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Three Technology Trends

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DQI Bureau
New Update

SANJAY KUMAR, PRESIDENT

AND COO, COMPUTER ASSOCIATES INTERNATIONAL

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These are exciting times

in the evolution of the Indian software industry. Just recently, software revenues for

India exceeded $ 1 billion a year, a threshold that till a few years ago many analysts in

India had put into the next Millennium. Clearly, the accomplishments of the Indian

software industry have earned it a new level of respect and admiration throughout the

world. Now the big question is how can India capitalize on its successes, thrive in a

world of feverish competition, and emerge as an undisputed global leader in every aspect

of IT?

align="right" hspace="0" width="136" height="227">My take on this question focuses on

three critical success factors that underscore the most successful IT economies.

Understanding where IT is headed is becoming harder, not easier. But the global trends,

that reward those who are willing to take big risks for big rewards and accept stewardship

of the technology entrusted to them, are relatively well defined. The theme that unifies

the three trends, that follow is how technology itself often takes a back seat to more

fundamental decisions such as definition of markets, tolerance of risk, and the beneficial

role of technology in the greater society.

Theme 1: Look To The

Value Chain




I think we can agree that crossing $ 1 billion in revenues for the first time is a
milestone. But India must ask itself why it took the industry so long, given the

substantial number of outstanding software professionals who have contributed to the

software sector.

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The simple answer is that

there have been a number of factors limiting the size of the software industry in India.

Traditionally, the industry was driven by a range of activities that can be characterized

as reactive, externally-focused, low-risk, and component-based. Till very recently, a vast

bulk of the Indian software industry's revenues were derived from activities such as

component development, custom software programming, contract programming, and providing

support for the third-party software. This work is important and contributes to the

economy. But as the majority of the risk and real value are added elsewhere, the majority

of the profits (if any) are extracted elsewhere, as well.

If India is to take its proper

place in the world economy, it must take on more of the high-value activities that are

rewarded by the emerging knowledge-based global economy. The country especially needs to

do more software R&D, more software design, as well as more complete product

life-cycle work. Investments and partnerships in India by Computer Associates and others

will help move the country forward on this path, but it must not entirely rely on foreign

investments.

I believe the Indian software

industry must make a fundamental shift from focusing on external work-adding value to

products developed outside-to emphasizing work on products designed and developed within

the country. It is by controlling the value chain that the Indian software industry will

find its greatest reward.

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Theme 2: With Limited

Risks, Come Limited Rewards




The Indian software industry needs to accept a new risk-reward paradigm. It is true that
as long as the software industry accepts only work that is conservative, stable, and

predictable, the risks are going to be acceptable. However, what is also true is that the

rewards too are going to be limited. There is no way around this basic tradeoff. If the

industry wants the rewards that the global economy offers its winners, it must also be

prepared to take on the risks that the economy places on its losers. The industry must

face squarely the institutional and cultural impediments that have historically penalized

high-risk commercial initiatives. Many of these impediments have been and are being

dismantled. But the biggest obstacle can be the universal human nature of resisting

change. When the day is done, the choice to take on a new mindset about risk is an

individual decision that everyone in the software industry needs to take on at an

individual level.

Fortunately, the lessons

learnt by software professionals across the world offer clues about maximizing

opportunities while minimizing risks. I encourage the software industry in India to be

adroit students of which strategies have worked and which have failed. From my experience,

reward of the global economy will be driven by the following activities.

VALUE-ORIENTED

COMPONENT WORK:
Today's software is built from many components assembled together

to create large products. India's software industry is uniquely qualified to take on the

challenges of designing these components, adding real value, and integrating them into

cohesive products.

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COMPLETE PRODUCT CYCLE

WORK:
Given the technical resources available, Computer Associates as well as

many other companies are bringing complete product life-cycle work to India. Getting

experience in this area is critical if the Indian software industry is to take the next

step up the software value chain.

EMPHASIS ON THE

ENTREPRENEUR:
India needs to be better represented among the ranks of technical

innovators and business leaders who are comfortable with extending their dreams and taking

risks. Another term for such people is entrepreneurs.

THINK GLOBALLY, ACT

GLOBALLY:
The experience of adding value to software designed elsewhere is good

for India, but it is only one step. The ultimate goal, of course, is for Indian

entrepreneurs to originate such work in the country and then contract with partners,

perhaps in the US or Europe, to add value.

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Internet/intranet/multimedia:

These areas represent tremendous opportunities for careers that will be highly paid and

richly rewarding. These technologies are the fast tracks to the next millennium. That's

where the future is and, with my Computer Associates' investment in India, that's the

direction we hope the software industry here will too go. The result will be a much higher

reward in exchange for a little more risk.

Theme 3: Giving Back



I believe now is the time for the Indian software industry to start thinking about how IT
can be made to serve society in the broadest scope possible. I am talking about accepting

our role as stewards of the information revolution and I would encourage everyone

connected with the industry to consider how you can return a portion of what you have

earned to those less blessed, less powerful, and less connected.

If India benefits, as I know

it will, from the enormous investments and opportunities now being presented, there are no

limits to what it can accomplish. There has never in the history been a force like IT to

empower people and to make the world a better place to live in. The software industry in

the next millennium will flourish careers and make fortunes. The lives of everyone

connected to the Indian software industry will be improved.

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I am convinced that we have it

within our power to use our skills to make unprecedented contributions to the societies in

which we operate. Let me close by describing just two ways Computer Associates has found

it can leverage what we do best-software-to improve the lives of children across the

world.

The company does extensive

work for the National Center for Missing and Exploited Children, a non-profit

organization, dedicated to locating children who have been abducted or otherwise separated

from their legal guardians. Our work includes developing and hosting the organization's

web site and championing its cause internationally. Computer Associates is also involved

with the Save A Smile Foundation, which sends doctors and nurses in different parts of the

world to repair cleft palates and other facial deformities. The company is currently

working to equip a train which will travel across China and give medical assistance to the

needy children in remote towns and villages in the country.

These initiatives are

representative of the kinds of social needs that the Indian software industry will find in

abundance. While the information revolution will be good for the professionals working in

the software industry, it also needs to serve mankind in a larger way. If you are going to

be stewards of the information revolution, I encourage you to pursue two broad goals.

First, pursue the business opportunities in technology-which are unlimited. Second, I

encourage you to acknowledge the needs that India has, needs that can be uniquely

addressed by the same set of IT skills and work ethics that have brought the country

recognition and admiration throughout the world.

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