A Paradigm Shift in Overdrive

When

Microsoft paid young Sabeer Bhatia $400 m for Hotmail, there was

still something distant about that. Such things do happen in the

US. Sure, we grappled for a while with the eyeballs paradigm, with

the odd idea that anybody would pay that much to buy a service where

the users would never pay. But the internet age has spawned many

a strange thing. Microsoft spent millions of dollars developing

a free web browser. Tech giants busily invested in Red Hat, whose

sole product is a free operating system.

But when Satyam bought Rajesh Jain’s

IndiaWorld, the Indian infotech and business communities sat up

and rubbed their eyes. Rs500 crore for a website business that has

Rs1 crore in revenues, a quarter of that as profit before tax? And

there were the millions being spent by Rediff.com on advertising

its free mail and other services? Suddenly, the internet went center-stage

in financial and corporate India.

IT itself has been center-stage for

a while. The sensex is driven by IT stocks. Infosys and Wipro have

displaced the traditional business houses with over Rs30,000 crore

each in market cap and they’re nudging ONGC and HLL for top spot.

A few days after Infosys overtook the Reliance group’s market cap

the latter announced its move into software. A Rs10 Infosys share

crossed Rs10,000, a stock market record. INFY lit the way to Nasdaq

for other aspirants.

Then consider the growth of the software

giants. You might expect small companies to see double or triple-digit

growth but companies the size of TCS, Pentafour and Infosys growing

at 60 to 90%? Add the margins of the software business and it’s

no wonder India is so obsessed with software stocks.

The next two years will see path-breaking

advances in conventional science and tech from the complete genetic

sequencing of the human body to the launch of commercial space travel.

It’s also the time when the words we see around us will beg in with

‘e’ or ‘I’, signifying the tremendous impact of IT and the internet

on the world at large. Spurred on by eforces in the last year of

the century, IT has reached a critical mass. India too enters Y2k

with IT as decisively mainstream, riding giant market caps, profits

and thousands, perhaps millions, of aspiring IT and web entrepreneurs.

And that can only be a great thing for India.

pkr@cmil.com