India's software products sector: navigating the risks and rewards of going global

India's technology sector has long been synonymous with IT services and business process outsourcing, but a quieter and potentially more lucrative transformation is underway: the rise of homegrown software product companies. A Hindustan Times report from Mumbai examines the distinctive challenges and opportunities these companies face as they attempt to carve out global market share with proprietary platforms rather than billed man-hours.

The distinction matters enormously. Software product businesses, when they succeed, generate recurring subscription revenues, enjoy far higher margins than services firms, and can scale globally without a proportional increase in headcount. Indian companies like Zoho, Freshworks, and a growing roster of SaaS startups have demonstrated that the model is viable, but the path is littered with well-funded failures and near-misses that underestimated the cost of customer acquisition and competition from Silicon Valley giants.

Risks are real and multifaceted. Building a product requires sustained R&D investment with no guaranteed return, navigating complex intellectual property landscapes, and competing for engineering talent against both global tech firms and well-capitalised domestic startups. Distribution into enterprise markets abroad demands sales and marketing infrastructure that most Indian product companies have historically lacked.

Yet the rewards justify the attempt. India's deep engineering talent pool, relatively lower development costs, and growing domestic market as a test bed give homegrown product firms structural advantages. As reported by Hindustan Times, the sector is at an inflection point — with access to risk capital improving and a generation of founders with international experience now building the next wave of Indian software products.