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Intellectual Properties for Indian ISVs: No More an Oasis

There was a time when India’s global recognition as a software giant was primarily due to its prowess in IT services. This brand equity was further augmented with the growing clout of BPOs in the global map; the coinage of terms like ‘Bangalored’ emphasized the growing Indian-ization of IT services. However, even in those heady days many lamented the lack of development of software products by Indian software products.

The paradigm has shifted significantly by 2019. While India still remains a name to reckon with in IT services, Nasscom estimates the worth of the Indian software products market at $7bn and growing annually at a rate of 9.5% annually. More precisely, this market is supported by 3,720 Independent Software Vendors (ISVs) with their own software IPs (Intellectual Properties) of different sizes addressing different verticals.

More and more ISVs are coming to market with their unique IPs on different SaaS solutions. These solutions are leveraging Internet, analytics, mobile and social networks as well. While many of the large Indian IT services players too have grown their software products LoBs, the ISV ecosystem mainly consists of relatively older and larger players and smaller start-ups who have come up in the last 2-3 years.

Challenges for ISVs to Develop Own IPs

Small, agile and nimble ISVs can turn fast with the market trends (both technical and business trends) but often suffer from lack of sufficient time to develop efficient processes and procedures. Large and established ISVs have advantage of an existing customer base and efficient operations but changing faster with the time is always a challenge. This Ying and Yang of agility to meet market demand and efficiency to run the business is core to many ISV challenges.

Diving deeper, all ISVs are constrained by the quality of support from all stakeholders ranging from investors, manpower, partners and customers. Identifying the right investor who allows the ISVs to experiment with multiple technologies, see the bigger picture and stand by during initial days of failures is extremely critical. Many ISVs back out of the long and complicated journey required to successfully commercialize a software product due to investors not willing to gestate their projects with adequate time and money.

Another common failing for Indian ISVs in developing their own IPs is due to lack of an adequately skilled workforce. Finding an in-house technology team that has delivered end-to-end lifecycle product development and getting technologists with deep domain knowledge in specific sectors are two Achilles Heels for the ISVs. And even as in a few cases if the required manpower has been developed, it is next to impossible for the ISVs to retain these talent.

Another deterrent for many ISVs in developing their own IPs comes from the lack of a serious technology partner who is willing to share the risk and work through the entire product lifecycle. Often it is not possible to get an appropriate tech partner who has a great senior team of technologists. What this means is the partner ecosystem itself lacks entities who can successfully promote the software products from the ISVs. Traditionally, the smaller ISVs lack in marketing muscles and require the handolding of an enthusiastic partner to propagate the virtues of the IPs developed by them.

Last but not the least, even customers have a role to play in sustaining the journeys of these ISVs. There are instances when ISVs are able to sell their IPs either through word of mouth or through their industry connections. Unless the customer subsequently supports the product through maintenance and upgrade lifecycle, it is however difficult for these IPs to penetrate the market further. The ISVs also need consistent performance of their products that deliver end-user satisfaction and retention and then these customers themselves can become their extended marketing arms for future promotions of the IPs.

Best Practices to Protect IPs

For many ISVs, the domestic market might not be commercially lucrative in the initial run. These ISVs often look at selling their software products to overseas clients purely for commercial benefits. While both action and rationale are purely laudable, it makes sense to follow some best practices when dealing with offshore clients.

The first and foremost step is to get an overview of the different initiatives and laws undertaken by the offshore country to protect Intellectual Property. Subsequently, it is imperative for the ISVs to examine the work entities that can be copyrighted or patented. An ongoing evaluation of the company’s work entities to identify copyright protection or patents is very critical. While copyrighting, it is important to make sure that such a protection will be valid in the country of offshore activity. And lastly if the ISV plans to enter into a vendor relationship with an offshore entity, extreme caution has to be exercised in understanding the vendor’s history with respect to any Intellectual property violations.

Notwithstanding constraints, the ISVs must set up internal IP protection teams to handle these activities. Intellectual property protection is an ongoing business responsibility and not a one-time act. This makes it very critical to have a team in the company that is responsible for monitoring their IP violations. In executing a contract with the offshore vendor, it is important to define a separate IP Violation clause and define its consequences. Some ISVs often sign the contract with the onsite entity of the offshore vendor as it gives them more leverage to take any legal action if they have to. Lastly, it is important to seek a reference check for all the team members of the offshore team to make sure there is no IP violation case history behind the individual.

Enforcing a central repository for all the code and documents also improve the overall efficiency, and avoid numerous placeholders for critical documents and code. ISVs should follow this up with the subsequent actions. Perform a periodic IP audit and examine any new work that can be copy righted. Remove all the unauthorized software/product, reiterate the importance of IP and look into all the place holders of the code and documents. And finally assign appropriate ownership to the critical documents and update any change of ownership to patents. In all the company meetings and presentations, the ISVs should make sure the appropriate references and credits are given to the owner of the work (be it internal or external). Making this practice a habit will raise the standards of the employees to acknowledge and respect and protect other people’s work.

Domestic Challenges on IPs for ISVs

Many ISVs are now developing their IPs on open source software. A common fallacy of many domestic customers is to treat open source as free software. Open Source is defined as a software-licensing model where the source code of the software is typically made available royalty-free to the users of the software, under terms allowing redistribution, modification and addition, though often with certain restrictions. However, it does not generally signify Free Software, as a developer can charge cash for the open-source software (OSS) they make or to which they contribute. OSS is easily downloadable without any restrictions, provides more flexibility and long-term stability, lowers the cost of starting a business, and allows for rapid innovation.

In India’s cost-sensitive market, ISVs have to decide if there is a business case to build a cloud to run their production software or host SaaS solution in a public cloud or hosted cloud. There are both qualitative and quantitative factors to consider. Qualitative analysis can include new or existing software solution, security, compliance, availability, global reach requirements, IP protection, existing IT resources in-house or lack there-of. Quantitative analysis can include cost per user considering cost of compute, network, storage, support, training, software license, third party integration, human resource cost for development and support.

Pricing software solution using pay-per-use model is a challenge that is different from pricing for perpetual license. Pricing needs to be based on the market’s willingness to pay, as competition is just a click away. It also requires considerations and clear understanding that ISVs may not have many months to recover R&D cost due to competitive threats. Hence, it requires clear planning on how fast ISV can get enough customers to reach a breakeven point to cover R&D, customer acquisition & operation cost.

Historically, ISVs are responsible for application development, feature and functionalities while customers are responsible for managing them in their own environment. With SaaS, operating and supporting is also part of ISV responsibilities. The DevOps software development methodology and considerations for operations is an important evolution compared to historically popular Waterfall or Agile methodologies. The DevOps methodology of software development is claimed to reduce approximately 50% time as well as cost for long term operations support.

Success of ISVs does not only rely on the direct customers but also equality important are ecosystem partners. So ISVs also need to develop APIs for their key feature functionalities for partners to take advantage of. This is one of the very important considerations for DevOps methodology to address needs of development, operations and integration.

Choosing the Right ISV: Best Practices for CIOs

Identify the IP Specializations of the ISVs

Different ISVs may have specific areas of expertise in how they serve their customers. Know the specializations of their software products most relevant to your industry, and make sure that the ISV you choose can provide them.

Examine the Reputation of the ISVs

Check customer references and reviews of the software products the ISVs have claimed to have developed. Make sure there are no pending litigations around previous IP violations.

Testing Capabilities of ISVs

Development is one thing. Effectively testing a product is another. Make sure that the ISV partner you choose does adequate software testing alongside development, so that you are never saddled with a half-baked product.

Check Legacy of the ISV

What kinds of partnerships do they currently hold? How long have they been in partnership with those groups or organizations? Examining a company’s client legacy, as well as their communal impact, can help you identify a partner that’s truly reputable. Checking their IP history is also critical.

List of 100 Indian ISVs

  1. A M Webtech
  2. Fourtek IT Solutions
  3. Coding Brains Software Solutions
  4. Triazine Software
  5. Appinventiv
  6. Fluper Limited
  7. QSS Technosoft
  8. Time Dynamo
  9. AskSid
  10. Routematic
  11. Projectcatalyst Internet
  12. QNu Labs
  13. Slabs Technologies
  14. Mynd Solutionsd
  15. KirtiLabs
  16. Wellthy Therputics
  17. Tripto
  18. Vehant Technologies
  19. Atlas Systems
  20. ITCube
  21. Enaviya
  22. ThinkPalm
  23. Unified Infotech
  24. Capital Numbers
  25. Hidden Brains InfoTech
  26. Simform
  27. Iflexion
  28. IndiaNIC
  29. Cyber Infrastructure
  30. Syberry
  31. Sunflower Lab
  32. OPenGeeksLab
  33. Belatrix Software
  34. Dockyard
  35. Promatics Technologies
  36. Brights
  37. Zealous System
  38. NMG
  39. OpenXcell
  40. Swenson HE
  41. ZCO corporation
  42. Apptension
  43. Mavin Infotech
  44. Clavax Technologies
  45. IPIX Tech Services
  46. iViz Techno Solutions
  47. LeewayHertz Technologies
  48. Mann-India Technologies Private Limited
  49. MedSphere Technologies
  50. Myndsolutions
  51. OrangeScape Technologies
  52. PharmARC Analytic Solutions
  53. PK4 Software Technologies
  54. Proteans Software Soultions
  55. Robust Designs
  56. S7 Software Solutions
  57. Savi Infoservices
  58. Shell Transource
  59. Skelta Software
  60. Sloka Telecom
  61. SpadeWorx Software Services
  62. Srishti Software Applications
  63. Trendyworks Technologies
  64. ValueNotes Database
  65. Vmukti Solutions
  66. Wirkle Technologies
  1. ABM Knowledgeware
  2. A1 Future Technologies
  3. AbsolutData Research & Analytics
  4. Annik Technology
  5. Arctern Consulting
  6. Azure Knowledge Corporation
  7. Catura Systems
  8. Comat Technologies
  9. Compulink
  10. CresTech Software Systems
  11. Drishti Soft Solutions
  12. Druvaa Software
  13. EmPower Research
  14. Eperium Business Solutions
  15. Estel Technologies
  16. Evolutionary Systems
  17. Fifth Generation Technologies
  18. Future Focus Infotech
  19. GeBBS Healthcare Solutions
  1. Ingenius Technologies
  2. Network Techlab
  3. Syndrome Technologies
  4. Netspider Infotech
  5. LDS Infotech
  6. Searce
  7. Insight Business Machines
  8. Techlink Infoware
  9. Infobahn Technical Solutions
  10. Softline Services
  11. eMudhra
  12. eSmart Systems
  13. AgileThought
  14. Wapice
  15. Finastra


Why Intellectual property for ISVs

Intellectual property is a trademark that lasts indefinitely but it needs renewal at a fixed frequency.

A copyright lasts for the whole of the creator’s life plus 60 years after his death.

A parent lasts for 20 years after filing and then becomes public property.

Now ISVs mostly develop customized software solutions.  The very nature of customization as per requirement rules out copyright,  as the software code cannot remain unchanged for 60 years.

Even the 20 years as applicable for a patent is not feasible.  Besides a patent lapses into a public property whereas ISV silutions are ownership driven either by the developers or the customers.

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