Industry Shrugs off War Threat

Only a few CEOs said a war would have

any impact at all, adding that it would only be in the short term–travel

advisories and decisions taking longer. All were united in affirming that

business would go on, stronger than usual

Even as the media hots up its warnings on an impending US-Iraq military

confrontation, cap tains of Indian IT have put their collars up and are going

ahead with business as usual. "We see little or no impact of a war in the

Gulf region on the IT industry," every single CEO contacted by Cyber Media

at Nasscom 2003 said. The CEOs did add a caveat though–if war were to break

out and was long-drawn, then the impact would begin to be more acutely felt.

"War and its impact? I have seen none–fact is that business is

booming. I have received more queries and have traveled more personally for

meetings than I have in a long time. And that goes for the rest of our core team

as well–all our key people are traveling, meeting prospective customers and

making presentations," Wipro Spectramind president Raman Roy said.

He dismissed queries on whether business continuity could come under threat–"We

have always conducted random exercises like pulling down our systems and

simulating strikes… We have tabulated these and sent them out to clients–the

result is our order books are healthier."

Sabyasachi Mitra, associate professor Dupree College of Management, rubbished

the very idea that there would be war. "I believe that the war will not

happen. This is just posturing on the part of the United States," Mitra

said.

"The US is not stupid–it will not do anything that will affect its own

economy. Were there to be a war, it would be short and quick, for a long

standoff would hit the US more than anyone else, and that won’t be allowed to

happen." Inaltus chairman John Barnsley voiced similar sentiments, adding

that India would not be affected.

"In the short-term, there might be a minor impact on India. In the

longer term, there will be none. Business needs to continue as usual. Of course,

if the US economy were to be hit, there would be a fallout on India as well, but

I don’t see the US allowing that," Barnsley said.

S Ramadorai, the CEO of the country’s largest software company, Tata

Consultancy Services, felt that there would be an impact, but that Indian IT

CEOs would meet the challenge and work around it.

"Any form of uncertainty is bad for business, as was evidenced by events

like 9/11 and the Indo-Pak standoff last year. Indian companies will have to

take these uncertainties in their stride, as I am sure they will…"

Both Arun Kumar, managing director of Hughes Software Systems and Nasscom

chairman, and Noshir Kaka from McKinsey & Co believed that the impact would

be limited, and mostly confined to travel advisories and resultant delays in

decision-making and order-closing– "We have been through this situation

before and this won’t come as a surprise.

What will happen, if there’s a war, is that travel advisories will go out

and decision-making will become slower and orders will take longer to close.

Those who already have orders will push and work harder to hang on to them and

deliver.

However, industry has to go on and it will…" Kaka added–"There

will be an impact of war but only in the short term. Either way, the impact will

not be as much as the impact already has been–of repeated threats of war,

9.11, an Indo-Pak skirmish… these, all put together, are as bad as war and

have already been factored in. Travel advisories will go out and visits will

come under pressure, delaying some decisions and orders."

Will Cappelli, V-P and research fellow, Giga Information Group, blamed

sections of the media for instigating panic and fear–"The war will have

its fallout, but this will primarily stem from news reports circulated by media

sections. Our research shows that CIOs have no issues whatsoever on this front,

and are planning to continue with business as usual. Whatever concerns there

are, originate from what people read in the press."

At the opening ceremony of the event, Nasscom president Kiran Karnik stressed

that Indian IT would end the current financial with a growth rate of 30%, as

predicted. "It is the BPO segment that is leading from the front, notching

up an impressive performance. However, the impending war will remain a point of

worry for business leaders, especially if the confrontation happens and

stretches out for a long period of time. For the moment, there’s been little

change on the geographies front–demand has been hottest from North America,

followed by Europe, Japan, APAC and the rest of the world."

Phaneesh Murthy, Prime Mentor of Primentor, felt that this was the time for

India to push home with its advantage in the services space–"There’s a

chance for India to be the IT services hub of the world and I don’t see

anything stopping that, so long as the country and the companies therein keep

investing and working toward this goal. War? External disturbances are a

juggernaut that will never go away–business has to go on and it will."

Rajiv Singh, managing director (India and SAARC), Computer Associates, felt

that war or no war, business would continue to grow, and grow fast–"There’s

been no impact of war on demand in this region. In fact, business in the space

that we operate in has been better. We have shown strong growth in the past

year, and are projecting a growth of 100% in the coming year. Wars and other

disturbances are something that business has learnt to live with, and beyond…"

Paul

Saffo, director and Roy Amara fellow, Institute of the Future, said–"War

can never be good, and uncertainty of any kind is bad news. I also feel that

what this war will do is expose further the profound stupidity of the US

government (and George Bush and his team) and lower their popularity ratings

even further."

"All there can be is a blip for a few months, and things have to pick up

after that. Anyway, in good times, offshoring is always good. In bad times, it

will only get better, with application outsourcing going up," Avinash

Vashisht, CEO of neoIT, said.

"Even geographically, Iraq is farther away from India than is

Afghanistan. If the latter did not have too much of an impact, Iraq will be a

tremor that will barely be felt," he added.

Tailpiece:

Arun Shourie, newly-appointed IT and telecom minister and

head of the divestment ministry, wasn’t too worried either. News reports a few

days back clearly revealed that his divestment plans were not just on track but

buyers were easy to come by too. Outlining plans to divest the government’s

stake in 27 to 30 companies by the end of March, Shourie said it was always the

larger picture that mattered in the long run. "Those who are investing in

Indian companies have a much longer horizon than a war. The privatization drive

has picked up in the last five months, raising $1.5 billion from the sale of

seven companies," he added. So far, the government has diluted its holdings

in 22 companies in the last 18 months, raising more than $2 billion.

Rajeev Narayan