STPI's role began in the government's shadow and it was more of an entrepreneurial role of working directly with software companies and working like a corporate. However, this did not mean that STPI functioned like a typical government department. The role of STPI was more of a service provider that could be leveraged by software companies.
Therein emerged three important factors that gave the necessary impetus to the concept. These were the newness of the business model, Internet infrastructure facilities and the government interface; all these brought a positive response from industry, especially the SME sector, which needed this support for their business to grow.
In 1990s, the STPIs were established through three separate autonomous societies at Pune, Bengaluru and Bhubaneswar, which were later, merged in June 1991 into a single autonomous society and in quick succession STPIs at Noida, Gandhi Nagar, Hyderabad and Thiruvananthapuram were established. All STPIs were equipped with dedicated earth station equipment for providing Data Communication links.