BANGALORE, INDIA: With the National Association of Software and Services Companies' (NASSCOM) Product Conclave & Expo 2009 just round the corner, the IT city is all geared up to spread the red carpet for the new kids on the block, the Indian product companies.

Last year, the event witnessed about 300 participants and this time around too NASSCOM expects to see twice as many people attending the conclave and expo.

"Indian product companies are the new players in town. They are the hungry underdogs. They are the disruptors. For these companies, the recession is a favorable factor. During tough economic times customers become open to change and seek value," says Sharad Sharma, Chair, NASSCOM Product Forum.

Sharma talks in length in an exclusive interview with CIOL on the upcoming conclave and expo to be held on Oct 27 and 28. Excerpts:

CIOL: What is the objective behind NASSCOM Product conclave &expo?

Sharad Sharma: This conclave is not so much about building products but about building a product business. So there is a lot of emphasis on topics related to selling, channels, go-to-market strategies, competitive positioning, and winning in the marketplace.

In a way the driving objective behind the conclave and expo is to build on the recent momentum within the product ecosystem. There is an opportunity to do this by leveraging some favorable industry disruptions that are taking place in the technology, delivery and revenue model side. These disruptions are creating a level playing field for new global players including Indian companies.

CIOL: What are the challenges that you see in the marketplace today, especially in the product ecosystem?

SS: There are two main challenges that need to be addressed. One is how to build a great, and not just a good enough, product. 

Also, with the rise of domestic market, it has become possible to get much needed early feedback from friendly sophisticated customers, thus seeing a steady improvement in the quality of software products coming out of India companies.

The other challenge is about customer acquisitions. In the past, Indian companies had a penalty to pay for being far away from the US markets. This penalty manifested as a higher cost of customer acquisition and nullified the lower product development costs. This situation is now changing with the advent of Internet marketing.

Since Internet market is so targeted and therefore cost-effective, Indian companies are now able to sell to SMBs and even consumers in the US at a lower cost than before. This will open up new markets for Indian companies.

Despite the slowdown, the domestic market for software products is opening up. Three sectors are growing well and they are : SMBs, development platforms for e-gov projects and MVAS. NASSCOM has partnered with Mobile Monday, TiE, HeadStart, Proto.in for this conclave. I expect the India product ecosystem to gain momentum during these tough economic times.

CIOL: How will the conclave address these issues?

SS: To talk about the challenges and how to overcome them we have brought industry stalwarts such as Guy Kawasaki, Orna Berry, Rakesh Hukku and Romesh Bhandari as keynote speakers.

Our panel discussions are carefully curated to deliver actionable insights to the audience. In addition to keynotes and panel discussions, the conclave also has four workshops and six structured networking sessions. The networking sessions help startups connect to enterprise CIOs, SI channel partners, advisors, investors and even potential employees. 

CIOL: Indian IT industry is at a crucial juncture where Indian rupee seems to be strengthening as against dollar. Is this a matter of concern for the Indian outsourcing industry?

SS: IT Services and BPO industry has successfully built a proposition that you can get high quality services at a lower cost. So while dollar weakening has an impact, it can be offset by improved quality.

This formula is even more important for software products. First the prospective buyers have to be convinced that they are looking at a world-class product. Once that threshold is crossed, and the product is in the buyer's consideration set, do cost considerations kick in.

For Indian companies getting into the consideration set is a bigger challenge than dealing with dollar issues at this time.

CIOL: Even though India claims that it's out of slowdown and the outsourcing industry is recovering, studies say small fishes are finding it hard to survive in the present scenario? How does NASSCOM look at the issue?

SS: The IT Services and BPO business is rapidly consolidating the world over and small companies are finding the going tough.

However, in the software product space, the situation is reversed. Most of the excitement is among start-ups. It is the startups that have been quicker than bigger companies to leverage Internet market to lower their customer acquisition costs and open new segments in the US among SMB and consumers.

Even within the domestic market, start-ups have moved more quickly in the mobile value added services space. They are also befitting from the creation of a development tools market as India based SIs revamp their rapid application development frameworks and BPOs invest in products to build-out new platform-based services.

CIOL: How will the start-ups sustain, especially when venture capitals are shying off owing to slowdown?

SS: While slowdown in venture capital flows is a concern, bootstrapping is becoming more viable with capital intensity of new software product businesses coming down. The conclave focuses on this aspect in a plenary panel discussion. Naeem Zafar, who teaches Entrepreneurship at Haas Business School in Berkeley and is an authority on this subject, will be at the conclave to discuss this issue in depth.