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Was
Nasscom 2002 buzzing with excitement like the last time around?
Nope. No wide-eyed teens and twenty-somethings lurking at
virtually every corner, seeking millions. Was everybody and
his grandmother there, jostling to get a piece of the software
action? Negative. Just the familiar, serious suits once more.
Was Nasscom 2002 smaller? You bet! There’s a global slowdown
still in progress, remember.
So,
then, was Nasscom 2002 a flop show? No way! In fact, despite
the absence of any blockbuster names on the speaker roster,
the conference showed sparkle and turned out to be quite a
useful reality check for the software industry on several
counts. Of course, as with any large conference anywhere,
this one too had its share of dud sessions, but there was
also ample evidence of incisive thought provocation and substantial
fodder for serious introspection and formulation of future
strategy.
In fact after the post-Y2K euphoria, and the dotcom distraction,
it’s great to see a semblance of sanity returning to
the industry. Everyone’s with their feet back firmly
on the ground and steeling themselves to face the challenges
up ahead. There’s a definite realisation that just wishing
away the slowdown is not going to help us any. Instead there’s
serious deliberation on how we’re going to take to new
markets, take up new verticals, and take on new competition.
Don’t interpret the prevailing conditions only as gloom
and doom. Remember, we’re talking of 30 percent growth
for the software industry during one of the worst global downturns
in recent memory. The industry is growing even at a time when
new IT investment is scarce, billing rates are battered and
global corporations are wary of whom they outsource to. Still,
our fundamental strengths seem to be weathering the storm.
What we’ve got to do is to scout beyond the obvious IT
services pie. The i-flex folk, fresh from their super successes
with software products say that productisation is the best
way to go. Simple extrapolation shows that if we were to continue
down the services track alone it would mean a whopping requirement
of over 5 million professionals by 2008 to achieve $87 billion
(from the 5 lakh or so professionals that account for $8.3
billion today). Further simple math shows that our per-employee
revenues stand at a meagre $16,000; on the other hand for
a product company like Microsoft, that figure’s something
like $680,000!
Regardless of the math, it seems that the software industry
is settling for the IT Enabled-Services (ITES) route, for
now. Indeed, if you look closely, you’ll find that much
of the revenue growth this year has come from ITES, without
which we would have been looking at an upswing of just about
15 percent. With ITES, the software industry has pulled off
quite an admirable coup, in more ways than one.
It was Dr Lalit Kanodia, one of the senior statesmen of the
Indian IT industry and head of Datamatics, who coined the
term IT-enabled services and gave the sector respectability.
What used to be known as ‘shared services’ now had
‘IT’ in its name, enabling it to waltz into the
software industry fold, with all the linked concessions and
fast-track approvals. Great, because there’s big money
to be made, although I do think that attributing the entire
turnover of, for instance, a call centre to the software industry’s
revenues, is stretching things a bit.
But there’s a flip side too. Doesn’t ITES seem like
a contradiction in terms to the oft-repeated desire to ‘move
up the value chain’? Could ITES turn out to be another
disastrous distraction for our software majors? For now, we’ll
leave these questions to the industry leaders to ponder. The
move to pitch India as the back-office of the world is not
at all a bad one. For, it is most definitely true that if
ITES and BPO really take off, $50 billion
would seem like small change; and more important, every educated
Indian highly skilled or otherwise would find gainful employment.
Granny too.
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Val Souza, Editor
valsouza@expresscomputeronline.com
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