Difference between Product and Service based Company

Difference between Product and Service based Company


If you are looking for a job, it is important to know the different types of companies out there. Product and service based companies are two of the most common types. Each one has its own strengths and weaknesses, so it is important to understand the difference before you start your job search. A product based company focuses on selling products to customers, while a service based company provides services to customers. Which type of company is right for you? Keep reading to find out!

The software industry has grown rapidly in the 21st Century. With the innovation and development happening every day, the curiosity of the new generation towards this sector is also increasing.  There are mainly two types of companies running in India.

  • Product Based Companies
  • Service-Based Companies

Now the question is what is the difference between Product Based Companies and Service-Based Companies. Let’s discuss them separately.

What is “Product Based Companies”?

A product-based company is a company that makes products that might or might not be related to software. However, they do need the IT department to make that product more sellable. In Simple words, Product based companies are those that create some products like Oracle, Adobe, Samsung, etc. are product-based companies.

Below are some points that come to our mind when we discuss in detail these product-based and Service-based companies.

  • What is the interview process of “Product Based companies”?

    Here the number of rounds of the interview can be more than the service-based company. The key area they focus on is data structure and algorithm analysis. They basically need a candidate with good exposure to these domains because they expect them to be able to do the specific task with minimal training provided.

  • How the learning graph increases in “Product based companies”?

    Since you will be a part of the product development team, the learning curve will be far better than the service-based company. They generally use an optimized way of coding, so the learning graph increases linearly which gives you a vast exposure in a short span. They maintain a clear boundary between development and support work, so a candidate can be dedicated to the assignment and their learning will be awesome.

  • How is salary perk in “Product based companies”?

    It’s better compared to Service-based companies. As you are paid for the effort you put into the work. When we talk about appraisal then these companies are very much transparent which means it purely depends on your performance. Here there is a high probability of getting a double-digit hike during the appraisal cycle.

  • How is the work culture in “Product based companies”?

    The interaction and coordination between the team members are more because of the limited numbers of employees. And the company with fewer no. employees experience minimal politics and favouritism issues. But yes, the work is quite noticeable and challenging here.

What is “Service-Based Companies”?

Service-based is a company that provides software products and services to anyone who asks for it for a price.

Refer below for some elaborated discussion points.

Also read this Source Article showing List of Indian IT Companies from Wikipedia.

  • What is the interview process of “Service-based companies”?

    The interview rounds are comparatively lesser which consists of 3-4 rounds (2 technical,1 behavioural/Managerial and last HR round). They hire people for a certain specific project. If you have any specialisation or prior work experience in that domain, your chances to get selected would be more. The selection and rejection are very uncertain here, so you won’t be able to figure out why you are rejected. But yes, if you are a fresher then a service-based company can be a boon for you because some of the companies believe in providing good training to the candidate. Usually, you will be tagged to the project based on your performance at the end of the training. The people with good outcomes in training exams could get a chance to work in development or testing assignments. Indian tech giants like Infosys, TCS, Cognizant spends a substantial amount of money on training. So, if you want to learn and work then service-based companies seem to be an ideal location for you.

  • How the learning graph increases in “Service-based companies”?

    The learning graph is not much promising here because majority of the projects are support or maintenance projects. But If you are the kind of person whose area of interest lies in doing out of the box stuff then definitely you will stand out in the team. If we talk about onsite opportunities, then the service companies beat the product companies. They have ample options in which the client wants the star performer of the team to come to their place and work directly.

  • How is salary perk in “Service-based companies”?

    It quite average. Appraisal and performance bonuses are quite rare. On contrary to this the top performers are always offered with good ratings and appraisal. You need to be the best of your team. And this is something that is common for both service and product companies. Hard work is payed-off in both places.

  • How is the work culture in “Service-based companies”?

    The work culture is good for a person who believes in working across the cycle. You will be appreciated based on the team and not an individual’s hard work. There’s a lot of pressure even though the work given here is just support and maintenance. In the end, it all depends on the project you are ended up in. Service-based companies also hold good development projects where you have a good opportunity for learning as well as growth.

Note:  There are many service companies who have launched their products in the market and if you find yourself technically sound then you might get a chance to work on that. Similar to this the product companies also hires people to support their existing developed products where new development will be less to minimal. So always be prudent in your decision of choosing your career.

Stay tuned for more such blogs!!

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