Rock Solid

He has single-handedly led a nascent organization to a state

of maturity, and transformed it into a corporate entity. He has spearheaded the

institutionalization of the apex body of the Indian software industry. He has

been the advocate of the software and IT services industry in the West, and has

made the Indian lobby stronger than ever. He is none other than Kiran Karnik,

president of Nasscom. Therefore, there was very little surprise when the

Dataquest Awards jury comprising of S Ramadorai of TCS, Dr DB Phatak of IIT

Bombay, Deepak Ghaisas of i-flex Solutions, PK Vohra of ICICI Bank, Lalit

Sawhney, president, CSI, K Jaishankar of Ingram Micro (Tech Pacific), Neelam

Dhawan of Microsoft India, and Pradeep Gupta of CyberMedia unanimously chose

Kiran Karnik as the Person of the Year, 2005.

The Journey



Kiran Karnik's professional stint at the Indian Space
Research Organization (ISRO) spanned 20 years. He held various posts associated

conception, planning, and implementation of applications of space technology,

focusing especially on the use of communications for development. His pioneering

work in the Kheda communications project won him wide national and international

acclaim, including the first Unesco-IPDC prize for rural communication.

That is not the only one. Karnik has many firsts to his

credit. He was a key member of the India-USA Satellite Instructional TV

Experiment (SITE), the first large-scale use of direct broadcasting in 1975-76,

which took education and development to remote parts of rural India. In 1998,

Karnik was awarded the Frank Malina medal for Space Education by the

International Astronautical Federation.

Date Of Birth: March 16, 1947 Education: A post-graduate from the Indian Institute of Management, Ahmedabad. Holds an honors degree in Physics from Bombay University. Career: Karnik has worked for over 20 years at the Indian Space Research Organization (ISRO), where he held various positions including that of a Founder-Director of ISRO's Development and Educational Communicational Unit. In 1991, Karnik joined the Consortium for Educational Communication (CEC) as its first Director. He also served as Special Assistant to the Secretary-General of UNISPACE 82 and has done an extended consulting assignment for UNESCO in Afghanistan. He has been a consultant for WHO, The World Bank, UN Institute for Disarmament Research and Ford Foundation. Karnik has been involved with many government committees, including the Prasar Bharati Review Committee. He has a deep involvement with a number of NGOs in the areas of education and environment, and currently is Chairman of the National Foundation of India. Prior to joining Nasscom, Karnik was the managing director at Discovery Networks in India where he spearheaded the launch of the Discovery Channel in South Asia in August 1995 and Animal Planet (a Discovery-BBC joint venture) in 1999. As president of Nasscom, Karnik works closely with the industry, members and the Indian Central and State governments to formulate policies and strategies for the advancement of this sector, locally as well as internationally. His key function is to build global brand equity for the Indian software and services industry. Achievements & Recognition: Karnik has been the guiding force for the Indian IT industry during the outsourcing backlash. By providing perspective and background information, he has been instrumental in promoting India's technology strength to the world. To fuel growth in the domestic market, Karnik has lobbied with the government to announce tariff cuts on computer hardware. BusinessWeek recently named Kiran Karnik as one of the 'Stars of Asia.' He was also selected as Forbes magazine's 'Face of the Year 2003,' for being a driving force behind India's offshoring wave. In 1998, The International Astronautical Federation awarded Karnik with the Frank Malina medal for Space Education. His deep involvement in the Kheda Communications Project, won wide national and international acclaim, including the first UNESCO-IPDC Prize for Rural Communication

Building Up the Institution



To some, Karnik would the IT industry. Not quite, if you ask

the man himself. "I was familiar with the industry, thanks to my 20-year

stint at ISRO."

But that was not enough. Not quite. "I knew about the

dynamics of the IT industry, but not the industry leaders," says Karnik.

Two, the industry was more volatile than ever in 2001 when Karnik took over

(think 9/11, dotcom bust and global recession). Third, stepping into the shoes

of late Dewang Mehta, who was a much larger brand than Nasscom itself. Karnik,

however, defends this argument. "It is good for the future of an

association if the leader stands taller than the entity itself, in the initial

years," argues Karnik.

The industry's mandate was to professionalize and

corporatize Nasscom, and Karnik started work on this front right from the word

go. Karnik strengthened Nasscom's functionally and decentralized its

operations. He also helped strengthen Nasscom's regional presence.

The Anti-offshoring Wave



Karnik spearheaded India's stand against the
anti-outsourcing lobby in the US. His case: The US economy gets $2 for every $1

that American companies spend on outsourcing in India. Indian companies buy the

US hardware and software, Indian tech workers spend wages in the US and pay

taxes there, and US consumers save through lower costs at companies.

Karnik and his lieutenants have criss-crossed the US, trying

to persuade legislators and unions that bills curbing outsourcing are bad

policy. At the same time, Karnik lobbied with Nasscom members to hire in the

West.

The result: The message of mutual benefit has sunk in; so

far, no state has passed a law against government work being shipped overseas.

Says Karnik, "There is better understanding and the debate is far more

balanced now." A positive sign is that the debate, which would continue to

be there at least for a while now, as Karnik admits, is a matured one and has

moved ahead from an emotional to a rational platform.

A big respite comes from the UK, of course, for Karnik and

team, which has taken a more practical approach to the outsourcing chapter. The

Tony Blair government prefers to approach the issue from a business standpoint

and has been more than vocal about it. Says Karnik, "We support this

approach and are advocating this to the governments of both the US and Europe.

Towards a Complete Ecosystem



Kiran Karnik has spent the first five years at Nasscom
essentially nurturing the organization, taking the Indian IT industry to global

heights, and fighting the anti-outsourcing brigade. While the last issue still

remains a sore point for the industry and would continue to be in the near

future, Karnik is now addressing some of the other hurdles the industry is faced

with in his efforts to build a complete ecosystem.

Human resource is a key concern today: demand is higher than

supply, and excellent quality manpower is still a problem. "Our existing

education system does not facilitate adequate supply of truly world-class

manpower," laments Karnik.

Today, only 20% of skilled professionals, on an average, are

truly excellent. Says Karnik, "We need more MTechs and PhDs to move up the

value chain." Team Karnik is talking to the government to increase the

number of colleges or institutes of the standard of the IITs. But that, of

course, seems remotely possible, as the government does not have adequate funds

to create institutions of the same class. The next option is to privatize

education and invite private investments in the education sector. "If the

government has no problems privatizing primary and secondary education, which is

by far a basic requirement, then I do not see any problem in privatizing higher

education." Nasscom has initiated talks in this direction with the

government. ""Privatization is absolutely critical for the knowledge

industry." But, any step towards this means a near social revolution, and

such revolutions do not happen in just a day. Karnik understands that

completely. The political fallout of such initiatives is also a challenge as far

any policy-driven initiative in the same direction is concerned.

Worried about keeping India's HR advantage intact, Nasscom,

along with several Indian technology majors, began collaborating with the

academia to bring fresh engineering graduates, especially those in Tier II

cities, up to the mark. This initiative, started in 2004, is called IT Workforce

Development (ITWD). As part of the ITWD, Nasscom started faculty development and

mentorship of institute programs, focused actively on creating industry-ready IT

and ITeS talent. It also signed an MoU with the University Grants Commission and

the All India Council for Technical Education. Several industry-academia

workshops with leading technical universities across India, particularly in Tier

II and Tier III cities, have also been held. Nasscom's ITWD Forum comprises 35

IT companies including BirlaSoft, Computer Associates, Infosys, and ITC Infotech.

These companies have all been working with regional institutions.

Initiatives are also being taken to strengthen and

consolidate the domestic software industry. Today, everyone realizes the need to

go beyond software exports and concentrate on the domestic market in order to

create a strong and vibrant IT industry in the country. Karnik admits that

Nasscom has not been active on the domestic market front, but is seeing to it

that significant initiatives are taken to change the situation. He has already

pushed the Indian government to cut tariffs on computer hardware. Nasscom has

also established the Domestic Market Forum two months back, which is being

chaired by TCS CEO, and Person of the Year, 2004, S Ramadorai, and features

industry stalwarts like B Ramalinga Raju of Satyam, N Lakshmi Narayanan of

Cognizant, Pramod Bhasin of Genpact, Shanker Annaswamy of IBM, and Deepak

Ghaisas of i-flex, to name a few.

Last, but not the least, is Nasscom's ongoing efforts to

boost cyber security—data security, especially in the BPO context. Nasscom

launched the Security Forum in February 2004, under the chairmanship of Jerry

Rao of MphasiS BFL, who is also a member of the Domestic Marker Forum. Last

October, the association hosted the first ever India-US information security

summit titled 'India and the US: Protecting the critical information

infrastructure alliance', in New Delhi.

Endorsing Innovation



In its efforts to promote entrepreneurship, Karnik along with

Nasscom showcased emerging product companies, for the first time, and

felicitated them for their innovative work, at the Annual Nasscom Summit, in

February this year. Currently, Nasscom is shortlisting companies from across

regions, in the same category, for the next annual summit in 2006. Says Karnik,

"The creativity is there. We need to provide the supporting

ecosystem." Which would involve ensuring that these companies get the seed

capital to convert their innovation into a viable business proposition;

providing these entrepreneurs with adequate incubation facility; giving these

technical minds an exposure to marketing and business; helping them develop good

communication skills so that they are in a position to communicate their idea in

an appropriate manner so as to attract interest and attention; and address their

long term concerns like helping them create IP by creating an environment that

would be conducive to filing patents.

In order to boost the pioneering spirit within the Indian ICT

industry, Nasscom is looking at a host of strategies that will put in place a

culture of innovation and creativity. The organization is mooting the idea of an

"Innovation Fund" that will include contributions from the ICT

industry and the government.

Nasscom has also suggested the creation of a "Patent

Fund" to support smaller companies that are unable to patent their

innovations for want of funding and expertise. Today, it typically takes around

Rs 5-10 lakh to file an application for a patent. However, with support from the

government and legal help, this cost could come down substantially. Says Karnik,

"I have even suggested the government to give a loan for an innovation and

convert it into a grant, if the idea gets converted into a patent."

Across the Value Chain



Karnik is excited about the days ahead. At the close of last
fiscal, exports, both the IT software and services and BPO, grew at a pace far

higher than projected. Opportunities are coming from newer geographies beyond

the US like UK, Australia, Japan and other emerging markets including Korea,

Vietnam, Singapore etc. While the US continues to be the primary export market,

Indian vendors have started focusing on other emerging markets as well, as part

of a conscious strategy to de-risk the revenue model by reducing their

dependence on the US market. Says Karnik, "I see exciting times ahead for

me as well as Nasscom." Nasscom has beefed up delegate visits to these

markets and Karnik is himself leading some of these trips.

Karnik also sees newer export opportunities emerging from

product engineering, engineering design, animation and games, in addition to

existing ones like remote infrastructure management and high-end BPO work (read

KPO).

In addition, cities like Kolkata, Pune, Kochi, Trivandrum,

Jaipur, Coimbatore and Mysore have emerged as hot IT destinations in the last

couple of years. After offices in Hyderabad and Pune, Nasscom is now considering

setting up an office in Kolkata, and has also beefed up its promotional

activities in these new hot, domestic destinations.

Piracy Pangs



While things look hunky dory, Karnik is not without some

nagging worries. Piracy remains a painpoint with no constructive solution in

sight, yet. "Enforcement is just tying one end of the problem. What about

reducing the price differential?," questions Karnik. The concerned parties

will have to address the price issue. Piracy is also low on the criminal offense

list. Karnik and team are talking to the government to set up special IPR courts

so that the judiciary, as well as the entire enforcement system, can be

streamlined.

The Road Ahead



"There is so much to be done and so little time."

Stress is definitely not a deterrent for the 58-year-old Karnik whose yearly

itinerary is packed with extensive travel plans, both domestic and

international. Does this hectic schedule take a toll on his health?

"No," comes the prompt reply from the unfazed Karnik, "The two

things that worry me are work backlog and lack of time to be creative."

While reactive work is possible and gets taken care of, its proactive creativity

that takes a hit.

Karnik has authored a large number of publications in the

past. When he's not working he would prefer to read. Writing has taken a

backseat for the time being. He would resume that when he has more time to spend

on himself. But that is not likely to happen for some time now. Karnik is now

busy working towards his vision for Nasscom-to enable a perfect ecosystem for

the software and IT services industry, that would include policies, creation of

a vibrant domestic and export software industry, and strengthening of the Indian

lobby in foreign geographies.

Kiran Karnik's contribution to the Indian software industry

is undeniable. He has led from the front while fighting the outsourcing backlash

and given the software industry a fresh lease of life. Sums up S Ramadorai,

chairman of the awards panel: "Kiran Karnik has relentlessly championed

India's case in the outsourcing backlash debate and has lent his support to

the software services industry to thwart one of the biggest challenges

ever."

Bhaswati Chakravorty