New Delhi Times

Since India has the second largest pool of programmers in the world, it is not surprising that a large share of world’s software development happens here. However, even with such an abundance of technical manpower, the domestic market is woefully under served. There are hardly any software packages written primarily for the Indian end user. Companies like Microsoft are attempting to cater to the Indian market by localizing Office and Windows. But that is more of an after thought. Word wasn’t developed with the Indian customer in mind. It is intriguing that there are very few Indian software companies that create domestic software packages. The reasons for this, while obvious, are worth listing:
1. Huge margins in outsourced projects: Serving clients in US and Europe is much more profitable than serving the domestic market. The margins are very high and there is so much business available right now, that Indian software companies can choose to ignore the domestic market.
2. Piracy: Piracy is rampant in India. Microsoft or Adobe can still make profits because majority of their sales happen in relatively low piracy zones like US. However, if a software package was developed only for the Indian market, piracy will kill it no time.
3. Low computer penetration: The target market for domestic software is very small.
4. Even lower broadband penetration: Many interesting applications (voice, video on demand etc) require broadband and always connected computers. Broadband costs are still high and computers are not always on or always connected.