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The success of the Indian IT industry has ensured that the country’s unique

strengths have been recognized worldwide. In the process, we have also set the

benchmark for quality. We have established the success of the offshore model,

and today, many countries want to replicate what India has done. However, it has

also resulted in alarming certain industry players who perceive India as a big

threat. China is often referred to, in this context. What also worries people,

is that countries like China are more integrated into the global economy.

Competition is good, both for the industry as well as customers. Besides, it

brings with it significant opportunity which we have not realized yet. Our share

of the worldwide technology market is still a single digit figure. We need to

look at opportunity both from the current and future perspective. While I think

we are doing a good job of getting ready to deliver on current opportunities,

understanding where the future lies is critical in leapfrogging the value chain.

There are key emerging technologies, some of which will make a huge impact and

will play a key role in this Digital Metamorphosis. So companies need to bet on

these and they need to do it now. This responsibility must be shared between

Indian IT industry majors and technology vendors. The work we are doing in

building skills on .NET in India and specifically in emerging hot opportunity

areas like web services is an example.

What will also help in bringing long term, consistent success as well as

growth, is the development of a large domestic market for IT services. This is

the single biggest advantage, which China has over India today. According to a

Nasscom-Boston Consulting Group study, there is a $500-million e-business

solutions opportunity in China. This not only provides a great base to develop

local skills but also to learn from real life customer scenarios. We need to

ensure that the right infrastructure is being built in India to help develop the

local market. Infrastructure is the key building block here. The work here needs

to be done by the government and leading technology infrastructure players. One

also has to be careful while doing this, as there is tendency to go for the

cheapest solutions, not the best ones. The ‘lowest bidder wins the tender’

syndrome is a major stumbling block in government and public sector companies

and holds back the best and most suitable technology from winning. The

government will need to work with the industry to invest in and improve the

overall IT and telecom infrastructure...a pre-requisite for developing the

domestic market. We have several investments to make, starting with those that

increase the PC penetration, create solutions in local languages, improve the

Internet backbone and increase broadband penetration.

Our strong academic roots and the large numbers of technical professionals

have helped us with a skill base, which is a unique strength. We must ensure we

keep up our achievements on this front.

Focusing on emerging new technologies is important. Take for example, the

area of Web services. According to Gartner, by 2003, more than 40% of all

Internet-oriented interactions will leverage Web components from multiple

enterprises, and, by 2004, Web services will dominate the deployment of new

application solutions for Fortune 2000 companies. We need to build our skills

now and help create next generation XML-enabled Web apps.

To achieve the high goals, which the IT industry has set for itself, the role

that a proactive and progressive government can play can never be overstated.

The government-industry partnership, facilitated significantly by Nasscom, has

played a key role in the Indian software industry’s success story. Having a

single ministry for IT and telecom is a good thing. Sincere efforts by the

government in improving the national telecom and information networks have and

will continue to help.

We know our strengths. We understand our weaknesses. We also have an idea

about the threats. The winning strategy lies in focusing the hardest on

opportunity. And as far as China is concerned, it is one of the biggest IT

markets in the world. So, we could start by trying to leverage on the

opportunity in the land of the dragon!

The author is managing director Microsoft Corporation India