Product Based Vs Service Based Companies

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All the Job Seekers in the tech industry are always curious to know the difference between Product Based and Service-Based Companies.

I have made some pointers which represent the difference in these do segments of industries
  • What are service-based and product-based companies
  • Work and Exposure
  • Technologies
  • Culture
  • On Client Exposure
  • Salaries
  • Annual Increments
  • Growth with respect to position Vs Growth in terms of money
If you are not a good reader have a look at this video on the same topic:

Service-Based Companies

Service-based firms are the organizations that take projects from the external entities and work towards delivering the projects. These companies are generally large companies and are mass recruiters in multiple domains. They prefer people who have a wide array of tech stack in there profiles.
Examples of such companies in India are;
  • TCS
  • NIIT
  • Infosys
  • Genpact

Product Based Companies

Product-based firms are the organizations that have their own line of products and work towards building, improving, and maintaining these products. These companies have a limited number of vacancies and generally prefer people who have in-depth knowledge of the tech stack that they work on and are willing to work on a new stack if the need arises. Some Product-Based companies are:
  • Facebook
  • Google
  • Microsoft
  • Flipkart
  • Amazon

Work and Experience

The type of work that you do ina firm completely depends on the firm you are working at and the post that you hired for. But there are some differences which we will discuss:

In service-based firms, you will be working on multiple projects throughout your time in the organization with every project spanning from 4months to 1 year in the development phase and ongoing maintenance.
Now, the work you will get, depends on, if you have joined the team when the project is in the development phase or in the maintenance phase.
In the maintenance phase, the work usually involves writing some database scripts, some modifications and resolving bugs if found in the project.
The development phase can be pretty exciting for the coder.

On the other hand, in a product-based firm, there is ongoing development going on in the product and teams are working on maintaining the product, adding new features, improving user experience, and creating a new line of products. Most teams will be working on the same tech stack and there will be very little deviation in the stack.

Technologies

As explained previously in many points, in service-based firms you will work on multiple projects and there are good chances that every project is on the different stack as per the requirements.
So, this means that you might get a chance to work on multiple technologies but you might become the master in any stack.

On the other hand, the product-based firm has a defined stack and chances are that you will be learning a stack in-depth and become some in that stack.

Culture

Disclaimer: Culture of an organization widely depends on the company, but I would like to highlight some key points;
  • Timings
    Service-based firms generally have a fixed time that you have to spend in the office which is around 8-9 hours and on the other hand, product-based firms are flexible with the timings, your time in office can vary from 4 hours to 13 hour
  • Dress Code
    Service-based firms generally have a dress code which has to be strictly followed by everyone and on the other hand, product-based firms don't have any dress code, you can go in whichever way you are comfortable.

On Client Exposure

The service-based companies tend to provide you more exposure to the clients as you are more closely working with clients. There can be cases where you are working in client offices.
On the other hand,  in product-based companies, you don't get that much exposure to interact with clients and there are specialized sales and marketing teams that take care of clients.

Salaries

Service-based companies are generally mass recruiters and tend to pay less money as salaries to the employees. The salary for freshers starts from around 3-4 LPA.
On the other hand, product-based companies can pay you hefty amounts along with stock options(Want to know about stock options, do leave a comment). The salary for freshers starts from around 6LPA in small companies and 12-15 in some big companies like Amazon, Google, and Flipkart.

Annual Increments and Growth

Annual Increments in a service-based firm are generally restricted to a single-digit number and some are lucky(1%) to get increments in two-digits.
On the other hand, product-based companies offer you an average hike of 10-15% which might go up to 25-30%.
In terms of growth, a service-based firm can offer you a good growth in terms of positions, you can become a Manager really soon as compared to product-based firm but the product-based firm can help you grow financially with good increments every year and carve you as a tech guy.



This is purely my opinion of the industry as per my experience of 5 Years, which I think describes the general trend.
If you still have any question do let me know in comments.
Also, have a look at other Industry Insights

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