the fastest-growing market in the Asia/Pacific region. The size of the domestic IT market was US$19,564.6 million in 2007, which is expected to double in the next five years to reach US$40,334.9 million by 2012, representing a five-year CAGR of 15.6%.

Sureshpal concludes, “IDC believes that ISVs are key influencers in the selection process for the other components in the solution stack. Many end-users are selecting hardware platforms and brands along with database software based on the technology alliances and the recommendations of the provider of their core software applications. In return, these recommendations are based on the technology alliances that the ISV has. We expect ISVs to continue to grow in importance as a key route to unlock the potential that India holds for large global technology vendors.”

This research complements IDC's other channels related syndicated research offering, named as Asia/Pacific Channel Databooks. This is a database of the Top 100 local channels in 6 Asia/Pacific markets and profiles the largest local ISVs in terms of revenue earnings, in addition to the Top local Systems Integrators, Distributors and Corporate Resellers.

IDC