It must be tough to be an entrepreneur in the Indian IT industry-to feel
discouraged as the DQ Top 20s float in with news of more and more flights to
scale-the big getting bigger and the small "me-too" players dropping
behind in the chase for the pot of gold at the end of the proverbial rainbow.
Talking to two industry veterans who have set up new software companies in this
decade, and are struggling for survival and relevance, it is striking to note
how much of a "size caste system" is beginning to form in IT.
Particularly the software side of the industry. But for those of you who still
have entrepreneurial success dreams, let’s do some horizon mapping that may
put that optimistic gleam back into your weary eyes!
Horizon mapping is an art similar to the concept of "sigmoids" that
the celebrated lateral thinker Charles Handy writes about. Every organization
goes through a life cycle of infancy, growth, maturity and, inevitably, decline,
with its chosen range of products and services. Handy has suggested that before
the signs of decline are beginning to make the "sigmoid" of growth
change direction and move south, clairvoyant business leaders should have found
new growth opportunities.
Easier said than done, of course, as a McKinsey speaker pointed out in a
recent conference in Mumbai, "Over 80% of the Fortune 100 companies of the
twenties have dropped out of the list today with a significant portion of them
having even gone out of business".
So what’s the story here? The very horizon of lower costs and higher
quality that has seen the great offshore story being built and mastered by the
Software WITS (Wipro, Infosys, TCS, Satyam) and now being quickly learnt by IBM
and Accenture can prove to be a quicksand of disillusionment for copycat
entrepreneurial wannabes-as Vivek Paul said in his swansong at Wipro, it is no
longer possible to build another Infosys or Wipro, and entrepreneurs would be
well advised to focus their sights on newer horizons.
What are the horizons we are talking about for the software industry? If we
assume that the traditional onsite staffing model is already on the deathbed,
the first horizon is all offshore. The second horizon consists of today’s
nascent businesses which are already being tapped by some of the larger players
and also providing profitable opportunities to young entrepreneurs. All of which
have enough juice left in them in the form of profitable revenue streams from
multiple markets to provide opportunities for growth and innovation.
So what does Horizon Three hold and who will be the beneficiaries? The most
obvious is of course total IT sourcing where the overall responsibility for
managing datacenters will shift to Indian and Chinese providers taking Remote
Infrastructure Management to its logical hundred billion dollar plus potential.
One could argues that this would be clearly a game only the big boys would be
able to play but there would be many more transformational activities that could
well be performed by high quality niche players-hardware design and embedded
systems development and deployment, comprehensive collaboration and content
management solutions connecting and energizing global enterprises, and, of
course, deep domain consulting to serve both as a precursor and a supplement to
IT offshore services are just a few opportunities that come to mind. It is the
ability of a new generation of entrepreneurs to conceptualise, articulate and
deliver product and service suites in these areas that will see India remain an
IT Superpower in the next decade and enable us to realise a One Trillion Dollar
dream by the year 2020.
The author is Deputy Chairman & MD of Zensar Technologies and Chairman
of the NASSCOM Innovation Initiative Ganesh