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6 trends that demonstrate that the Indian ER&D industry has become increasingly software centric

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6 trends that demonstrate that the Indian ER&D industry has become increasingly software centric
Mon, 07/12/2021 – 18:46

Since the last year, the Covid pandemic has accelerated digitalization across the entire ER&D industry. With lockdowns and work from home being facilitated, newer modes of working have been adopted and digitalization has become all pervasive in the industry. According to the interviews conducted by NASSCOM with various leaders and CXOs of the Indian ER&D sector, companies went fully digital between 2-8 weeks, when they transitioned to a work from home mode.

However, even before the pandemic, the ER&D sector was increasingly becoming dependent on technology. But the pandemic quickened this process, and the firms underwent rapid digital transformation and has witnessed an exponential increase in cloud investments.  

We can identify 6 clear trends which demonstrate that the Indian ER&D sector is increasingly becoming digital and software-centric.




  1. Shrinking product cycles – Product timelines shrunk for customers when digitalization got accelerated due to the pandemic in the sector. It shrunk from years to months and Indian ER&D firms were able to deliver on the projects during this shift to the virtual world. This trend is expected to continue for the medium and to long term where customers will look for ROI over a shorter time period (2-6 months) versus 12+ months.


  1. Cloud Engineering – Cloud Engineering is touted as the next big growth opportunity in the ER&D space. With increasing digitalization, higher use of AI, IoT, ML, NLP, edge computing, AR/VR etc., the need for cloud increases with the storage and the processing capacity it provides. Hence, manufacturing companies, especially, are increasingly adopting cloud technologies into their day-to-day activities. In the near future, integrated ER&D firms are expected leverage cloud business and other pure-play ER&D firms are expected to offer cloud-based ER&D services.
  • Companies such as Daimler have teamed up with Infosys to focus on software engineering to offer agile, open, scalable, smart hybrid cloud infrastructure. Other such as HCL have moved their CAD/PLM applications onto the cloud platforms.


  1. Shit to “Product as a Service” – Through the shift to the cloud platforms, companies are now leveraging data and analytics to drive new businesses and revenue streams and hence there has been a shift from one-time product sales approach to a recurring Product-as-a Service model.
  • Companies such as TCS have successfully adopted a flexible consumption-as-a-service subscription model, enabling roll-out of its ExtremeCloud™ IQ cloud management platform, thereby strengthening its customer relationships & gain market share.


  1. Digital Engineering – Increasing use of AI/ ML, IoT, NLP etc. has increasingly shifted the sector from a conventional (electrical/ mechanical) industry to a digital one. Digital Engineering is expected to grow to have 40% share in global ER&D spend by 2023. Accordingly, the workforce also needs to upskill and re-skill themselves to take advantage of the increasing opportunities that come their way.
  • Companies like AKKA have reallocated its portfolio and resources toward digital (connected car, EV, AV). It is also accelerating digital training for its workforce and expects to re-skill 3,000 engineers by 2022 end.


  1. Increasingly software centric – Telecom sector has gone software centric with prevalence of smart cities, smart grids, smart factories, etc. 5G networks are expected to deliver seamless bandwidth experience as the internet traffic grows exponentially.


  1. Virtual Engineering – The pandemic and its resultant digitalization is expected to encourage companies to build end-to-end digital data continuity across the entire product life cycle, given the fact that companies are increasingly reducing the time to market and are keen on developing digital twins and digital threads.
  • ​​​​​​​​​​​​​​Companies like Cognizant have implemented digital thread technology-based information framework for Lexmark, providing predictive analytics and enhanced visibility into quality control of its products.


Digital technology is indeed changing the world and a lot faster than previously envisaged. Companies who are adopting the tech are climbing to the top of the pyramid. This adoption requires a well-coordinated approach across all levels of the company. Those who haven’t embraced the digital way risk being losing the game altogether in this new normal.


To read more about the trends that have defined the Technology sector in 2020 and the upcoming trends for 2021, click the following link to download – 

Technology Sector In India 2021- New World: The Future Is Virtual/Strategic Review. It is the Annual industry fact book that covers in detail the trends that shaped the year 2020, the segment-wise performance of the industry and the outlook for 2021. The underlying theme for 2020 is the pandemic-led global reset, the digital transformation imperative and the changing value proposition for India.

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