Indian Computer Science (CS) & Information Technology (IT) Academic Reform Activism Consolidated Blog Document

Information Technology - Products vs. Services

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Information Technology - Products vs. Services

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Last updated on 6th May 2014

Here is an interesting blog post by Dr. S. Ramani titled, Information Technology Products versus Services,

[Dr S. Ramani is a distinguished veteran of the Indian Information Technology world. For those who would like to know more about him, Dr. Ramani earned a doctoral degree from IIT Bombay and worked as a post-doctoral research associate at Carnegie Mellon University (CMU), USA. He started his career in TIFR Mumbai and went on to be the first director of National Centre for Software Technology (NCST) in Mumbai (now CDAC Mumbai, from 1985 to 2000. NCST helped him play a significant role in creating India's academic network, ERNET, which brought the Internet to India in 1987, and perhaps mainly for this contribution, Dr. S. Ramani was recently (2014) inducted into the Internet Hall of Fame,  In 2001 he became the first director of HP Labs., India, and played a key role in setting it up. He has been on the expert panel of the ICT task force of the UN and is a past-president and current fellow of the Computer Society of India.

Sources: His blogger profile:,]

Given below is a comment (slightly edited to fix a typo) that I added to Dr. Ramani's blog post:

My view based on my experience of the Bombay software export field in the 80s and 90s, is that, during that period, India was not that much of a viable market for fledgeling software products. It was far easier and far more profitable to offer software development services to economically developed countries like in the Western world or, in some rare cases, tie up with some NRI(s) based in the USA to develop products for the US market using software developers in India.

In stark contrast, in the 80s and 90s, the US market was a fantastic one for fledgeling software products, even if many products failed. Customers were willing to try out new software that promised to fulfill some of their needs or improve their business in some way, and the software products that satisfied customers at reasonable price, succeeded, sometimes wildly succeeded. However, it was important to have a very good understanding of the customer needs and business and also be able to provide very quick-turnaround support for any issues faced by the customer. Due to that, attempting to create software products for the US market, based entirely in India, was not really working out - the US based competition was able to do far better.

I don't know what the picture is about the Indian market today. I would presume that now there may be a decent market in India itself for Indian software products.

Regarding B.E./B.Tech. and MBA being a good combo for company leaders, I am not so sure about it in the case of software product companies. I think that combo works out great for software services companies. For the software product companies, as you wrote, passion is a vital factor in such company founders and leaders. Risk-taking ability, brilliance in understanding the niche areas the product(s) cater to and mastery of technology are vital. The finance bit, IMHO, is not that hard to understand for a software product company start-up and does not really need a business administration or finance degree.

I tend to agree with all four of your suggestions regarding education to encourage software (and hardware) entrepreneurship. I would like to add a point about education to encourage software product development skills:

*) Students should study and then try hard to contribute to great open-source software products out there as part of their degree work. Just imagine the confidence a Computer Science (CS) or Information Technology (IT) graduate/post-graduate would have if her/his contribution got accepted. Unfortunately, the culture in most Indian CS & IT departments does not promote and reward (by good grades) such work. Many times the teaching faculty themselves are not so comfortable with in-depth software development, and even tend to look down upon software development work as low-calibre work (as against producing research publications). My considered view on the matter is that a software product developer/visualizer/creator has to first and foremost be fluent in software development - coding fluency is to software creation what linguistic fluency is to creative writing. That gives the foundation for trying out various ideas. Adding strong research skills/insights/ideas to a solid-base of software development opens up tremendous opportunities for software product creation. However, even top research skills if not supported by a strong software development skill base, will lead to self-doubt as the person may not be able to, by himself/herself, confirm/validate his/her research ideas through software prototypes.

Wednesday, April 30, 2014

Srinvasan Ramani - First Indian perhaps in Internet Hall of Fame; Not Agriculture vs. IT but both Agriculture and IT

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Dr. Srinavasan Ramani, well known during my days (80s and 90s) in the Bombay/Mumbai software export industry as director of National Centre for Software Technology,, has been inducted into the Internet Hall of Fame (2014 inductee), Perhaps he is the first Indian to be given that honour (BTW the Internet Hall of Fame started in 2012).

Recently Dr. Ramani also wrote an article in The Hindu, An opportunity seized but not fulfilled,, which has some references to IT and agriculture.

An extract from the article:

A friend and I recently looked back a few decades, talking about how technology and professional education have created a new economic sector. I recalled how during a visit to an agricultural research institute (it must have been the late-1990s) an official there mentioned that the commercial value of sorghum grown in India was $2 billion a year.

Those days, the Santa Cruz Export Promotion Zone near Mumbai was the star in India’s software exports. Sharing a hundred acres of land with gem and jewellery manufacturers, and employing 50,000 to 60,000 employees, the software units in SEEPZ earned around $2 billion a year. Look at the difference in productivity.

Of course, it is not the dollar value that predominates. Sorghum cultivation sustained hundreds of millions of people, and gave them employment. But the point is the growing importance of software and services export in the Indian economy, from what is commonly called the Information Technology (IT) and IT Enabled Services (ITES) sector.

--- end extract ---

Two comments of mine appear on the article's web page. They appear under the name of Ravi S. as the new comments system in The Hindu truncated Iyer from my name :). Further the comments system collapsed my line breaks and so for better readability, I have introduced appropriate line-breaks in the reproduced comments of mine below:

Congratulations to Dr. S. Ramani for being inducted into the Internet Hall of Fame. Perhaps he is the first Indian to be given that honour.

As somebody who spent most of his software career in SEEPZ, Bombay (mentioned in the article) from 1984 to 2002, I tend to agree with the point about difference in productivity but also with the vital point about the vast number of people sustained by agriculture in India, (as against the comparatively tiny set of Indian IT professionals in the 90s). Perhaps now is the right time for Indian IT to contribute in a big way to Indian sectors of agriculture, IT enabled education (both primary, secondary and higher education) etc. which can benefit vast numbers of people in our country.

--- end first comment ---

A couple of other comments misunderstood Dr. Ramani's comparison to be a slight to Indian agriculture. I responded to them as follows:

@sameer and Ravi Natarajan

I don't think Dr. Ramani is denying the immense contribution of agricultural scientists as well as Indian farmers to the Indian people at large including Indian IT professionals. All Indians must be grateful to the Indian agricultural community as they provide the 1.25 billion of us food and contribute to clothing as well.

But it cannot be denied that aspirations of Indian youngsters today including rural Indian youngsters and children of farmers is to lead a far more comfortable life than their parents. Given current standards of productivity in Indian agricultural sector taken as a whole, as well as huge supply of people in the agricultural sector, agriculture is typically not a profession of choice of such Indian youngsters. So we need to improve productivity of Indian agriculture (using IT?) and also provide other avenues like IT where India has made a name for itself in the global economy. It is not agriculture vs. IT - but both agriculture and IT.

--- end second comment ---

I was very pleased to receive a response from Dr. Srinivasan Ramani to a mail I sent him on the above. Further, he kindly permitted me to share the following part of his response on my blog:

Thank you for email and for the clarifications you have given to say that no slight is intended to agriculture. I am 100% aligned with you. It is just that we never thought the day would come when IT & ITES would account for more than food grains.

--- end Dr. Ramani response extract ---

Dr. Ramani, of course, means food grains in terms of monetary value (today). BTW Dr. Ramani is one of the pioneers of the Indian Computer Science and Information Technology (CS & IT) field and so would have seen the days (seventies or perhaps even earlier) when India was almost nowhere in CS & IT.

Later I noticed that Dr. Ramani has added the following comment on the article web page:

I hasten to add that the comparison was not at all meant to say anything negative about agriculture. Above all, agriculture gives employment to over 500 million Indians. Today, jobs matter to people more than anything else. The comparison was mainly motivated by the shock I got when I realized that IT & ITES have grown quite big. Let us not pit one sector against another. That would be like asking "Does your daughter need rotis? [Ravi: Roti is an Indian bread,] Or does she need to go to school?" We need good agriculture as well as good IT & ITES to create jobs and wealth for the country.


A correspondent added over email:

You can take the comparison further and see what software services companies do and what software product companies do. In India, average productivity (yearly revenue divided by staff strength) in the IT industry is somewhere between $30,000-$50,000 per year. Of course, fresh recruits cannot earn until they are trained and have some experience so companies that grow fast (and recruit, say, 40,000-50,000 fresh graduates each year) will have lower productivity than those who do not. But that can be taken into account.

Service companies outside India (e.g. Accenture etc.) have a productivity of around $120,000 a year. They offer their clients a 'blended' rate by combining lower cost Indian workers with higher cost workers from the West. Indian companies find that difficult to do because their initial advantage is the low cost they offer.

Now compare that with software product companies like Microsoft where the average earning(s) are somewhere from $300,000 - $400,000. However, they operate in a high risk market (1 in 10 product companies fail) and grow by acquisition (Microsoft acquired PowerPoint by buying a small company called Foresight). 

Thursday, May 15, 2014

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