IT Training

With India Inc beginning to look

more closely at information technology for both global and domestic competitiveness, a

strong demand exists currently for trained, ready-to-use professionals across the

enterprise. Vendors offering professional certifications for enterprise applications and

solutions are experiencing mindboggling growth rates as sheer numbers skyrocket upward.

And the availability of certified professionals is only fueling further product sales,

leading to a cyclic increase for more professionals. Certified professionals in ERP,

network management and administration, messaging, RDBMS are all in demand as never before.

Adding to these are the six figure starting salaries, which these professionals command

and demand if they get to other shores. Piggybacking on this wave are the erstwhile

domestic training vendors who have transformed their course offerings to prepare fledgling

students for the certification onslaught. We look at the dynamics of the currently

unfolding saga of professional training. A picture now looking brighter than ever before.

Till a decade ago, a 12-month

course from NIIT raised many an eyebrow. The usual questions were: Is the course really

worth the fortune it costs? Is it not more of a status title than being really a career

and learning opportunity. Yes, a career in computers sounds fine-but this is only a

diploma.






However, today, most of the stigmas associated with private learning institutions have
receded into the background. More than 3,000 training centers can be counted across the

country, from about 35 training vendors who are delivering quality education with

standards acceptable to many. And early indications for 1998-99 with DATAQUEST puts the

number of students enrolled at close to 700,000. While the number does not reflect the

percentage of those who drop out or multiple enrollments by the same student, it is still

a whopping figure for an industry which was looked upon as a money making racket till a

decade back.






The singular certification


If there is any single reason responsible for the training industry taking on additional
credibility in the last two years, it is the strategic move by global software vendors to

create quality manpower for their products. And this has been brought about by the process

of professional training certifications.






Vendor certification involves teaching a predefined set of courses to students at assessed
study centers with examinations conducted by a neutral and impartial monitoring

organization. Certifications can involve entry-level titles like Microsoft Certified

Professional and Certified Lotus Professional to more advanced ones like Microsoft

Certified Systems Administrator with Internet, Oracle Masters Application, Baan

BoundarySpanners, Cisco Advanced Router Configuration and etal. In either case, most of

the software majors in the country like Microsoft, Oracle, Sun, Lotus and IBM are

experiencing growth in the number of their certification professionals, in thousands.

While Microsoft saw the thousand growth rate a few years back, Lotus and Sun are currently

experiencing it.






So what's behind this certification trail blazer? The answers are mixed. Remarks Amit
Srivastava, Manager Education and Certification, Microsoft, "We realized our products

were selling well, but there was not enough expertise available. Everybody was giving

training in whichever way they wanted, but we didn't want to get into the training

business." Adds Nandu Pradhan, VP, Onward Novell, "If customers are convinced

that professionals are available to support the product, they buy the product." And

Sonia Malik, Education Manager, Lotus Development points out, "Certification helps

maintain product usage standards. This leads to better utilization and deployment of the

product and better RoI."






So, while on one hand, we have professional certifications driving sales of software and
hardware products on the other, we have product sales driving the need for certifications.

A powerful, mutually reinforcing cyclic process, with product, skill and manpower

saturation as the only leveling factors. As Amit points out, "There is a direct

correlation between certifications and product sales." And this has been reinforced

by both the Microsoft product and certification numbers. The number of Microsoft

Professionals is witnessing a skyrocketing increase every year, from 470 in 1996 it went

up to 4,700 in 1997. In 1998, the figure was 19,100 and is estimated to have reached

83,100 in 1999. And on the product side, first with Windows NT and then with SQL Server

7.0 and now with Office 2000, Microsoft product growth sales have been consistently in

double digit and even triple digit figures. According to IDC (India), Microsoft has been

doubling its marketshare for the last three years in the server, RDBMS and messaging

marketspace and, therefore, the demand for support professionals in these areas has been

steadfastly fueling the professional certification boom.






In comparison, while Autodesk has the largest number of certified or authorized training
centers due to its early entry in the certification game, its product sales and

correspondingly the number of certified professionals turned out, are magnitude levels

below Microsoft. Now consider Oracle, the next closest competitor to Microsoft in the

certification numbers game. While SQL Server has been making steady inroads in the RDBMS

space, the DATAQUEST ERP Survey 1999 indicates Oracle to be the preferred RDBMS in the ERP

space and enjoying tremendous brand loyalty in the domestic market. Moreover, with the ERP

market still in the early growth stage and with growth rates of above 30%, the sheer

requirement of ERP and Oracle professionals drives them into the number two slot.






In fact, an elementary calculation using the numbers from our certifications table and the
average Microsoft and Oracle certifications costs (Microsoft=Rs25,000,Oracle=Rs150,000,

see page 63) indicate that both address the same sized revenue market, though their unit

numbers differ by a factor of eight. A spin off- again using our table on number of

certification centers-on an average an Oracle center makes five times more money than a

Microsoft center. Smart move, Microsoft sweats out the numbers, Oracle milks the fat.






But there are more reasons for the certification blast off. According to Kamal Malhotra,
Country Manager, Sylvan Prometric, the organization which conducts certification tests for

almost two dozen IT majors, "The primary driver for certification enrollments is

career advancements. And compensation and job avenues rank at the third and fifth position

in terms of priority." Kamal remarks with confidence, since these results have

emerged from a GartnerGroup global study syndicated by Sylvan, Hewlett-Packard, Microsoft,

Novell and Sybase involving 6,000 certification candidates. However, it's not clear

whether these results are applicable to the domestic environment. Supporting the

possibility of alternative drivers, Amit remarks, "A lot of people want

certifications to go abroad. Today, the starting salary for a Microsoft certified

professional is $100,000." A fabulous sum. Says Sonia, "The starting salary for

a Lotus Certified professionals varies from $55,000 to $73,000," the results are from

the annual global salary survey.






To fully capitalize on the demand for vendor certifications, many of the training majors
offer certification courses as standalone courses from select centers across the country.

Many, however, have realigned their medium and long-term career courses to include the

certification course structure and syllabi within them. Completion of the career courses

would automatically entitle them to appear for the particular vendor examinations.

Examples are Aptech offering certified courses from Oracle, Microsoft and Novell;

Microhard Institute offering Novell; TULEC offering Novell, Intel and Baan; Pentafour

offering IBM and SGI; NIIT offering Microsoft; and SQL Star offering Oracle, Lotus and

Microsoft. In fact, a career course offered by a particular vendor even allows a candidate

to appear for 18 certification examinations.


























Vendor Certification Centers

Vendor Certification Numbers

*Source: DQ Estimates

Looking at the costs of training courses (page 62), both by total fees and per days costs,
certification courses come right at the top. The certification courses offered by the Baan

Institute and Oracle Education are among the most expensive in terms of the total wallop

they punch and the Cisco and Intel certifications are the fastest pocket burners. As SV

Krishna, GM, Oracle Education, remarks, "We charge a lot for our courses but our

authorized centers are free to give discounts, depending on the market situation."

But costs don't appear to be limiting certifications line-ups.






Competitive Strategic Positioning: Price And Duration


While the vendor certifications have gone a long way in imparting credibility to the
domestic training industry, credit also needs to be given to vendors for creating

consistent deliverable standards, assessing industry and student expectations, positioning

their service offerings at suitable price and duration bands, creating brand awareness and

satisfaction and managing other key competitive success factors.






A fundamental approach to understanding vendor strategies in the training industry is to
position their service offerings on the basis of total duration and total fees (page 59).

For this, DATAQUEST assessed approximately 500 different courses from about 36 vendors

resulting in a reasonably clear picture of various competitive market arenas. All courses

were converted into a uniform duration baseline and uniform fee cost structure. A training

day was assumed to be of 4 hours duration, a week of 5 days and a month of 20 days or 4

weeks. Courses with a duration extending beyond six months have been termed as long-term

courses, those between 15 days and six months duration as medium-term and those with less

than 15 days as short-term course.






The largest market which has emerged from this positioning is the Long-term Mass Market
with the presence of traditional competitors like Aptech, NIIT and TULEC offering career

courses. With a degree offering from a foreign university, the course fees shoot up

leading to the opening up of the Long-term Very Select Market, currently dominated by

Arena Multimedia and TULEC. There is also the possibility of the Long-term Select Market

being developed with an intermediate price differential, and this has been indicated.






The medium term market is currently well segmented, developed and populated with offshoots
including the Medium-term Mass Market, Medium-term Select Market and Medium-term Very

Select Market. This differentiation of the medium-term courses is created by the price

offering. With vendors like Globsyn Technologies, Kaashyap Radiant, Pentafour

Communications differentiating their offerings and services on the basis of their fee

structure. The medium-term market is well populated with competitive pricing and discounts

to generate



enrollments numbers, a common phenomenon.





However, the most exciting and rapidly evolving is the short-term market, which has also
been well segmented into the Short-term Very Select Market, Short-term Select Market and

Short-term Mass Market. The recent introduction of certification courses from Oracle,

Pentafour, Baan Institute, Nicco Infotech, SQL Star, TULEC and specialized courses from

Bitech and TransEd have created this fast-moving segment. Courses with lower fee structure

from these vendors have created the Short-term Select Market, making them more accessible

to larger number of students. And finally we have the Short-term Mass Market, which like

its counterparts in the Medium and Long-term segments is crowded, competitive and open to

bulk discounts.






Competitive Strategic Positioning: Number And Duration Of Courses


Some amount of vendor differentiation has also been created by the number of courses
offered according to their duration (see page54). Again, for this purpose our thumb rule

of short-, medium- and long-term courses has been adopted. According to the data supplied

by vendors, NIIT appears to be the most prolific in course offerings, followed by Aptech.

However, Aptech has a far larger variety of courses in the medium- and long-term duration

segments. Pentafour Communications and Kaashyap Radiant also have a large number of course

offerings in the medium- and short-term segments. Currently, the industry ratio for the

number of course offerings from long-term to medium-term to short-term is 1:3:4.






Competitive Strategic Positioning: Branding


Other than the above strategic decisions, the emphasis by training vendors on branding is
also significant. According to Ganesh Natarajan, MD Aptech, "We have spun off Arena

Multimedia and Asset International from Aptech to help differentiate their courses."

His organization offers a range of courses from each of these separate brands including

Aptech, the parent brand. Arena Multimedia offers only multimedia-based design and

creative courses, Asset offers only software engineering career courses and Aptech offers

short-term and certification courses. Other strong differentiating strategies adopted by

Aptech includes its e-com@asset course with IBM and its Quick Pro multimedia series of

short-term courses.






Among the new kids on the block, are Calcutta-based Globsyn Technologies, which has
created the TechnoCampus institute brand and the Young Software Manager course brand.

Mumbai-based Tata Infotech has an only 'one' type of course on telecommunications, which

has been designed by Siemens. Chennai-based SSI has created the 'Trilogy 2000' course

brand. Pune-based C-DAC, known for its strong emphasis on R&D has made available a

course on VLSI design, stemming from its core competency and, probably, the only such

course open to direct enrollment. Hyderbad-based World Wide Web Institute offers Certified

Web Master course. Pentafour Communications offers courses stemming from its core

competency in IBM and SGI technologies including e-commerce on the IBM platform and

animation and simulation on the SGI platform. Mumbai-based Concourse Technologies has

adopted a strong competitive thrust toward offering short-term courses. And New

Delhi-based Indian Institute of Hardware Technology offers a course in Robotics, probably

the only one in the country.






Some more differentiation strategies from vendors include course offerings from
Chennai-based TransEd, involving data warehousing, Java and ecommerce with Corba; and

distributed object computing, Java programming, OOAD, OOPM, OOST, JavaBeans, JavaScript

and Java Applets from Chennai-based Kaashayp Radiant. And if you are looking for a

'walk-in and walk-out smarter,' kind, New Delhi-based Koenig offers a multitude of

half-day and one-day courses. For corporate training needs, New Delhi-based Vision 2000

offers off-the-shelf more than a hundred CBT titles from VTC, Virtual Trading, MindQ,

Viagraphics and Sartoga ranging from Rs2,000 to Rs8,000-just what the doctor recommended

for the rainy day.






On a practical note, vendors like NIIT and First Computers are combining their IT
education courses with their business management divisions, creating strong branding

through these multifunctional courses. These include the First Accountant and First

Executive from First Computers and the Swift Program from NIIT using the NIS Sparta

training division.






Proliferating training centers


While the reach of the vendors can be translated into the number of students enrolled, it
can also be translated into the number of training centers available across the country.

The more centers available for a vendor, the more students likely to be enrolled. Looking

at the table of training centers by vendors (page 59), the two majors continue to dominate

over other players with more than 50% share. Similarly, looking at the comparison of major

cities versus other cities, we find that Aptech and NIIT have penetrated very strongly

into the semi-urban part of the country, with 77% of the total centers. In all

possibility, the only training center, one will find in smaller cities, towns and

districts will be NIIT and Aptech.






As far as other vendors are concerned, First Computers appears to have made inroads in the
metros, coming at par with Tata Infotech. Software Solution Integrated (SSI) appears to be

gradually increasing market penetration and Software Technology Group (STG), which was an

early entrant in the training market, continues to be well entrenched in the metros.






With an average share of 60% of training outlets across the entire country, Aptech and
NIIT account for close to 70% of the 700,000 enrollments in 1998-99. Hence, the number of

training outlets cannot be ranked as a singular competitive factor. It needs to be

evaluated in conjunction with other competitive strategies adopted by vendors.






Looking ahead


Unfortunately the story does not end here. In fact, from any perspective it appears to be
just unravelling. NIIT and Aptech continue to their excellent initiatives in online

training through their web-based enrollments and universities. Tata Infotech has a very

powerful alliance with CBT Systems, which it still has to unleash in the domestic market.

And vendors like SSI and Pentafour Communications are beginning to breathe down the necks

of the leading trio. The continuing adoption of information technology in Indian

enterprises and their need for improved competitiveness will fuel the need for quality

professionals well into the future. The training industry today appears to be well set to

capitalize on this huge opportunity.






ARUN SHANKAR


in New Delhi.


Bureau reports from AKILA S in Chennai,


ANUPA VASUDEVAN and


EASWAR SATYAN in Mumbai, ALOKANANDA GHOSH in Calcutta and


N SAILAJA in Hyderabad.