Recently, a friend of mine moved back to India from the US, where he was working as a group product manager of a large accounting software company. Unaware of his recent move, when I called him after several months, it turned out he was working on a startup which was developing software to manage customer sales for Indian retailers.

Software products for sales, customer relationship management, managing loyalty programs, e-mail marketing, recruitment software, patient records management, etc. are common and used by large and small companies in developed countries. They have been used since the days of Visual Foxpro, dBase, Cobol, Powerbuilder, etc, and have gradually matured in both business processes and technical capabilities.

The question I posed to my friend was, "Why wouldn't the retailers use more established, mature tools which have been around for many years?" I got the reply, "Many years."

Indian businesses are relatively new to the Internet. A lot of them have been using e-mail as the primary tool for collaboration and communication. They have used it for "automating" various business functions. Apart from e-mail, most businesses have processes which are automated by combining humans and paper-record keeping. However, things are changing. Thanks to a recent push by various agencies, and visibility of such processes in multi-national organizations, Indian businesses have woken up to realize the benefits of technology and how it could boost efficiency. Slowly, these companies have started adopting local software vendors and have been automating pieces of their business processes. Leading to organic growth in the domestic tools supporting them.

Business software serves developed markets and supports mature organizations. It comes bundled with end-to-end automated processes, in an all-you-can-eat plan which ends up confounding the adopters. Indian companies are not ready to take the full-blown approach; instead they are taking the ‘give-me-this-feature-today' route. This is helping domestic software vendors to grow along with their customers.

The added benefit is the price-tag. Tools from large software companies are not priced right for the developing markets, and are expensive as both on-premise and Software-as-a-Service models. They look more like a premium product to most. Moreover, the complexities of local governance, complicated tax regime, rules and duties are vastly different from what's offered in most out-of-the-box offerings.

Pick a vertical such as loyalty management; I can count at least 5 companies right away who are serving various niches in this segment. Pick another one, say, CRM, there are many young software companies working on it. A founder of one such (Bangalore-based) startup tells me, "Why do I need to go global? In India, nobody knows about CRM!" No wonder, in 3 years his website now lists marquee mid-size manufacturing companies as his customers.

Indus Khaitan, Vice President, Bitzer Mobile.