New Convergence Horizons

How telecom, software and consumer electronics will together transform the

tech industry

Ganesh Natarajan 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

stock!

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

Natarajan