Training & Education: On the Recovery Path

Have you witnessed the recent NIIT ad on TV that shows IT recruiters

kidnapping a GNIIT student-the underlying message being that in times of acute

manpower shortage in the IT industry, it's GNIIT students who are the most

sought after. Well, there might be arguments on the merits or demerits of a

GNIIT student, but, more importantly, an ad on prime time TV indicates the

positive and healthy vibes emanating from the Indian IT training industry.

Numbers too support this hypothesis: from FY 2001-02 till FY 2003-04, the

training sector revenues consistently went down; subsequently, there was a

turnaround last year when the industry recorded a 10% growth, and in FY 2005-06,

this was further consolidated through a 14% growth as the training market size

was pegged at Rs 1,453 crore. True, it might take ages for the industry to again

touch the 2000-01 zenith of Rs 2,594 crore, but the last fiscal did prove to be

healthy for the Indian IT training players, albeit in a market where dynamics

have changed drastically from what they used to be five years back.

Chinese Led Exports Up



Nothing signified these changing dynamics better than the growth in exports

revenue achieved by the training sector in FY 2005-06. At Rs 436 crore, it was a

significant 56% jump over the previous year-if exports revenue in corporate

training recorded an impressive 50% growth, the individual segment growth in

exports shone even brighter with a whopping 84%. While the industry only gloats

over exports successes for software services, it seems the Indian IT training

sector too is flying high on foreign shores. Both NIIT and Aptech, the two

leading players of the sector, achieved significant success abroad, and that too

across diverse geographies. Interestingly, like the software services players,

NIIT and Aptech both seem to have identified the Chinese dragon as the elevator

to success in their sojourns abroad. In fact, for Aptech, its individual

training revenue from China even exceeded that from India by more than Rs 10

crore; this makes China the new El Dorado for India's recovering IT training

sector.

A look at the Top 5 IT training players in China for FY 2005-06 establishes

the Indian hegemony: according to a CCID report, while Aptech with 18.8% market

share led the pack, it was followed by the Chinese Academy of Science (CAS)

(with 9.6%), NIIT (7.9%), China Digital (3.8%) and East Software, Dongruan

(3.4%). In China, Aptech had a 50:50 joint venture with a Chinese company Jade

Bird, in which Beijing University had a stake too. It runs over 200 training

centers spread across 57 Chinese cities. NIIT also consolidated its position in

China by partnering with a provincial government to train 200,000 students over

the next five years; it also established a Practice Base in Changsha Software

Park. In 2005-06, NIIT had over 100 education centers dotting 25 provinces in

China, forging partnership with local companies, over 20 leading universities

and three software technology parks.

Though China has been at the forefront of their forays abroad, Indian players

looked at other destinations too during the year. NIIT forged a strategic

academic alliance with UK's largest university, the Open University, to offer

its degree program-BSc (Honours) Computing and its Practice-to students in

six countries across Africa, South East Asia and the sub-continent. In FY

2005-06, NIIT's education programs were available in Mandarin, Russian,

Spanish, French and Arabic, apart from English. While China was the pillar of

Aptech's overseas success in FY 2005-06, it also entered new countries like

Vietnam, Nigeria, Turkey and Yemen during the year; new international centers

were also planned in Mexico, Syria, Afghanistan and Lebanon. Even niche

multimedia training players like Maya Academy of Advanced Cinematics (MAAC)

forayed abroad to places like London, Dubai, Mauritius and Singapore during the

year. 

However, exports growth was not only confined to classroom-based training,

but e-learning solutions through CBTs or Web-based courses also contributed a

big chunk of it. NIIT addressed the complete spectrum of e-learning activities,

like learning content, design and development, development and integration of

learning technology tools, hosted solutions and learner support services. Its

range of offerings in the e-learning domain was bolstered by its SEI CMM Level 5

assessed Knowledge Solutions Business (KSB), which during the year more than

doubled its number of technology customers, adding names like Google, Computer

Associates, BEA Systems and Symantec. This resulted in a 50% increase in

business derived from the technology training domain.

Aptech too provided e-learning solutions for four large clients in the US and

another 15 smaller ones, primarily through its delivery centers in Mumbai,

Chennai and Pune. However, the leader in e-learning exports during the year was

the Rs 98 crore Tata Interactive Systems (TIS) which developed learning

solutions for a galaxy of clients like British Airways, GE, P&G, UPS,

McGraw-Hill, Dept of Works & Personnel, the UK as well as Phoenix University

amongst others. TIS was also providing consulting services on the e-learning

front to organizations like North West Airlines and institutes like Corinthian

University. Other players like Hurix and LionBridge gained substantially on the

overseas e-learning front during the year.

Corporate Training Booster



If exports were one extraordinary success story for the Indian IT training

industry in FY 2005-06, the other boost came from increasing gains from

corporate and institutional training. Revenues from corporate training witnessed

an impressive 47% upswing; in comparison, individual training revenues fell by

5%. In between these lines, hides the story of the changing dynamics of the

Indian IT training industry where corporate training is becoming more important

than individual retail business. NIIT and Aptech showed the way here again,

though smaller players like SQL Star, karRox and Pragati Software did get some

business.

For NIIT, corporate/institutional training accounted for 63% of its net

revenues of Rs 450 crore; its European subsidiary became operational even as it

bagged the first training outsourcing order from a European electronics major.

It launched its new product, eGuru, for corporates. The partnership with Intel

and SBI bore fruit while on the government front it managed to win new contracts

from Assam, Himachal Pradesh, Chattisgarh and Tripura. Aptech, on the other

hand, bagged large contracts from Indian Oil, GAIL, NTPC and Indian Railways.

For corporates, Aptech ventured beyond IT and offered training in soft skills in

retail and BFSI. It offered mutual fund trainings to Mahindra Finance and UTI,

while for a large retail client the company set up four dedicated centers in

four different cities. Recently, it forayed into aviation too in partnership

with Avalon Academy.

Individual Training: Changing Colors



Though individual retail training numbers have dwindled, it still accounted

for a bulk of the revenues for all major players. In metros the demand was more

for short term specialized courses, while students in B and C class cities

preferred long-term career courses. NIIT's multiple-track GNIIT program for IT

career aspirants continued to drive the company's revenues inÂ

2005-06. The program, “co-designed” with the IT and BPO industry,

ensured an 18% growth in the placement of GNIIT students. Aptech also introduced

its new career courses with one-year internship-in a year it proclaimed as

“Year of Placement” these found takers especially in the smaller cities.

Higher demand was for shorter courses like the ones Aptech offered under the

SSI brand, on technologies like C++, Java and .NET. Its online semester exam

programs for Symbiosis and Wellingkars too gained popularity, encouraging the

company to also offer TOEFL exams. NIIT too launched a range of specialized,

fast-track education programs for engineering and IT students-not only did

these provide curriculum support and enhanced skills in new technologies, but

also global certifications from IT vendors under the brand umbrella of “NIIT

Edgeineer”. ANIIT, a special accelerated program for engineering students,

enabled them to gain employment in major IT organizations, through NIIT's

National Placement Network and Industry Alliances.

As corporate training picked up, companies launched new packages and activity tied-up with business and state government

One area in retail individual training that saw good growth during FY 2005-06

was multimedia. Though the Aptechs and NIITs provided multimedia as part of

their total bouquet, it was the niche players like MAAC and Zee Institute of

Creative Arts (ZICA) which scored there, mainly due to their ability to make

students work in live environments in their own studios. With the animation and

visual effects industry witnessing a boom in the country leading to acute

shortage of skilled manpower, these institutes offered courses in all facets of

pre- and post-production techniques. Apptech, too followed suit with its one

year Arena courses now offering live training in studios besides interaction

with the entertainment industry.

While the multimedia boom riding on the animation/VFX wave was

understandable, good old hardware training still retained its niche, healthy

position. Probably with managed services becoming mainstream for Indian

enterprises, there were more demand for hardware and networking engineers and,

consequently, institutes like Jetking and CMS Computers thrived. Jetking's

popular JCHNP program prospered with 22,501 enrolling this year against 16,489

last year. Jetking was present in 73 centers across 52 cities in India with 15

new centers added in FY 2005-06. On the hardware front, there was a growing

trend of students opting for certifications like CCNA (Cisco Certified Network

Administrator), RHCE (Red Hat Certified Engineer) and  CWNA ( Certified Wireless Network Administrator). CMS

leveraged its SI expertise to offer its students internship in live situations

at its client premises.

Rajneesh De



rajneeshd@cybermedia.co.in