What does it take for technology product companies to emerge in a service oriented industry: a case for India

Abstract

High Technology sector especially Information Technology in India has seen hyper growth over the last decade. Most of this growth has come from the IT services sector with only a miniscule contribution from the product sector. The lack of growth in the product space has been attributed to usual suspects that include weak innovation ecosystem, scarce seed capital, poor product management talent pool and the nascent domestic market for products. One of the important reasons cited for the weak innovation ecosystem has been the near absence of industry-academia relationship and lack of original research in our Universities that have traditionally served as the hotbed of high-tech enterprise in other parts of the World. In this study, some of these facts are investigated by looking closely at the genesis and growth of some of the successful high tech companies primarily from United States and Israel. The study looks at both the players that started with platform products such as Microsoft, Oracle and Cisco as well as those that started with application products such as SAP, Google and Adobe. To understand the genesis of these firms, their early histories have been studied in detail. The factors that are investigated are the origin of founders, initial angel funding, presence of a catalyst, birth in an industry cluster, local market and the nature of products viz. application and platform. We also look for the inflection point that resulted into rapid growth for these companies. To understand the growth phase, factors such as active building of strategic and marketing alliances, collaboration for technology development, year of going public, additional venture funding in the growth stage, early internationalization and organizational restructuring in the growth stage have been observed.