Startups Find a Perfect Match in Desi App MakersDAWN OF A NEW ERA While top tech players Infosys and TCS

largely cater to customers abroad, upcoming firms are focusing on India, servicing the domestic demand for mobile-

era solutions

Contd…The startup boom in the country is propelling a parallel IT services industry. While established technology companies such as Infosys and TCS largely cater to overseas customers, upcoming firms are focusing on India, quenching the domestic demand for mobile-era solutions.“We started getting a lot of demand from Indian startups mid-last year,“ said Akash Takyar, who heads Gurgaon-based LeewayHertz Technologies. The seven-year-old company started as a US-focused business, but gets a fair share of business from India. As India becomes the world's fastest growing mobile-app market, traditional companies, banks, travel firms, and even startups are scrambling to get a make-over, channelling revenue into small and medium-sized app makers such as Space O, LeewayHertz and Australia's Appster.

Contd…“For every 10 customers, about six are startups,“ said Bhaval Patel of Space-O Technologies, which has a development office in Russia and a sales office in the US. Patel said the technology requirements of customers have become more complex since the company's inception five years ago. While customers sought website solutions in the past, now there are requirements for apps for mobile and wearable devices.Firms like LeewayHertz and Space-O, called offshore product development centres, are seeing a significant chunk of their revenue come from the Indian subcontinent. According to Clutch, a company that identifies top software and professional services firms, there are at least 250 app development companies in India today. Missing out are leading Indian IT services firms, which are not developers of choice for young startups. “The requirements from startups are very dynamic and fluid, something that large firms are not comfortable with, as the foreseeability is missing,“ said Sanchit Vir Gogia, CEO of Greyhound Research, an IT and telecom research and advisory firm.

Contd…Also, projects from startup clients typically are worth a couple of thousand rupees to a few lakh rupees, according to startups ET spoke with. Large Indian IT firms do not usually take up projects that do not yield them $3-5 million in revenue over a period of three years, said Gogia, adding these firms would likely enter the game when leaders in the telecom and banking, financial services and insurance segments start adopting a mobile-first technology.“IT services firms lack the product mindset and the agility to deliver on time,“ said Janakiram MSV , founder at advisory firm Janakiram & Associates. As a category leader is yet to emerge in this segment, the talent and opportunity has prompted overseas firms to pitch their tents in India.Australia-based Appster is planning to double its employee base in India to 700 by December 2016. “Not just startups, we are also getting a lot of business from cor porates in India, who want mobile apps,“ said Mark McDonald, CEO of Appster, which developed the mobile app for Carzonrent. The company is aiming for $100 million in revenue by 2018. Despite growing in size and numbers, app development firms say they are not spared from the same problems that plague all services companies.

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