With the domestic training industry facing a slump in growth, training majors are looking at business expansion with a global perspective. Rajneesh De examines what this means for the training industry in India and finds that private training institutes are realigning themselves to find new avenues for growth

Training: Top Trends

• Private initiatives in education to continue; further expansion to foreign shores.
• Emergence of fewer, but much stronger players.
• Linux and networking certification courses will increase; more demand for multimedia and embedded technology courses.
• Hybrid model of course delivery.
• Long-term software engineering courses will thrive along with high-end, niche software courses for retraining.

When the Indian software industry was faced with its first real crisis following the downturn in 2001, a considerable portion of the impact was also deflected onto the Indian IT education and training industry. As a result, even some training majors found themselves faced with negative growth rates, after having enjoyed handsome year-on-year growth for over a decade. It’s difficult to reconcile with the fact that an industry worth Rs 2,500 crore is going through rough weather. But the very fact that it witnessed a growth rate of only around 10 percent in 2001-02 as against the 35 percent levels that had more or less become the norm over the past few years, lends credence to the argument that the training industry is not exactly in the pink of health.

However, according to most industry experts, though the downturn for the training sector was a direct impact of the slowdown in the software sector, the silver lining was that it turned out to be a long overdue industry correction. And the prediction is that even 2002-03 will see only a similar 10-15 percent growth, with the market reaching Rs 3,475 crore by 2004. This will make India the leader in IT training in the Asia-Pacific region, witnessing a 7 percent jump from the current market share of 21 percent.

Does this mean that 2002 will in fact not be the end of the road for private initiatives in IT training in India, as many sceptics would have us believe? That’s what Rajendra Pawar, chairman, NIIT, feels as he continues to be convinced that IT will offer much more promising career options than most other fields, in spite of the temporary slowdown. Even in 2002, private initiatives in education will continue to create new mechanisms to build manpower for IT in the non-formal sector. Perhaps, it would be supplementing what is happening in the formal sector as well, where a concerted effort is now being made by the government to impart quality computer education in degree colleges.

But what are going to be these new mechanisms in the training sector in 2002? The industry correction of 2001 would lead to many more players being negatively impacted, with customers differentiating between institutes on the basis of their fundamentals. This cleaning up process is likely to continue throughout 2002, eliminating a lot of mediocre players and in the process leading to the emergence of fewer, but much stronger players those who have solid business models, strong process capability, and a rich legacy of customer confidence and goodwill.

No more shortcuts

A sobering effect of the slowdown and the resulting correction is that shortcuts are now passé. Institution building is a long process that involves years of investment in core values like ability to innovate, commitment to quality, good results sustained over a long period of time, and most importantly, an in-depth understanding of the market. Segmentation of training offerings on the basis of diverse requirements of consumers would be the need of the hour. This applies to programmes in advanced areas for IT professionals, study programmes for students seeking careers in computers or short programmes for those who simply want to be computer literate.

A significant trend of 2002 is going to be the realisation by both the employer and the student that there is no shortcut to success, driving them to opt for longer, fundamentals-oriented courses rather than short-term skills-based programmes. New learners will be challenged to keep up with emerging digital tools, as employers can now take the time to look for people with the right skills. The beneficiaries will be computer professionals who have taken the trouble to arm themselves with a sound grounding in core technologies and then equip themselves with the right skill-set. So, just as the dot com shakeout forced companies to pay attention to fundamentals, students will be challenged to be on their toes, instead of only looking to get rich quick. Educational institutions will also be challenged to anticipate market shifts, while at the same time not going overboard on every new technology fad.

Courses for 2002

Therefore, the question that becomes imperative is, what sort of courses would be the driver for growth in 2002? Kishansinh Gohil, head, Aptech Computer Education, believes that there would be a lot of interest in career courses that stress on improving fundamentals of students and giving them a thorough grounding in IT skills. Long-term software engineering courses are likely to thrive along with high-end, niche software courses for retraining or enhancing skills of existing software professionals. Short-term courses could become the likely victim, thereby wiping out a majority of the nearly 5,000-odd fringe players in the training sector. These are mainly the ‘mom-and-pop’ outfits, running out of a single room, hooked up with a couple of computers, usually in the SEC B and C towns, but accounting for almost one-half of the Rs 2,500 crore industry. As a result, 2002-03 could see the 10 largest operators who make up the rest of the industry, consolidating operations and grabbing a much larger chunk of the pie.

The technologies that will be in demand in 2002-03 are Unix and C, networking, multimedia, frameworks, embedded technology and call centre operations. Not only plain vanilla Unix, but even variants like Linux, which had already gained popularity in the last two years, would grow further this year. With Linux expected to grow by 80 percent over the next 3-4 years in India, more and more students are likely to enroll into certification courses teaching different Linux distributions like Red Hat, SuSe, Caldera, Corel and Mandrake. Networking courses too are likely to have a large number of takers, with Cisco certification occupying the top slot. However, the popularity of erstwhile chartbusters like Microsoft and Novell certification courses seem to be gradually on the wane.

Multimedia will continue to be the other crowd puller for the training industry in 2002. A major bottleneck for all Indian animation houses still remains the lack of trained animators, with there being only 15,000 trained professionals currently, as against a Nasscom estimate of a demand for 3,00,000 people by 2008. What we will see more and more in 2002 is studios commencing in-house training, which would over time metamorphose into a separate business offering. Besides generating revenue for animation houses, it guarantees them a captive pool of talent. Another niche area with lot of growth potential this year is embedded systems software like those used in intelligent devices like ATMs, printers, copiers and fax machines. Most engineering students with knowledge of machine- and assembly language progamming are opting for these courses. Also in demand are courses offering training for IT-enabled services like call centres and customer relationship management.

Hybrid education

The coming year is also likely to see the adoption of a hybrid model of delivery, which would include integration of online, technology-based training and class-room facilitation or Instructor Led Training (ILT). Currently, ILT accounts for 87 percent of the IT training market, though by the end of 2002 it is expected to drop to 74 percent, with e-learning and CD-ROM tutorials challenging ILT as an alternative learning medium. While e-learning is not a solution for every training need, it definitely offers a good low-cost answer to complement traditional training methodology.

With the domestic market entering into a consolidation phase, 2002 is also likely to witness leaders in the training space further expanding their operations to foreign shores. Pramod Khera, CEO, Aptech, believes that the hugely successful domestic franchisee model for training would be replicated with equal success outside India too. Currently, Aptech has 235 international centres in 52 countries, while NIIT is present in 27 countries with about 150 centres. These include locations like Colombia, Botswana and Vietnam, with many more likely to be added to the roster in 2002. While India Inc is worrying about the Chinese threat, the major training players are likely to gain a strong foothold in mainland China in 2002-03.

With most of the training majors also having a software services arm, the year 2002 is likely to witness the demerger of the two businesses. The process started with Aptech in the beginning of this year with the software arm demerging from the training one and joining hands with group company Hexaware. NIIT is likely to follow suit soon, with other players like SSI, Tulec (Tata Infotech) and CMC (post-TCS acquisition) too having plans of a demerger of their training divisions up their sleeves. The rationale behind this business restructuring for most would be the fact that the training and software businesses have different growth profiles. Their target markets, customer profiles and key success factors are different, with training focused more on a retail audience, while software development is focused on corporate clients.