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This article focuses on the computer software strategies adopted in developing countries. It has been a big business in developing countries. Many of these countries have cheap, talented labor that finds an easy route into a business that is labor-intensive, has relatively low entry barriers, and has few economies of scale. But this is also a multifaceted business. Extrapolation from the patchwork of incomplete and sometimes uncertain figures suggests these countries exported some $3 billion of software in 1998-99. The export image projected is one of virtual development, in which clients sitting in the West interact with software professionals developing packages overseas. The high profile of India's success makes many developing countries wish to follow in its footsteps. Those who do, however, find difficulties. Inter-developing countries markets are also growing. Africa, Asia, and the Middle East are the target for about 5% of India's software exports, while Korea and Malaysia are outsourcing to countries like the Philippines, China, and Vietnam. The vast majority of developing countries software firms sit in the position-D market segment, largely because it is by far the easiest for them to enter.

India has fast emerged as a leader in the information technology (IT) field. This is due primarily because the people of India were quick to realize and act on the potential of IT industries to generate wealth, foreign exchange and employment. Today, the IT industry is a primary factor in India's national agenda as an instrument to modernize India's economy. There is a natural but gradual shift toward IT usage in government and in education. The first time the computer significantly affected the general public in India was in 1986 with the computerization of the nation's railway passenger reservation system. In recent years, however, the power of the Internet and e-commerce has brought IT into the everyday life of India's general public. Indian software exports grew 57% in 1999-2000 and 51% in dollar terms over 1998-1999, while the domestic market grew 45%. Growth in e-commerce solutions rose about 200%; the CAD/CAM market grew 41% and banking software and enterprise resource planning increased 70% and 23% respectively.