Two Ways To Look At The Software Industry

I have worked in the software industry for more than 3 years, this includes working in 2 very contrasting environments and which has made me see many differences. This is an attempt to briefly describe the practical differences between different types of organizations in the Software Industry.

When we think of Software companies we think of Infosys, TCS, Google, Microsoft, Adobe etc. These companies fall into one of two categories namely Product based and Service Based. You may add consulting as a third category but in my opinion that will come under Service Based.

I will start with an introduction to some of the interesting aspects of the both types.

Service Based:

Everything in a Service Based company is a project. The “idea” is a requirement of a client and services company gets paid off based on the number hours that are put in per employee. Sometimes the projects are Fixed Price, that is the estimation is done by experts in the Services company and provide a proposal to the customer. Once the customer approves it, it is up to the company to deliver the project on time whether there costs go high than estimated or if actually they earn a profit.

Maintenance projects are revenue driven projects and service companies rely heavily a lot on these projects. Mostly these are some piece of code which the customer has bought from a costly vendor and would want low cost maintenance. From a developer point of view the learning in such projects are limited to understanding the product. This becomes more disastrous for a developer when the project is based on a Third Party Proprietary Software and not based on Open Standards.

Another aspect of Service based company is the bench strength that it has to maintain such that it can commit new deliverables to a prospective customer.

Product Based:

This would be interesting to many people as most people work for services in India.

Idea: There is no Client requirements. But an identified potential market where the developed software will have:

1. Millions of users.

2. Niche clients.

The idea is generally is the brain child of a group of very talented and smart individuals who learn from the current market scenario and identify a Solution that would be helpful to many organizations in solving their problem or which will help a few Big Organizations in solving a very complex problem for which not many solutions are available.

Sometimes these ideas become a huge Success and sometimes dreams are shattered and companies are closed. But I will always admire people who at least had the guts to work on a venture that they always dreamed off. And of course they won’t have any regrets of not trying out.

Ideally there won’t be any person allocated to bench in a product company.

My Next post will be in continuation to this which will include more technical differences and how software development is planned in these organizations.

Comments are humbly accepted 🙂

4 Responses to “Two Ways To Look At The Software Industry”
  1. palakmathur says:

    Nice write-up on Software Industry. It would be great that you could come up with some exciting articles on methodologies used in both kind of companies.

  2. Russell says:

    Thanks for the insight

  3. Pushkin says:

    Do share ur personal experience (if any) as well

  4. Satish says:

    what do u suggest for me :D.. i am all cooked up with so called ‘IT’ world

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