Software Firm? Product-based or Service-based

So, without further due, lets get started.

What it is?

A software firm creates or innovates new ideas, products and develop solutions. But the way they generate revenue makes them apart from the other type of institutes or organizations.

A company that has their own developed (in-house built) software through which they earn is a product-based company. Customer often buy or rent their product in exchange of subscripts, licensing or selling. Some firms also do

joint venture software development with other company to maximize profit and minimize production cost. For example, Google is a product based company, they have their own product like Gmail, Google Drive which customer can rent.

Companies like IBM had partnered with Microsoft in the past and developed OS/2, that is an example of a joint venture product.

On the other hand, a company that builds software for other organization or lend resources to other business entity for software development, infrastructure setup and maintenance is called a service-based company. They are also called consultancy firm. They don't have their own product or software.

What a product-based company offers?

1. Higher salary and perks because they are not dependent on a single client. They have their own-product and customer base so they are not concerned about revenue but product.

2. They do selective hiring from top universities or recruit talented engineers, they are not concerned about the expenditure.

3. They give you development work and ample learning opportunity.

4. Its easy for you to switch to a different project.

5. Career growth rate is high.

6. Increment is high since they are concerned about employee well being.

7. Multiple interview rounds which are tough to crack.

8. Once hired, employee has freedom to choose the work domain.

9. High job security.

10. High learning curve, often the employee gets training opportunity or sponsored certification required for the specific task.

11. Employee has to work on their own office.

12. If the company is a startup, then you may face some work rush. Other than that, product-based companies are very flexible in case of timing. They only care about meeting deadline.

13. They have larger investment and low risk of failure.

14. Employees are more concerned about personal growth.

15. Employees often gets chance to work with latest technologies.

16. Coders are given more freedom.

17. Employee is product focused.

18. Put emphasis on R&D more.

What about Service-based company?

1. Low salary and benefits. Since they are dependent on other organization, they try to hire employees as cheap s possible.

2. They do mass recruitment and hire below average or average engineers.

3. They give you mostly support related work or issue/bug fix related things.

4. Almost impossible to switch to a different project. If you request to do so, you may get fired.

5. Career growth rate is very slow.

6. Increment is low since they target only profit maximization.

7. Fewer interview rounds which are relatively easy to crack.

8. Almost no room for the employee to choose his work domain.

9. Low job security. Often people are fired after the project is completed or when client is gone to any other company.

10. Low learning curve, almost little to no support from organization.

11. Sometimes employee has to work on the client site.

12. Time is inflexible, most of the time has to work late or long hours

13. They have small investment and high risk of failure.

14. Employees often struggle with keeping the job.

15. Employees sometimes has to work with legacy codebase.

16. Micromanagement is an issue here.

17. Employee is client focused.

18. Put emphasis on client needs and deliverables more.