Product-based vs Service-based Companies – Understanding the Core Difference!

Product-based vs Service-based Companies

IT industry is a huge industry in itself with thousands of organizations building products and providing services across the globe. In the past 20 years, IT has changed the employment history of India.

From the agriculture-based economy, India is gradually moving towards Information Technology and making its mark around the world. IT industry is perceived as one of the most pampered and sophisticated sectors people love to be a part of, especially developers.

But, do you know there are 2 different worlds that exist within the IT industry?

Product vs Services Based Companies

There are two types of organizations the IT industry is divided into – “Product based IT company and Services based IT company.” Both these verticals have their own importance and they are similar in a few aspects but are different in many aspects. Let’s delve into the core concept that defines these two organization types.

Product-based IT Company –

This type of organization is driven by an idea to help different customers. Here the main focus would be on “what should I do to make my product better”. They are continuously working on building a software product using various technologies. Some of the known examples are – Microsoft, Paytm, Cisco, Adobe, NovelVox, etc.

These companies have their own products and when used by other customers they are customized as per the client’s needs. The products could be for the B2B or B2C market which purely depends on the usage of the product.

Services based IT Company –

On the other hand, a service-based IT company is driven by customer needs. They offer services and solutions as per customer requirements.

Such organizations do not have any products of their own but help other organizations/individuals to build products or provide services to run their IT needs. Some of the known examples are Infosys, Wipro, TCS, cognizant, etc.

You must be wondering how does it matter for a developer whether it’s a Product or Services Company as he/she has to ultimately code. Here is the catch:-)

Though the developers of both types of organizations are ultimately coding, there is a huge and visible difference in the working style of these organizations, their culture, their approach, etc.

Here are some of the major differences between both types of organizations

Product-based IT Company Services-based IT Company
Innovation: Here you will get challenges that will take you towards innovation. Every time something better is expected so if you are keen to learn, you will get good problems to solve. There is always a scope of doing something better to enhance the product line as per competition. Monotonous: Here, you would be given a fixed set of work with a fixed deadline. No one is going to ask for anything extra if you are done with your task. There will be no challenges as the work is planned and allocated as per client requirements. Many times, you keep doing the same work as that’s the need of the business as a service to be given to the client.
Joy of accomplishment: If you are coming up with a new idea and working towards it, you get satisfaction and a sense of accomplishment. Just completing tasks: Since the requirement is coming from the client, once a task is allocated, you are just completing the task.
R&D at its highest peak: Over here, everyone is expected to keep doing R&D as any new idea is always welcomed. It may change the whole business line. So, people are encouraged to speak up and share their ideas. Less scope of R&D: Since the requirements are frozen at the start of the work, there is less scope of R&D for all. A specific team takes care of that area and not everyone gets the chance to research.
Code Quality Check: Since you are building a product, its quality is at the highest priority. A lot of importance is given to your code quality and efficiency. Code Quality Check not a priority: As your company is not creating anything for themselves apart from good relations with the client, they will not bother you until the client bothers them. So, you may not worry about code quality.
Growing Tech Stack: Here, the chance of working on new technology is very high as the world is changing every single day and you need to keep upgrading your product accordingly. Limited Tech Stack: Here, people may end up using the same technology for years as there are different teams for different technologies, so the scope of growing the tech stack is very low.
Healthy Competition: As such a place is filled with great talent, you always get a strive to be better. There is always a healthy competition to learn more and provide better solutions. Multitasking is appreciated the most. Political Environment: As they have many people to do the same task, people tend to get in politics. Technical competency doesn’t play a huge role, thus usually office politics, backstabbing, flattery take the front seat during appraisals and reviews. As a consequence, you see a lot of arrogance from people and a lot of chaos in project executions.
Business understanding: In a product company, you need to understand the whole business idea to come up with more ideas so the freedom to expand your business acumen is high. Domain understanding: Since most of the services companies specialize in a particular domain only, so there is less scope of understanding the whole business. You may gain expertise in a particular domain like health care, telecom, etc.
Higher salary benchmark: The focus is more on talent and thus good paymasters. There is no client billing here so they cautiously choose better talent and give them better salaries so that they stay for long with them. Lower salary benchmark: The focus is on billing, so more billing, more people are allocated to a project, so they may compromise on talent and pay a particular range only.


Hopefully, now you get a fair idea about both types of companies and if you are really passionate about coding then a Product Company like NovelVox Softwares could be one of the right choices for you.

We at NovelVox always welcome talented people who exhibit a high level of the following competencies:

  • Analytical and Logical thinking
  • Passion to innovate something
  • Believes in transparency
  • Positive attitude to accept and bring changes as the world is changing every second.
  • Believes in teamwork
  • Always eager to share knowledge with others
  • Last but not least, believes in taking ownership

If you are the one with all such competencies then what are you waiting for? Reach us and join the force to build a world-class product that would outshine in the Contact Center Industry.

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