Life Beyond IT Services...

Around this time last year, IT companies were looking down the barrel of a

loaded canon. Post the dotcom bust and 9/11, a deflated IT industry was to be

further rocked by an incessant stream of scandals. As though by prescience, last

year’s IT.com was shrouded in a pall of gloom. Last minute cancellations and a

jittery industry added to the despondent atmosphere. But its sequel,

BangaloreIT.com 2002, has made the IT world heave a collective sigh of relief.

It may not have been a throwback to the pre-downturn Y2K days, but the overall

sentiment was more like the official punch line for event–"There’s more

to the future!"

The five-day-long event managed to attract 264 companies this year. Of these,

230 had put up their stalls at the exhibition and 53 foreign companies

participated for the first time. There were 42 sponsors and while 16 countries

had their stalls, 13 Indian states too were present. "It was an improvement

on last year. This year, we received better participation in almost all areas as

compared to last year. The quality of business visitors also improved. The area

with lower performance was the number of general visitors who probably kept away

because of the rains," said state IT Minister DB Inamdar.

Bangalore IT.com 2002: Fact File Number of Sponsors : 42 Number of companies that participated : 264 Number of foreign companies that participated for the first time : 53 Number of Indian states that participated : 13 Number of foreign countries that had stalls : 16 Number of attendees at the CEO conclave : 300

The event has also witnessed growing disenchantment and lack of

representation of special interest IT groups in the last few years. In 1999 for

instance, one of the six pavilions was of Linux. That pavilion has disappeared

in the last few years, as has representation from special interest groups. On

the upside, the number of business visitors increased to around 50,000 including

300 foreign delegates. The event also had seven conferences. The two additions

were the BPO and the banking and finance seminars.

Life beyond services



In many ways, this year represented the industry’s continuing attempt to

find revenue streams outside traditional IT services. The two catch phrases at

this year’s conferences were–Business Process Outsourcing (BPO) and looking

beyond IT services. These two themes were the underlying messages of most

conferences and India’s future as the back office of the world dominated

speeches. A growing superiority in infrastructure, the required educated

workforce and cost advantage against existing competitors were the BPO strengths

spoken of, along with the ability of the BPO segment to provide mass employment.

"By 2010, the employment potential in India will rise to 360,000 across all

states. The Millennium BPO policy by the Karnataka government will play a key

role in ensuring we reach that target," said Sharda Cherwoo, CEO of Ernst

& Young, Shared Services (India).

The options



Many at the conference also believed that if India Inc wanted to be reckoned

as a global player in IT, it would have to look at product development

seriously. "Indian players would have to seriously consider stepping into

the realm of product development. It’s a completely different ball game

compared to the kind of services that Indian players have been traditionally

delivering. It requires specialized skill sets including the ability to market

products internationally. In that sense, one does not see winning products

emerge from the IT services majors in India," said Dr Biswadip Mitra,

Managing Director, TI India.

Announcements @ BangaloreIT.com, 2002 CDAC is all set to launch its first one teraflop supercomputer. The computer would be linked to the proposed 10 terra flop Information grid (I-grid) to be set by the Union Ministry of IT at a cost Rs 130 crores.  The Kerala government has announced the setting up of a BPO Park and a BPO habitat center at Kochi where BPO related training would take place. Chandigarh announced setting up of an EDC in collaboration with STPI at the proposed Chandigarh Tech Park.  Infosys Technologies Ltd will set up its first disaster recovery center in the island nation of Mauritius. The disaster recovery center will become operational from January 2003 on a rented site. In about three years, Infosys plans to shift the center to its own premises, with an investment of $25 million. AOL announced the starting of its BPO venture in Bangalore with a workforce that is likely to scale up to 1000 people in six months.

The IT Services segment however remained a key concern area. The industry is

going through what one speaker called the Red Queen phenomenon–companies are

running faster only to stay where they are, thanks to stiff competition and the

resultant undercutting of prices. "Smaller companies should develop

specific competencies in niche areas. Also, Indian SMEs should form a

consolidated global interface for mutual collaboration and ensure that global

customers do not take undue advantage of them on the pricing front," said

Rajeev Ratna Shah, Secretary to the Govt of India, Ministry of Communications

& IT in his keynote address at TiECON 2002.

Okay on the state front?



All the usual states also participated in the event though Tamil Nadu was

conspicuous by its absence because of its ongoing spat with Karnataka on the

Cauvery issue. Other than reaffirming their usual commitments to being investor

friendly for technology companies, the states also showcased their respective

initiatives in e-governance. Noteworthy among them were the initiatives by West

Bengal, Kerala, and Chandigarh.

Even though West Bengal’s share in the country’s software exports is only

3-4%, the state hopes to increase that to 15-20% by 2010. Kerala too announced

new measures including the setting up of a BPO Park and a BPO habitat center at

Kochi, where BPO related training will be provided. Chandigarh announced setting

up an Entrepreneur Development Center (EDC) in collaboration with STPI at the

proposed Chandigarh Tech Park. Despite this, there was a prevalent feeling that

the traditionally active e-governance states had nothing new to report. And the

likes of Orissa and MP, who had a large e-gov presence last year, were far more

subdued this time round.

All told, India’s largest and most talked about tech mela did better this

year than last, though with some mixed results.As one participant put it–the

question for next year is–should such events be better focused in the ends

they intend to achieve? Or should they continue to be a forum for different

companies to meet?

TV Mahalingam in Bangalore