Growth models for top Indian software firms

Abstract

Indian software service providers are in an enviable position due to unprecedented market growth, overseas shortage of manpower, and access to high quality, low cost manpower within the country. We describe two alternate models for future growth of top Indian firms: manpower based growth (MBG) and knowledge based growth (KBG). In the first model, revenue growth is fuelled largely by growth in manpower. In the second model, the firm penetrates value added market segments, and growth is foelled by increasing the revenue per person. We evaluate these options in detail, after examining the current markets, the recent changes and trends, entry barriers to value added segments, client and market perceptions of Indian service providers, and changes needed within the firm.