new markets opening up for indian software product companies
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New Markets Opening up for Indian Software Product Companies by Pari Natarajan - ZinnovTRANSCRIPT
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New Markets Opening up for Indian Software Product Companies
Pari Natarajan,CEO, Zinnov
NASSCOM Product Conclave 2010
Zinnov Confidential
Snapshot of the BRICSS nations – significant contribution in the global landscape 2
BRICSS Nations – A Snapshot
BRICSS
45%
ROW55%
Population Contribution by BRICSS Countries
Split of IT Investments by Category, US$ Billion in 2010E
Worldwide Population = 6.7 Billion
China India Brazil South Korea
Russia South Africa
$0
$10
$20
$30
$40
$50
$60
$43.0
$9.5 $8.6$3.3
$8.3$4.1
$2.6
$2.9 $3.8
$5.7$3.2
$1.8
$8.4
$9.4 $8.9
$6.4 $3.9
$3.5
IT Equipment/ Hardware Software Products IT Services
$54.0
$21.8 $21.3$15.4 $15.4
$9.4
Note:Source: World Bank; NASSCOM; EITO Special Report on BRIC; Companiesandmarkets.com; Zinnov Analysis
4.7GDP(Trillion)
1.3 1.3 4.7 1.0 0.3
Zinnov Confidential
Global IT spending is springing back after a decline last year with a strong push from BRICSS markets
3
IT Spend Growth Trend by Regions/ Countries, 2010, In Constant Currency
Worldwide United States
Western Europe
Japan China Russia Brazil India South Africa
South Korea
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
6.0% 5.0%3.0%
0.5%
21.0%
17.0%
14.0% 13.0%
8.0%6.6%
Company Geography 2009 2008 2007
Microsoft US 57% 59% 61%Others 43% 41% 39%
IBMAmericas 43% 42% 43%EMEA 35% 37% 36%APAC 22% 21% 20%
CiscoAmericas 54% 54% 55%EMEA 21% 21% 21%Emerging Market & APAC 21% 22% 19%
Revenue Patterns of a Few Major Technology Companies
Note:Source: IDC; Annual Filings of Select Companies
Zinnov Confidential
BRICSS will contribute significantly to the global IT spend in the years to come 4
US38%
BRICSS9%
Others
53%
US36%
BRICSS
14%Others
50%
US34%
BRICSS
24%
Others
42%
Current IT Spend Share
2015 IT Spend Share
2020 IT Spend Share
Note:Source: IDC; Forrester, Zinnov Estimates
Total = US$ 1.5 Tr Total = US$ 2.0 Tr Total = US$ 2.7 Tr
42% of the incremental addition to the IT spend is going to come from BRICSS by 2020
Zinnov Confidential
Both enterprise and SMB opportunities will be significantly large in BRICSS nations 5
2003 2006 2010 2015 E0
100
200
300
400
500
600
700
13 19 336 142820
3356
1328
113
5550
51
1818
23
Brazil Russia India China S. KoreaS. Africa
Number of BRICSS Companies in the Forbes 2000 List
China
India
Brazil
Russia
South Korea
South Africa
42.0
35.0
5.9
6.9
5.6
2.9
Small & Medium Sized Businesses (SMBs) in BRICSS
(Millions)622
304
162125
Note:Source: Forbes2000 List for 2003, 06 & 10; IFRS.org; SME World; Perc.net; MSME Database; Zinnov Analysis
Zinnov Confidential
Many verticals are opening up their IT investments in newer technologies such as cloud computing
6
Key Verticals in the Forbes 2000 List – Number of Companies from BRICSS Nations
Note:Source: Forbes 2000; Zinnov analysis of Interviews with multiple senior stakeholders from the cloud ecosystem
Brazil Russia India China South Korea
South Africa Total
BFSI 6 3 22 29 15 4 79Construction & Materials 5 8 9 31 9 9 71Consumer Durables/ FMCG 5 2 5 25 12 3 52
Oil & Gas 3 8 6 3 2 1 23Utilities 5 2 6 6 2 21Transportation 1 9 4 1 15Telecommunications 1 3 2 1 1 2 10HiTech & ITeS 4 4 2 10Chemicals 2 2 3 1 8Media 1 1 2Healthcare & Pharma 1 1 2Aerospace & Defense 1 1Others 3 1 1 3 2 10TOTAL 33 28 56 113 51 23 304
*Government is a key vertical for all BRICSS nations
Zinnov Confidential
Indian product companies have a significant potential to scale in global markets – we have already seen success stories in the past
7
• Focused on building a brand for each product in the domestic market, due diligence on customer needs and product alignment
Branding & Innovation
• Partner with large financial institutions and work on multi-country deployments with similar needs
Globalization
Conceptualized products for domestic & African markets
Exporting products to developed markets in US/ Europe
Leveraged India as a test bed,
emerging markets as un-crowded
markets for penetration
Penetration in all major markets
worldwide
Fast growth of 28% CAGR for the last 10
years
Ranked the world’s highest selling
universal banking solution in 2002
Exporting products to other emerging markets with similar needs
Acquisition of majority stake by one of the largest
global product companies
Note:Source: Company website; annual reports; company press releases etc.
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