Difference between Product and Service based Company

Difference between Product and Service based Company

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.

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What is “Product Based Companies”:

Product based company is a company which makes products which might be/ might not be related to software, but they need the IT department to make that product more sellable. In Simple word Product based companies are those that create some products like Oracle, Adobe, Samsung etc are product based companies.

Below is some question which might arouse when we talk in detail about 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.

Also Read: Interview Process for Freshers Hiring 

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

– Since you will be 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 is actually best for your carrier growth. They maintain a clear boundary between development and support work so a candidate can be dedicated to the particular work and their learning will be awesome.




  • How is salary perk in “Product based companies”

    – Definitely, it’s far better compared to Service based companies. When we talk about appraisal then these companies are very much transparent which means its purely depends on your performance.

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

    The interaction and coordination between the team members are more because there will be fewer people in the team. And due to fewer resources, there will also be fewer chances of politics and favoritism. But yes the work pressure is quite good here.

What is “Service Based Companies”:

Service-based is a company which 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 not much hectic, it mainly consists of 3-4 rounds. They hire people for certain specific project which means if anyone has a good knowledge of particular technology they can be hired. The selection and rejection are very uncertain here so you won’t be able to figure out why you are rejected. But yes to if you are fresher then service based company can be boon for you because some of the companies believe in providing good training to the candidate and then they will assign you with the project based on your performance during the training period.

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

    The learning graph is not much promising here because at times there’s no learning in the projects given because the projects are simply supported or maintenance projects. Plus they do not have a different support team, the ones who are hired as developers themselves do the task of support.

  • How is salary perk in “Service based companies”

    – It quite average. Appraisal and performance bonuses are quite rare. But yes the top performers are always offered with good ratings and appraisal. So you need to give your best in order to get a good appraisal in a service based company.

  • 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. But yes at the end it all depends on the project you are ended up in. Service-based companies also hold some good projects where you have a good opportunity for learning as well as growth.

Stay tuned for more such blogs!!

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