Boom. Bubble. Crash. Survival. Recovery. Growth.
That’s a brief history of the Indian IT market over six years. And also, to
an extent, of the global market. India’s software exports business saw a
different picture, for "crash" in the US meant more offshoring-and
That brief history doesn’t capture detail, of course. It doesn’t capture
the inevitable, even permanent, scars of such severe swings in the economy,
industry, and therefore IT-not to mention the stockmarket. It doesn’t
capture the learnings either.
Suffice it to say that however good the graph begins to look, it will be
years before the bubbly really flows. For years to come, "caution"
will be an overriding sentiment.
For the CIO, the takeaway is RoI. Answerability. Measurement of returns.
Stretch every rupee. Do more for less.
But gradually, as enterprise spend on IT recovers (the DQ Megaspenders
survey, which was bang on the nail with last year’s prediction of 6% increase
in enterprise spend, points to 26% increase this year), enterprises move beyond
those easy-RoI tactical investments, to more strategic rollouts. Enterprise
application integration, business intelligence… for SMBs, it could mean the
decision to finally deploy CRM or a business app. For a doctor, clinic or
pharmacist, it may mean the decision to become a first time user.
For the industry, "caution" means a good deal of care with credit
terms, collections, overall fiscal control, partners selection. Some of the
casualties of the recent years were caused by poorly managed companies that
folded up, leaving behind sundry debtors and creditors. Some cases were malafide,
but the net effect was often indistinguishable by the creditors. Consider the
impact on a 15-crore dealer who trades at 2% margins and has to suddenly write
off Rs 30 lakh. He’s almost as likely to go down as the original defaulter.
Services is where the margins are. But it’s no cakewalk getting in-especially
as the big league has jumped in. Some of the fiercest battles will be fought
Integrated sales, one customer face: Those who haven’t,
will. The smaller ones will seek partners such as SIs who already have inroads
into large and midsize customers.
Small towns: finally, the hype has turned to action, as big
distributors have set up base upcountry.
The consumer: We saw what a tariffs drop can do: there’s a
PC boom. Again, for home computing, the hype has turned to reality.
Small business: One still-unexploited area, one which is
going to see a lot of action as a few of the applications gaps begin to get
The continuing flight to scale: the Top 20 companies moved up
from 46% share of the total industry to 49% to 50% last year-by consistently
growing faster than the industry. Growth, as much as bottom line, will be the
challenge for the smaller players.
All in all, an exciting year ahead.