In Software industry there are 2 kinds of strategic groups: "Software Product" and "Software Services". Each has its own business model, way of doing business, organisation capabilities, values, operational skills...although both incorporate lot of software development. Big 5 Indian software companies business model is software services. If you talk about Microsoft/SAP/Adobe etc. they are in in software product.
Transition from one group to other is not that easy. As I mentioned its comletey different way of doing things (both at strategic level as well as operational level). As a matter of fact >85% of services companies failed when they tried to be Product company. Product company ultimately turns to be Services company as the company matures and their product matket saturates (unless they have continuous stream of new Product launch like Microsoft).
Being a product company you have to be very very good at sales & marketing, close to customers, partner channel and that's why most product companies are form west.
Being a services company is not bad or being a product company is not good, inherently. afterall 70% of customers money over the entire lifecycle of software usage goes towards servising it, rest 30% goes towards product price only. Another pros and con is: services is low margin business and product is high margin (in software as high as 99% gross margin). after all its a matter of choice, which industry you choose to compete in, what skills are better s
