Emergence of Software Policy

The first Computer Policy of 1984 and Software Policy of 1986 emphasized the concept of software development and export through data communication links. This policy's objective was to develop software in India using Indian expertise on sophisticated computers, which were being imported duty free. This way, one could make use of the low cost expertise available in India and avoid the expense of time and cost in traveling abroad.

However, there was a substantial cost involved in the data communication links. As per the policy, companies were allowed to establish data communication links by their own initial investments. The ownership of the equipment and the operations of the same Gateway would remain with VSNL and VSNL would pay back to the user over a prescribed period after deducting the operational maintenance costs.

This used to be as high as Rs.45.00 lakhs per 64 Kbps for an Indian half circuit per year.

Texas Instruments has the credit of being the first software company with an Offshore Development Facility in Bengaluru. Texas Instruments was also the first to establish its own Gateway at Bengaluru with the support of VSNL on a 'build & operate' agreement.

Except Texas Instruments, no other company succeeded in establishing a similar facility. It was very expensive for smaller companies and other offshore development users to afford the high cost of the data communication.

Further, an Officer from the Dept. of Electronics, Govt. of India was posted at Texas Instruments to monitor the data using the protocol analyzer before issuing necessary certification. There were many hardships that Texas Instruments had to encounter and circumvent by liaisoning with DoT, Ministry of Commerce and the Dept of Electronics, to make sure that the concept of offshore development could be made a success.

In fact, when the Govt. announced the first Software Policy in 1986, many such issues were addressed.