Speaking on the sidelines of the ''Product Summit 2005', organised by Nasscom in association with IIM Bangalore, Nasscom president Kiran Karnik said that though the software industry in the country was strong in conceptual and integration skills, it lacked the infrastructure to take up R & D in areas like analog devices and others.
He said that if the Centre allowed software companies to utilise the infrastructure developed in specific areas like defence and other national scientific organisations, it would help the firms to counter the challenges to a great extent.
Karnik said even though the country had emerged as a major player in software services and development activities over the last two decades, the indigenous software product sector was at an early stage of development.
The country's software revenues from product sales, which was Rs 800 crore (Rs 8 billion) in 1999, stood at only Rs 1,860 crore (Rs 18.60 billion) at the end of 2005, he pointed out.
However, the revenue was likely to go up to Rs 2,500 crore (Rs 25 billion) by 2008 and Rs 3,500 crore (Rs 35 billion) by 2010 with an upsurge in the number of product firms in last three years, he said.
Karnik informed that the Indian product companies were facing financial burden with the new patent law and only 16 per cent of the software companies had patented their products and said the Centre should address this problem by floating specific funds.
He said that Nasscom had approached the finance ministry in this regard and exuded confidence that in the coming budget, the government would take positive steps to help the product companies.
Karnik said the government had a vital role to play in the development of the indigenous software product sector in the country. Creation of seed investments, specialist support programmers and marketing network was required to support the sector.
Countries such as Ireland, Israel, UK and Singapore were all emerging as strong locations for software development and each of these countries had strong government intervention and support.
The policies and support of the government in the future would prove crucial for the software product sector in the country, he added.
Deepak Ghaisas, CEO I-Flex-Solutions, and Prof T R Madanmohan were also present on the occasion and expressed solidarity with Karnik on the issues of opportunities for Indian IT service players in the product space.