There are two types of companies, Service-based companies, and product-based companies. Everyone who is planning to make a career in the tech industry or already working with a tech company.
They must have come across this question which is a better service-based company or a product-based company, and which company I should join as a fresher or which IT company is best for career growth.
Today I have come up with all the doubts you have about service-based companies and product-based companies.
Please read complete articles to understand the advantage & disadvantages of a service-based and product-based company, also will include the basic difference between these two types of companies.
Difference between the service-based company and product-based company.
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| Service-based company vs Product based company. Know the difference between service-based and product-based companies, which is better & why? |
The service-based company provides services to other organizations or clients. Many companies do not have IT or tech setup to develop their products for their customer, hence they outsourced this work to IT companies like TCS, Wipro, HCL, Infosys, etc.
These all companies are service-based companies that work for their client's projects. Service-based company does mass recruitment, as they have many projects to handle and have to hand them over within a timeline to their clients.
But Product based companies work and develop their own products and sell to their own consumers, like Amazon, Facebook, Google, Microsoft, etc. The product-based company hires developers or IT engineers less compare to service-based companies.
Advantages and disadvantages of the service-based company.
Advantages of the service-based company:
Service-based companies do mass hiring, hence they hire fresher also through campus selection and direct hiring. If you are fresher and looking for jobs, chances are big to get hired by service-based companies.
You will get better growth in terms of your job role or designation in a service-based company. These companies have numerous projects in multiple domains, like Banking, Ecommerce, Retail, Manufacturing, etc. You get good experience in the top demanded domains during your employment with service-based companies.
Most service-based companies hire fresher for entry-level jobs and provide good training to all their new employees. You get a better opportunity to develop any projects from the scratch. It will help you to understand the end-to-end process in the IT industry.
Disadvantages of the service-based company:
TCS, Infosys, HCL, Wipro, Tech Mahindra, etc hire employees on large scale, hence they offer less salary from 3 lacs to 5 lacs range for entry-level jobs.
The attrition ratio is high due to less salaries and less hike in annual appraisal. Most of the job opening is for support role only, but if you are getting a chance to join in development team then you are the lucky one.
It is very rare that you get a good job role in a service-based company, most job opportunities are for support roles only. This company has very strict employee working hours and zero tolerance for shift non-adherence. The service-based company works in a 24/7 environment culture, So you have to be flexible for rotation shifts and weeks off.
Advantages and disadvantages of the product-based company.
Advantages of Product based company:
The product-based company offers a very good salary package with attractive incentives. Product-based companies like Amazon, Microsoft, Apple, Google, and Facebook have very open and convenient work environments for their employees.
They allowed casual dress also at work, but service-based companies allow formal dress on weekdays. Most Indian Product based company follow the day shift between 8 to 7 PM only, so you do not have any night shift to work in the product-based company.
If you are working with the ith product-based company, you become a master in your domain, as you work on one particular product again. It's just like, work analyzing and then improving processes on the same product during your employment in a product-based company.
Attrition rates are also very less compare to service-based companies, as employee satisfaction is high in product-based companies.
Disadvantages of Product based company:
The major disadvantage is that most product-based company does not hire fresher or do not do any mass hiring. They are very choosy in hiring candidates. Interview processes are also very tough and long compare to service-based companies.
Growth chances are very less in product-based companies in terms of job roles and designation. People working in product-based companies are in the same position even after 3 to 5 years in a product-based company.
You can easily switch to a product-based company from a service-based company after gaining good experience in skills. But you rarely join any service-based company after long working with the product-based company due to the high salary. As most service-based companies offer very fewer salaries compared to product-based companies.
FAQ:
Q1. Why product based companies are good?
Ans- Because product-based companies offer very attractive salaries with good incentives, also employee satisfaction is high in product-based companies.
Q2. What are product-based companies in India?
Ans- Google, Microsoft, Facebook, Amazon, Mindtree, etc are the top giant product-based companies in India.
Q3. What are the service-based company in India?
Ans- The top companies like TCS. HCL, Wipro, Infosys, Delloite, Tech Mahindra, etc are service-based companies in India.
Q4. Which is the best company for fresher, Service based or product-based company?
Ans- Product based company is always a better choice, but if you get the chance to join a service-based company as a fresher, don't miss it to grab. Once you get good experience then later you can switch to product-based companies.