Saturday 25 August 2012

India Is Well-positioned to Win the Race in the Field of Custom Application Development

The boom of custom application development is a relatively new phenomenon, which occurred only after computer manufacturers have switched to non-embed software solutions and open-source software platforms gained popularity. Originally, software developers in emerging markets like India, the former Soviet Union and Eastern Europe, Latin and South America, have no access to software documentation required to develop a reliable custom-made solution based on licensed software. Following a series of court battles and overall change in market philosophy, however, today's software market allows for creation of virtually unlimited number of customized software solutions in every field of life.

These markets developments, for their part, allowed software developers and vendors across the world to compete on equal terms with large multinationals, with custom application developing now considered a major software market segment. New software development centers emerged, mainly in Asia/Pacific region and Central and Eastern Europe, where scores of gifted and well-educated software developers started making custom software to meet requirements of local markets, originally, before setting foot in new markets abroad. Thus, today's custom application development is often outsourced to software firms in these regions, with India leading the pack in the sphere of software outsourcing.
This is the big picture in the field of custom application development and it is well-documented in numerous reports and market research papers. A good number of analysts, however, tend to focus on obvious economic drivers that have led to this market situation, apparently underestimating other factors which influence today's market for custom-made software applications.

First of all, major educational hubs in the field are no more concentrated in Europe and the United States; India has managed to build a network of reputable educational institutions in the sphere of computer hardware and software, while Eastern Europe and former Soviet Union traditionally produce well-educated professionals in the field. Secondly, all and every student now has access to myriads of open-source software solutions from which to borrow ideas and functionality, or on the basis of which to build a customized software application. Free and open-source operating systems compete on equal terms with licensed rivals, thus opening the gate to creation of entirely custom-made solutions, from the underlying operating system to business software to applications for individual users. This, combined with lower labor costs in Asia/Pacific, Eastern Europe, and Latin America, made these regions major suppliers of customized software.

Some economic experts blame software outsourcing for loss of jobs in their respective country, urging adoption of legislation to protect local software developers. On the surface, there is sound economic logic in such an approach. An in-depth market analysis, however, would reveal that adoption of such restrictions shall only decrease competitiveness, resulting in higher business expenditures and regulated labor market, which does not stimulate positive economic development in the long run.
For example, India is leading world provider of custom application development services through outsourcing thanks to a combination of factors that are natural for a free-market economy; namely, well-educated software experts, lower labor costs, access to and investment into technologies, and development of research and development hubs, where large-scale projects can be completed on time. These are factors quite similar to the competitive advantages provided by the Silicon Valley in the early days of the software industry, minus the lower payroll costs.

Anyway, custom application development market cannot be re-shaped through administrative measures for good reasons; businesses around the world have need for reliable tailored applications and need them cheap. Thus, development of custom-made software is driven by the very same market forces that drive any other industry and outsourcing of custom application development to countries like India is an inevitable process whose roots can be traced to the basics of entrepreneurship: buy cheap, sell dear. To put it simply, custom application development is destined to flourish and countries like India are well positioned to grab even bigger market share in this lucrative market.


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