Owing to economic crisis global software product companies have lowered their R&D spend and are looking to re-aligning their Market Focus (Emerging Markets), Business Models (SaaS), Sales and Marketing Strategies (Dealer & distribution network) and Product Development outsourcing strategies. Smaller software product companies are aggressively outsourcing core (Product development, Manufacturing etc) and support functions (Sales & marketing, Product Technical Support, HR, F&A etc) to low cost countries to reduce operational costs where as large companies still believe in the traditional in In-house development or Nearshore model. A large percentage of the global software companies R&D spend (~80%) is kept In-house (Home country) which we believe will come down drastically in the near future. Though outsourcing in this space may still happen in the lower end of value chain especially in the system software space but business application software and SaaS are expected to soon move up the R&D services value chain.
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