On the upswing

A higher intake of IT professionals, profusion of technologies and products and consequent reskilling is boosting the fortunes of the training segment

The Indian IT training market can be termed as one of the most mature markets in the global scenario. The overall training industry market size was around Rs 1,100 crore last year of which the retail training business constituted around Rs 873 crore and the corporate training segment Rs 227 crore. The IT training industry exports are pegged at Rs 110 crore, which is about 10 percent of the overall market size.

The IT training market witnessed tough times from 2001 onwards but has shown signs of resurgence from 2003-04. The training market is poised to grow at about 20 percent this fiscal year and hence there is buoyancy and cheer amongst all IT training companies.

The IT training segment can be broadly classified into the organised sector, and the unorganised sector.

The organised sector

The need for skilled manpower is increasing, and with technology upgrades, re-skilling will become a big market Jeetendra Nair Vice President, IT Karrox Technologies

Organised sector companies are those that operate from multiple centres and have been in the market for a decade. These companies invest in people, products and processes. The objective of such companies is to invest in the industry and offer value to its learners and students by enhancing their knowledge base and making them more job worthy. The general features of such organised sector companies are stable operations of more than 10 years, professionally managed, have a network of centres (national and a global presence), good courseware, structured way of delivery, dedicated and state-of-the-art infrastructure, experience of having trained a few thousand students and most important of all, they have a good client base that keep coming back to them for re-skilling.

The unorganised sector

Unorganised sector companies are more like the grey market operators in the hardware segment. Most are opportunity-driven and hence you would find them inconsistent in their presence in a particular marketplace. These are companies that are predominantly opportunist in their approach, are not professionally-managed and hence most students do not find value or recognition from these companies. In a nutshell, money paid to an organised sector company at most times can be termed as an investment whereas in case of unorganised sector companies, it would be termed as an expenditure.

Trends

The IT training industry has witnessed some of the most interesting trends in the last few years. They can be summarised as follows–

• Markets are moving from a pure skilling market to a re-skilling market.
• Despite fierce competition, IT technology products continue to co-exist while they compete thus leading to good multi-skilling opportunities on different platforms and products for training companies
• The expansion model for most companies has moved away from franchising to setting up own centres
• The thrust on global operations has reduced due to the high growth of domestic markets
• The academic base required for pursuing a career in IT has widened from minimum of an engineering degree to even fresh graduates from other streams.
• The demand supply graph has widened substantially over the last 18 months
• There is a recruitment frenzy at almost all levels of IT compaines
• Security training is emerging as a new opportunity for advanced high-end training companies
• The IT training segment is quite well segregated between software, networking, IT security, multimedia and animation segments. Earlier it was largely software driven.

Movements of training industry

The IT training industry is on a growth path with the software and networking sectors on the upswing in India. The training industry is normally dependent on the growth of IT and technology products at the local as well at the international markets.

With India becoming the hub for IT development and lucrative opportunities available locally and most importantly with new products and technologies hitting the marketplace with regular frequency, IT training never had a better economic climate.

The need for skilled manpower is increasing, and with technology upgrades, re-skilling will become an equally big market. With the demand supply gap growing there are abundant opportunities for a good scalable and sustainable business model.

Another important aspect to the considered is that the US impact has reduced over the years since opportunities are aplenty in the local markets. Moreover, the markets have also moved from being US-centric to being scattered globally.

Segment training

Any IT training company needs to belong to a specific segment or domain. The largest segments in the IT training industry are software, networking, multimedia and IT security. Most companies choose their domain and try to operate within the limited products and courses therein.

These segments are growing at a similar pace except for security training where the growth rate is higher. Hence, it is difficult choice to make for most companies. However, if the company has the technical bandwidth and the ability to invest and focus, they can cater to all these segments. However, such organisations are rare in India.

Business model for expansion

Earlier, franchising was the only form of expansion for the education industry. However with complexity of business increasing with time and quality being the buzzword, a few organised sector companies have moved away from franchising to either the manage-franchise model (management is done by the company) or have ventured into their own centres.

The margins in the IT training industry continues to be good and hence companies with good fiscal policies believe in investing in own centres rather than franchising and working on lower margins.

This model has progressed further with companies setting up their own centres at key locations and appointing franchisees for market penetration. In the marketplace, this is most often referred to as the hub and spoke model and is considered to be one of the better models of expansion thereby retaining profits through own centres and expanding market share through franchisees.

The role of KarROX

KarROX Technologies offers a single window for all training solutions. It has been in operation for the last 14 years and over the period grown steadily and consistently. It is among the few organised sector companies with a presence in about 50 locations in India and about four locations abroad.

The company says that it is technically advanced and is popular for launching courses on the latest technologies at the earliest. It has strategic alliances with top technology companies and some of the most advanced labs in the IT training industry.

KarROX caters to software training, networking training and IT security training through a range of courses. This is managed through three different technical teams which has top notch professionals at the helm of its affairs.

What sets it apart from competition are its trainers, technology (latest courses), courseware, global certifications, good infrastructure and most importantly student relations. More than 65 percent of its business originates from internal references.

Anticipating change

KarROX’s Board of Directors boasts of top industry names. (refer www.karrox.com). Besides the high powered board, its high technology investments and partnerships with technology companies always helps it keep ahead of competition.

It has a decentralised structure and its staff is empowered at all levels to manage their units and domains.

Future plans

KarROX will aim at a growth of about 60 percent this fiscal year. It plans to consolidate its leadership in the software, networking and security training space. It plans to expand its presence to 40 new locations in the next fiscal year of which around 10 of them would be self owned or managed centres and rest would be operated through the franchise model.

The company is bullish about its prospects and expects a good fiscal year ahead for the industry.