New Convergence Horizons

How telecom, software and consumer electronics will together transform the
tech industry

Preparing for convergence is not an option; it is an imperative for the industry as the world braces itself for one more cataclysmic change

Car horns blared all over the city and ships and boats on the lake tooted
their whistles and horns as well to join in the overall celebration that lasted
till the wee hours of the morning! New Year’s Day celebrations in an Indian
metro—not at all, this was the festive mood in the last week of June in
Lausanne Switzerland as a nation rejoiced at the unceremonious exit of England
from the Euro Football tournament. Contrast this to the mood in a London pub
just three days earlier when the same team had completed a comprehensive win
over Croatia and the pubs in Central London nearly ran out of their beer and ale

Nothing unifies each country in Europe like football and paradoxically
enough, nothing brings out the sharp contrasts between the European Union
nations like football. The EU nations and people are so similar in so many
respects that many of us software marketers could well be lulled into a sense of
optimism as unified Europe emerges but all of us, particularly the smaller
companies, would do well to remember the differences which make Europe such an
interesting and challenging market. What works in the UK can work with some
tweaking in Sweden, Denmark, Finland Norway, Holland, Belgium, Luxemburg. The
approach to market has to be completely revisited in France and the DACH regions—Germany,
Austria and Switzerland. Small wonder then that most companies who have had some
success in the Continent have set up a different group to address their business
opportunities in this part of Europe.

What also fascinated me during a recent whistle stop tour of Europe was the
speed at which the Eastern European nations are positioning themselves as low
cost applications development and maintenance partners to their well-heeled
Western European brethren. Ireland and Wales are already entrenching themselves
as worthy offshore partners for American companies and Poland, Hungary, Russia
and the Czech Republic have found early opportunities for placing people on
projects and will soon “do an India” by setting up proper offshore (or
should we say same shore off site?) centres in their countries.

The other fascinating trend that has crept upon us almost stealthily is the
rapid convergence of IT, telecommunications and consumer electronics which was
talked about ten years ago but is only today establishing itself in almost every
market. Some of us who were laggards in adopting Personal Digital Assistants (PDAs)
and digital cameras can gloat in hindsight about our wisdom because every mobile
phone of the future will provide all these capabilities. A June issue of
Business Week carried a fascinating article about how convergence is
transforming the tech industry, talks about the collision of three massive
industries, the $2.2 trillion communications industry, the $1.1 trillion
computer and software business and the $225 billion consumer electronics sector
and points to the fact that all the global powerhouses such as IBM, HP,
Microsoft and Samsung and even some lesser known players are crafting new
strategies for convergence.

What does the rapid emergence and institutionalization of convergence
technologies mean to all of us in India? For one, industry leaders like
Reliance, Bharti, Wipro and the Tatas should focus on convergence technologies
and come up with low cost solutions that could not only find vast applications
in urban and rural India but develop into a new export opportunity that could be
many orders of magnitude larger than software exports. Governments who have been
vying with each other to build bigger and better STPs could provide both the
infrastructure and the incentives for convergence technology startups which
could also provide the much needed boost to the hardware sector.

Back to the football analogy and in a recent CEOs conference, Harsh Goenka,
Chairman of the 1.6 billion US dollar RPG group likened the emerging business
climate as the difference between playing soccer on Astroturf and the old muddy
fields. The ball moves faster, the time for maneuvering is less and the game is
only for the extremely fit. The Software exports business and indeed the entire
IT industry needs to be prepared for the new game and continue to win in the new
ball park!

The author is deputy chairman & managing director of Zensar
Technologies and chairman of Nasscom’s SME Forum for Western India Ganesh

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