If you are a software engineer or a wanna be developer, you have definitely asked yourself:
“Should I join a product based company or a service based company?”
This is one of the most important decisions in your professional life. Although product-based firms are usually linked with higher pay and difficult engineering roles, service firms offer good learning experience, exposure to different industries, and solid foundations for building a great career.
Neither is always better than the other, and the decision lies purely on what your career objectives are.
In this blog, we will look at product based companies vs service based companies with regards to salary, learning, career development, work culture, and interview preparation.
Quick Answer
In a product-based company, you will create and sell your own software or digital products. Engineers will be focused on making your products better and scaling them.
In a service-based company, you'll create software or provide IT services to clients. Engineers generally work on different projects from various clients.
To summarize:
If you like solving engineering problems and creating products that are used by millions of people, choose a product-based company.
If you'd like to have experience with many projects and learn about different technologies, choose a service-based company.
Don’t pick the company just because of the salary. Pick the company which can help you grow into the engineer you want to be in the coming five years.
What is a Product Based Company?
It is a company that designs, owns, and consistently develops their own software products. The company makes money through customers buying or subscribing to these products.
Examples
- Microsoft
- Amazon
- Adobe
- Atlassian
- Salesforce
Characteristics
- Product ownership
- Innovation
- Long-term product development
- Engineering culture
- Very high scalability and performance
What is a Service Based Company?
This kind of firm creates software, application or technologies that are not for personal use but for other clients outside their firm.
In this kind of firm, income is earned not by selling products but by providing IT services or consultations.
Examples
- TCS
- Infosys
- Wipro
- Accenture
- Capgemini
- Cognizant
Characteristics
- Multiple clients
- Different domains
- Different technology stack
- Faster project transitions
- Good communication with clients
Product Based Companies vs Service Based Companies
| Feature | Product Based Company | Service Based Company |
|---|---|---|
| Business Model | Builds its own products | Builds solutions for clients |
| Salary | Generally higher | Moderate to decent |
| Learning | Deep technical knowledge | Large exposure to all technologies |
| Projects | Long-term product ownership | Variety of client projects |
| Work Culture | Technology oriented | Client delivery oriented |
| Interview Difficulty | Higher | Moderate |
| Career Growth | Skilled engineers grow quickly | Systematic growth path |
Comparison of Salaries
Salary is a very important reason why professionals strive for product companies.
According to AmbitionBox, Software engineers in product companies in India get paid between ₹15 LPA to ₹45 LPA, depending on the company, role, location, and skills of the professional who usually has 2-7 years of experience.
On the other hand, salary in service-based companies may be lower at first but will gradually increase along with your experience and promotions. Salaries vary a lot from one company to another based on your personal performance.
Importantly, salary shouldn't be the only decisive factor. Sometimes learning, mentoring, work quality, and your career development may have more significant effects on your salary.
Which is More Effective for Learning?
Product Based Companies
You will focus on
- Large-scale systems distributed
- Optimization of performance
- System Design
- Quality code
- Scalability
- Software design
You get to spend many years perfecting the same product and learn deeply about technical stuff.
Service Based Companies
You will learn about
- New technologies
- Different business areas
- Communication with client
- Agile methodology
- Complete life cycle of projects
This exposure is great, particularly during the beginning of your career.
Did you know?
Many professionals working at companies like Amazon, Microsoft, Adobe, and Salesforce had worked at a service-based company previously before moving to these places.
Which is Better for Career Development?
There isn’t one that is universally better.
Product Based Companies are better when you wish to
- Develop into an excellent software developer
- Create scalable software systems
- Solve complex coding problems
- Develop software used worldwide
- Develop into positions such as Staff Engineers and Architects
Service Based Companies are better when you wish to
- Get practical industry experience
- Explore various kinds of technology
- Develop client communication abilities
- Learn how to deliver projects
- Develop business domain knowledge
Popular Myths
Myth #1
Good engineers are only in product companies.
Reality:
Good engineers exist in both product and service companies.
Myth #2
You cannot move from service to product.
Reality:
Thousands of Thousands of software engineers make this transition every year with the right preparation.engineers move from one category to another each year.
Myth #3
Higher salary means a more successful career.
Reality:
Continuous learning and strong technical skills usually create better long-term career opportunities than a higher starting package.
Is It Possible to Make a Switch from Service Based to Product Based?
Definitely.
This is possible for many working professionals who have improved their technical fundamentals.
It's essential to study the following subjects:
- Data Structures and Algorithms
- System Design
- DBMS
- Operating Systems
- Computer Networks
- SQL
- Problem-Solving Skills
- Mock Interviews
Consistency should be a priority rather than trying to learn everything at once.
For working professionals who are preparing to switch while working 9-5, it becomes easier with the help of a roadmap and mentorship. Programs from Bosscoder Academy are designed to help working professionals strengthen DSA, System Design, and interview skills through guided learning, mock interviews, and 1:1 mentorship from experienced engineers.
How to Prepare for Product Based Companies
The first step towards preparing for product based companies should be creating a solid technical base.
Recommended steps
- Master Data Structures & Algorithms
- Learn Core Computer Science subjects (Operating Systems, Databases, Computer Networks)
- Practice System Design
- Working on real-world projects
- Solving coding questions
- Mock Interview Prep
- Resume & LinkedIn Profile Optimization
Consistency over time gives better outcomes than intense but irregular preparation.
Conclusion
In any case, Product Based Companies vs Service Based Companies is not a discussion about one company winning.
While product companies can be associated with higher pay, challenging engineering problems, and building things on a large scale.
Service companies can be associated with varied projects, industrial experience, and a good foundation for a successful future.
The company you work for is important but what you learn in the process is even more important.
If you are a fresher beginning your career or a working professional planning your next switch, then learning strong fundamentals, practicing consistently and continuously learning is going to serve you well no matter what.
Frequently Asked Questions
Q1. Which is Better: Product Based Companies or Service Based Companies?
It depends on your career goals. Generally, product companies pay more and give more technically oriented work compared to service-based companies.
Q2. Is it possible to switch from a service based company to a product based company?
Yes. Many software engineers switch from service-based companies to product companies by improving their DSA, System Design skills, core CS subjects, and interview prep.
Q3. Are the interviews of product based companies difficult?
Yes. Most product-based companies test coding abilities, problem-solving skills, DSA & System Design in technical rounds.
Q4. Is mentorship important while preparing for product companies?
Yes.many professionals find that structured mentorship, coding everyday, and mock interviews can prove to be really beneficial when preparing for product companies.
