“I see very strong evidence of India and China working together”

Richard Harris, Gartner’s vice president for Asia-Pacific spoke to CHRIS ANN FICHARDO on a variety of topics ranging from the fearsome combination an India-China collaborative effort could prove to be on the IT front, to the fact that wireless technology might actually hit big time in the latter half of this year, to the end of the BPO backlash currently being faced by Indian IT service companies

What are the five technologies that Gartner is betting on?

It is not so much about technologies than it is about the areas where certain technologies are going to make a major difference and within that there are multiple technologies. There are areas around compliance and risk management and there is a range of technologies that fit into that. In the broad sense, we will see a lot happening in business process management and Web services and architecture services. We will continue to see technologies that will help integrate legacy systems.

The technologies that will rule are those related to infrastructure, both for the economy as well as the organisation.

What technologies is the enterprise sector investing in today?

Mostly, enterprises are continuing to strengthen the technologies they have invested in the last four to five years. In most cases it’s the enterprise system; some are still implementing CRM solutions. Most other concerns are to do around the area where the architecture requires them to have a greater degree of shared services and consistency and commonality across the business—like in databases. This consolidation trend has been going on for the last couple of years and will continue.

However, the Gartner forecast is that next year will see more interest in other technologies like wireless—corporates are holding back on investing in this area right now. We have still been in the pause and digestive period for the last two years, but in the latter half of this year we might see some positive changes.

Gartner predicts that by 2004 the backlash on the Indian BPO industry will disappear. What are the reasons for the confidence?

The backlash, which is particularly evidenced in the US and even in some parts of Australia, is largely being driven by governments that are concerned by the loss of employment or unions that want to justify their existence. Free enterprise democratic countries are driven by economic forces and jobs and the movement of those [jobs] are part of the rearrangement and restructuring as the world becomes more global.

Companies base their outsourcing decisions on economic reasons regardless of what unions and government decide, so those are the major drivers that will continue to take sourcing wherever it is appropriate. The current negative sentiment will continue for a while but will fade in time. So that is why Gartner confidently says that the backlash will not be the death of industry as we know it today.

Would the backlash have any long-term repercussions on the industry?

I don’t think there are too many long-term repercussions. I think one of the things that is characteristic is companies that we talked to are demonstrating how rapidly they are coming to understand what is required. I have been very impressed with the IT services companies I have spoken to and by their understanding of what is required to survive in the future. So I truly don’t see any long-term repercussions other than how the backlash is another lesson on how they [companies] need to adapt to future needs.

We don’t hear so much about China as a threat anymore?

I think that is a very positive trend that has happened. Gartner has been saying for quite sometime now that there should be no all-out competition between India and China. These two countries actually complement each other. If the two countries put their core competencies together it would be a fearsome combination. There are still uncertainties because of political situations, but Gartner doesn’t see this as an issue.

Yes, the countries are different. But we have continued to observe changes in the political situation in China. From being a very dogmatic country, China is now becoming more pragmatic and is absolutely committed to economic development, which is guiding much of what that country is doing on the commercial front. I can already see very strong evidence of India and China working together. I think most of this is going to be driven by key organisations in both these countries.

Which segment is driving sales in the corporate segment—SMEs or large companies?

It’s still large enterprises. I think the focus on SME has been misplaced, to say big business is not buying lets focus on the SME market was not a right move, they are not opening their purse strings either. So in a sense that was hope without reality. Organisation will continue however to have offering for the SME client, but once the big business picks up, that is where they will continue to focus.