Re... tail

For a change, this post is less of my typical spur-of-the-moment spinning-wheels in the rooms upstairs. This post is about reasons I believe responsible for the fact that the local software product market is still in it's infancy. A subject I frequently ponder about; more frequently of late, and is prompted by something I read on here.

Since India started on the path to a free-market economy back in the early 1990s, it's software industry has acquired a name for itself. The population on the subcontinent has frequently been the subject of jokes on topics of family planning; but apart from China and countries in Africa, the subcontinent is probably the world's last underexploited market. In addition, the longitudes also work to the advantage of the sub-continent in providing the facility for a 24/7 work-cycle to industries in the far-east, and in America. Longitudes apart [pun intended!] the rupee is sufficiently weak for an indian workforce to be viable economically, even at the cost of training them.

Indians, outside the subcontinent, have by-and-large done well; contributed to their adoptive country, and gone on to positions of responsibility. But I admit to prejudice on this point. Anyway, the thing is that companies from the sub-continent have an advantage in being able to bid _very_ competitively for projects from firms located outside the subcontinent. Unflattering as it may seem, even a child can learn to throw instructions together and write a program. To write compact, maintainable code, something for an evolving _product_, one needs knowledge of algorithms, design strategies, and knowledge of technologies. Some of these may be learnt from books, the others must be learnt by hard experience.

Similar to the case of an individual, a firm too must earn to survive. In the latter case, the earning is termed 'profit'. A product, until it is established in the markets, remains a red-line on the profit-charts. Few software firms in India cater to a product for the local businesses, and professionals. Businesses in India are, for the most part, still in the small business stage. These are usually owned by a family for generations at a time. This is not to say there are no manufacturer owned outlets; there are, but such outlets are heavily outnumbered by the smaller businesses which cater across brands, and across price segments. Similarly there are small supermarkets, mostly managed by various consumer cooperatives, and some small chains. Business, by and large, is computation intensive but small stores here rarely own a computer, let alone use a computer for inventories/billing. Both are managed on paper, if at all.

Lately, small businesses are beginning to make the switch to a computer but there is an established mindset which must change, before the potential of the market can be realized. A few arguments I believe that need to be factored in by firms aiming to tap this market are -

First, there are few, if any, retail chains; as a result one big selling point in favour of computers - networking/communication - does not carry quite the weight it should.

Second [as a consequence of independent retail stores], the owner of the store down the street _will_ think atleast twice before putting his data into a server he himself does not control; no matter that the advantages of a remote server - daily backups, encrypted data storage [(+; the freedom to sue, if there's a problem ]

Third, Computers require a power-supply. As much as a third of the electricity generated by the Electricity companies in India is lost in the accounting [to what are euphemistically termed as Transmission & Distribution Losses]. There are places [my city of Nagpur with population > 4M] where the power companies shutdown distribution [it's called load-shedding] for as long as 4-hours during the working day. I've heard of places in the interior who experience power-outages upto 8 hours a day. This has improved in recent days, but the point is this - power supply can be ... capricious. The spiraling cost of fuel all but precludes purchase of a Generator. From the point of view of the store-owner - "Invest in a computer, Invest in the software for the computer, invest in a generator, purchase fuel time-and-again, and _then_ pay the auditor? I think not".