Global Market Outlook on Product Engineering Services

  • Software product engineering includes various phases, starting from planning, developing, testing, deployment, to support and maintenance of the software based on the requirements of the customer/client 
  • It is also referred to as ‘Software Product Development Services’ , ’Application Development and Maintenance Services’ or ‘Product Engineering’ by the clients
  • The market for product engineering services  is expected to grow between  9.8 – 10 percent (CAGR) from 2017 to 2021, from $737 billion in 2017 to  $1078 billion in 2021  


  • The major trends which drive the growth of software product engineering is:  – Reducing the time taken for development helps the vendor to achieve  quicker delivery cycles of the product. This accelerates the ‘time -to- market’ criteria of the product among the vendors – Industries have started adopting IoT to reduce costs, and this is achieved  by manufacturing various devices, thereby providing better customer  experience  
  • Major end-users for software product engineering services are:  Automobiles, Independent Software Vendors, Healthcare, Telecom,  Educational  Institutions, BFSI, Aerospace and Others Industries 
  • Software product engineering service is more concentrated in the US as  they spend more in R&D, followed by India, China and few countries like  Russia, Ukraine, Romania (Central and Eastern Europe)

Supplier Evaluation Criteria

  • Software product engineering or software product development services is a highly competitive and fragmented market 
  • Though there are many small and medium players, big players TCS, Cognizant play a dominant role due to their technical capabilities 
  • The service providers are evaluated based on their technological capability, employee availability with desired skills

Cost Break-up

  • The below chart represents the approximated cost break-up for developing a software product as a whole 
  • When going for complete cloud, one would need to get a person who communicates between the cloud and the team 
  • The cloud/hybrid reduces the storage cost of the hardware from an infrastructure-cost related standpoint 
  • The current trend is more towards moving applications and data to the cloud based deployment model as it can scale up/down according to the system’s needs. This will reduce the overall cost of the system as no upfront costs for server acquisitions are needed