Digital Zoom

This is the 21st issue of the Top Twenty. For 21 straight years, the issue
has provided analysis and insight about the infotech industry. We are happy to
be presenting it once again. While you will find the data in this and three
subsequent issues, let me put down some thoughts that are not entirely data
based. Keep in mind that this is a digital zoom being applied and therefore the
detail level is a bit fuzzy.

n The Internet will see a
rebound. After the dotcom bust it went below the radar screens. Expect a solid
and mature return in terms of quantity and quality of connectivity and products
and services on offer.

n IT penetration in the SMB
market/medium sized towns will finally grow—and rapidly. The talk of this year
will change to action as vendors step up their market development efforts in
these untapped markets.

n The Home PC will be marketed as
an AFD—All Function Device. It will become the music player, jukebox, photo
album, alternate TV, communicator—all rolled in one. Intense competition will
force vendors to offer these and other add-ons with PCs.

n The Corporate PC will become
just another device-if it has not already become one. No frills. No bells and
whistles. Just essential stuff with a high premium on reliability and service.
Brand names will continue to be seen as being more reliable and offering better
service—sometimes erroneously.

n BPO will keep booming
regardless of the backlash. But look out for sell-offs to international
companies. A few players will find the lure of the dollar too tempting. Also
look out for more and more captive BPO outfits coming up. The industry will
grow, but it may not be 'Indian' companies that will lead the charge.

n BPO People issues are unlikely
to die down soon. While the attrition issue has been identified and analyzed,
the solutions are only being contemplated/discussed. It will take more time to
find lasting solutions.

n Music downloads of the unpaid
kind will continue unabated. Paid music downloads in India will happen, but like
waves in the backwaters. No major increase can be expected because Internet
access is low, there are few options, costs are high and download speeds are
low.

n Digital marketing will see a
growth. On line spend will creep up to 3% to 5% of total media spend. The growth
will be limited to a few areas—information dissemination, lead generation,
community building etc.

n Commercial messages on your
mobile phones will grow in the form of SMS and voice. The numbers may not be as
large as email spam, but could be enough to become irritants.

n Mobiles will also spread into
the countryside. Phase Two of the mobile revolution has already started and see
the momentum grow. Even with 36 million odd connections (and a 500% plus growth
rate) there is a huge potential waiting to be tapped. The limit is the speed at
which the infrastructure can be built up. Nothing else.

n E Commerce will grow in triple
digits— with the small base that exists, the absolute numbers will not be
earthshaking, but will boost confidence in the medium and open the portals for
explosive growths in subsequent years. The initial jump will happen in areas
like ticketing, banking, stocks, books, gadgets and other off the shelf standard
items.

n Do not expect any major relief
from spam and virus attacks. Better technology solutions will be found—but
will also be overcome by spammers with regularity. Spam will end only when its
cost becomes higher than the returns to the sender. Virus attacks at the rate of
one serious one every quarter will continue. There is no reason to believe that
the number of sick people who make and send viruses is decreasing. Fortunately
much of the stuff is harmless.

n The Outsourcing buzz will echo
in the domestic market too. Expect at least a dozen big deals to be finalized.
Expect some serious moves from the IT software companies to try and tap the
local market.

n Linux will grow—maybe 10% to
20 % installations will run on it. But do not expect it to displace the
competing environments completely. Coexistence will happen in practice. Maybe
denied in public by some vendors.

n Expect broadband connectivity
in homes and offices to move up. No quantum jumps here, but healthy growth that
is akin to revving up. Take off is a little distant. Broadband penetration is
driven by low costs and high bandwidth applications. The former are still high
and the latter still low.

n The wireless will start
becoming real. Concepts and standards will give way to products and services
based on wireless connectivity for computers and other electronic devices. This
is one set of products that offer so much convenience. As soon as the
availability and affordability improve—as they are showing signs off—expect
the market to zoom. If you do not believe that, please have a look at the
entangled backside of your computer just now.

n E-Governance will happen in
pockets where the governments are secure and committed enough to experiment with
technology-supported reforms. But the movement will be in fits and starts
without a universal momentum. Politicians will be looking over their shoulders
far too frequently to allow that.

n Intrusive marketing in the form
of tele-callers, pop up ads on the net and climax busters on television will
increase. Do not expect the irritation value of these to tire out marketers who
are desperate for innovation in increasingly competitive scenarios. The users of
this form of advertising may not be the technology companies, but they will
provide the required solutions.

n Search on the net will become a
paid proposition and a respectable revenue stream. Free search that returns more
junk then real data is a huge time guzzler and value for money alternatives will
have takers.

n Tech stocks will go up because
they are still the least susceptible to government interference. That is also a
prayer rather than a prediction.

The author is Editor-in-Chief of CyberMedia, the publishers of Dataquest. He
can be reached at Shyam
Malhotra