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 No of certified centers
Autodesk 93
Microsoft 79
Novell 37
Lotus Development Corp 22
Sun-Java Center 22
IBM ACE 21
IBM AS/400 Training Center 20
IBM e-Business Training
Center
15
Oracle Education 16
Baan 5
Total 330


Vendor Certification Numbers

Vendor No of certifications
Microsoft 83,000
Oracle 10,350
IBM 8,017
Autodesk 8,000*
Lotus Development Corp 6,000*
Novell 5,000*
Cisco 600
Total 120,967

*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.

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