Training : Learning in Tough Times

The Dow Jones industrial average fell by 778 points, the BSE-Sensex crashed
by 2,000 points; all in a single days tradingthe financial meltdown of FY 09
which is still continuing in FY 10 has started looking even worse than the
Great Depression of the 30s. To add to the grim scenario, Indian IT companies
have joined their global counterparts in laying off employees. In such an
environment of foreboding and apprehension, the last thing you would expect is
for the IT training market to grow.

But surprise of all surprises, the Indian IT education market (private sector
only consisting of IT training and e-learning exports) has grown by 13% to reach
Rs 3,827 crore in FY 09, up from Rs 3,393 crore in the previous fiscal. Even
though the figures may not seem impressive at the first look, the truth of the
matter is that in the recessionary phasewhen most companies are downsizing and
training is, therefore, last on the priority lista double-digit growth calls
for celebration.

CyberMedia Research  DQ Estimates

Most companies were downsizing, and training was the last thing on their priority list. That the IT training market still grew, was largely due to the initiatives in the public education sector and a rival in individual training market

Corporate: Not Alls Lost

The corporate training market also grew 11%, the reason could be that demand
for on-site deployment of certified training resources far outweighs the number
of layoffs. Unlike the US, even those who were handed pink slips were getting
re-employed sooner than latter. Notwithstanding the slowdown, Nasscom predicts
that by 2010, the Indian software industry alone would require 2.3 mn
professionals, and based on the current supply there is likely to be a shortfall
of half a million. Perhaps thats why most Indian IT companies still invested in
certification and training, albeit on a selective basis.

Much of this corporate training is in the form of e-learningthe two often
get intertwined in many cases. NIIT, the undisputed leader in IT education, grew
by 61% in the last fiscal with a special focus on e-learning. This was because
most companies were wary of spending on on-site training, owing to increasing
costs on trainer and facility arrangement. In the last fiscal, NIIT clocked Rs
578 crore in corporate training, inking major deals with the Indian Army and
also the Ministry of Social Justice and Empowerment. In fact, unlike previous
years when it was largely enterprise-driven, the fillip to corporate IT training
came in FY 09 from the governments increasing emphasis on employability
training.

Aptech too bagged training orders from a non-banking financial institution,
the BPO division of a large software company, and an insurance firm. It further
renewed contracts with three large BFSI clients apart from a UN agency and a
leading BPO company.

CyberMedia Research DQ Estimates

Individual training seems to have got a second lease of lifecourses on infrastructure management, animation and major technologies from the likes of Cisco, EMC, Microsoft, Red Hat as well as training programs under various ministries were the elixir. Aggressive branding of programs like GNIIT also helped. Corporate training was largely driven by e-learning

Acquisitions too helped: NIIT acquired controlling stake in Evolv Services (a
leading provider of English language and communication training); Aptech
acquired English language training business of Bengaluru based First English
Education Institutes Limited (FEEIL), taking over the operations of four centers
(located at Koramangala, Banshankari, Mathikere, and Rajajinagar).

Individual: Still Relevant

Cynics continued running down the individual training segment, citing global
meltdown as the cause of declining employment opportunities in the IT sector,
therefore leading to IT training losing relevance. The sector, however, held its
own and grew by 15%. It was once again NIIT (almost synonymous with individual
training) that not just contributed the lions share (Rs 431 crore) but also
helped sustain the market.

During FY 09, NIIT saw over 4,38,000 enrollments, a growth of 13% over the
previous year. It added around fifty education centers, taking the total number
of NIIT education centers to around 11,000 by March 2009. This growth can be
attributed to a slew of job-ready career courses and its flagship program, GNIIT.
The aggressive brand campaigns for GNIIT on the electronic media seem to have
paid off. Incidentally, GNIIT alone contributed a student registration intake of
20,000.

In addition, NIIT also tied up with Microsoft earlier this year for making
available Microsoft certified professionals. As part of the program, GNIIT
students appear for relevant Microsoft certification examinations. In the first
phase itself, over 9,000 students were trained using Microsofts learning
content, while in the first batch, 170 Microsoft Certified GNIITians were made
available for industry absorption. The company also partnered with leading
organizations like Wipro, HCL, and IBM for placement assistance.

With the business environment getting tougher by mid-year, NIIT responded to
the changing market dynamics by launching intensive technology programs to make
graduates job-ready in ninety-nine days. Incidentally, the initiative was also
acknowledged by the recent Neilsen-Week Survey as being amongst the best
short-duration job ready courses in the country.

Infrastructure management appeared to be the next growth frontier for most
training majors. With the Nasscom-McKinsey report forecasting that India is
strongly positioned to capture up to $15 bn of the global remote infrastructure
management market over the next four years, the demand for experienced workforce
with highly specialized skill-sets was bound to go up.

Not to miss the bus, training companies like NIIT and Jetking started
offering infrastructure management courses. NIIT brought together global
technology giants Cisco, CompTIA, EMC, Microsoft, and Sun to co-design GNIIT (IMS)
program. In addition, short duration, specialization programs, as well as a BSc
(ITIM) from Kuvempu University were also part of the program.

NIITs IMS course is currently being offered in 129 centers out of which over
forty centers offered it on Cisco technologies. In FY 09, NIIT trained over
3,000 students in Cisco and over 5,000 students in storage technology using EMC.
IMS students later got placements in companies like Aricent, Wipro, HCL, IBM,
and NetEnrich.

Besides the flagship three-year GNIIT (IMS) program for aspiring college
students, NIIT is also looking to tap working professionals and engineering
students in the IMS space by offering nine to thirteen month certification
mapped programs on technologies like networking, storage management, server
management, desktop, and application management.

Jetking also forayed into IMS space by launching Masters in networking
administration.

As per Nasscom estimates, out of 5 lakh plus engineering passouts a year,
only 25% are considered employable owing to the outdated curriculum. With this
is mind, Aptech took the lead with its Aptech for Engineers, a slew of
specialized IT courses for engineering students. Under the program, students
were given specialization options in popular application development frameworks
like Sun Java and .NET.

Aptech also introduced another program for engineersAptech Certified
Technology Specialistalong with Prometric to enable certification exams. Aptech
would also be forging alliances with engineering colleges to offer Java courses
and certification exam facility on the campus itself.

These apart, Aptech opened thirty-five new education centers and bagged a
large order for training students from Nigeria, under the aegis of the India
Window Program conducted for foreign nationals in India. It also got an
enthusiastic response for the ITEC/SCAAP courses (sponsored by the Ministry of
External Affairs, Government of India), which cater to students from 156
countries across the globe. Training facilities were also commenced in Malaysia
under an agreement signed with MDEC Malaysia and SNT Malaysia.

Its flagship brandACCPwas adjudged the Best ICT Training Program in the
Best ICT Choice of Mongolia-2007 competition.

Meanwhile, its hardware and networking arm, N-Power opened twenty new centers
across India in smaller towns like Ghazipur, Haridwar, Moradabad, Rewari, Noida,
Bolangir, Bilaspur, Dadar, Vashi, Jamnagar, Kanpur, and Bhubaneshwar. N-Power
also launched N-Power Certified Enterprise Systems Engineer (NCESE) program in
collaboration with vendors like CompTIA and Red Hat. N-Power became the first
institute in India to offer BSc in hardware and networking in collaboration with
Karnataka State Open University.

Arena Animation tied up with MS University, Tirunelveli to offer a BSc Degree
in Multimedia and Animation, at selected Arena Animation centers, following the
SILM (Students Integrated Learning Model) for training with online examinations.
In the first quarter of 2009, new Arena centers were inaugurated at tier-2
cities like Surat, Nagpur, Udupi, Ghaziabad, Allahabad, Saharanpur, Durgapur,
Kasganj, Kanpur, and Tirur.

ICT in Schools

During FY 09, almost all states took up the challenge of introducing
computers in schools on a war footing, with Andhra Pradesh becoming the first
state in India to offer ICT education to all its 1.8 mn school going children.
Covering 5,000 government schools, the state government will be installing a
total of 50,000 computing seats in the schools. The YSR Reddy-led Congress
government has outsourced a five-year tenure project to leading educational IT
companies like NIIT, Educomp, Everonn, Social Computers, and TeraSoft based on a
BOOT model. NIIT incidentally bagged the lions share (worth Rs 172.8 crore) in
this single largest turnkey project in the school segment in India, working
across 2,005 schools. The company has incidentally been involved in providing
school learning solutions in over 663 government schools in the state over the
last five years.

CyberMedia Research                                                                                             DQ Estimates

Lauded for the developmental work being undertaken since the change of guard
in Bihar, particularly during the Kosi floods last year, the Bihar Government,
along with the Maharashtra Government, awarded the contract to NIIT for
providing computer and computer aided education to 1.9 mn students in 900 state
government schools in the two states. While in Maharashtra, NIIT would be
training nearly 1.3 mn students in 500 state government schools, about 6 lakh
children in 400 schools in Bihar would be taught in the next five years. As per
the contract, the company would provide a network of ten computers and one
server in each school, backed by a UPS and a generator to enable continuous
power back-up, apart from providing highly trained instructors for classes eight
to twelve in secondary and higher secondary government schools for a period of
five years.

The Rajasthan Council of Elementary Education (RCEE) too has entered into a
Rs 21.4 crore contract with NIIT to introduce CAL in 1,672 government upper
primary schools in twenty-two districts of Rajasthan within the framework of
Sarva Siksha Abhiyan (SSA). The five-year agreement would involve setting up
1,672 fully furnished modern computer labs with over 5,016 computers, benefiting
33,340 teachers and 8,36,130 students.

The New Delhi Municipal Corporation joined NIIT in providing information and
communications education in twenty-nine municipal schools, including 11,500
students from classes six to twelve, for a period of one year initially. As per
the engagement, NIIT would train teachers and would also set up computer labs
inside NDMC and Navyug Schools to offer training on computer science and
informatics practices, and offer basic computer education programs for students
of classes six to ten. Significantly, with this, NIIT will offer ICT education
in more than 9,500 government, municipal and private schools across the country.

Educomp, the other major player in the segment, has also done its homework
well. Even as it bagged a work order worth Rs 50.27 crore from the Karnataka
Government for implementation of computer aided education in 708 PU colleges in
the state over a period of five years; it went ahead and inked a Rs 109 crore
deal with the Yedurappa-led Karnataka Government for providing computer aided
education in 1,571 schools.

This was followed by bagging a Rs 18.3 crore contract from the Haryana
Government, which is taking its first steps in introducing ICT in senior
secondary schools. The state government awarded a three-year contract for
introducing ICT in over 800 government high schools in twelve districts
including Ambala, Bhiwani, Faridabad, Gurgaon, Hissar, Jhajjar, Karnal, Mewat,
Panchkula, Panipat, Rohtak, and Sonipat.

CyberMedia Research     DQ Estimates

Unlike IT services or BPOs which are primarily exporting to the US or UK, training reaches far more exotic shores. Vietnam, Mongolia, Ivory Coast, Botswana, Ghana, and Mexico were some of the more popular destinations

Meanwhile, the Uttar Pradesh Government contract worth Rs 120 crore would see
Educomp working in 1,401 schools across four zonesLucknow (372 schools), Meerut
(380), Jhansi (369), and Gorakhpur (280).The contract would provide right from
hardware and software, one full-time instructor at each school, courseware and
training to even electricity and Internet connection at each school. It will
also monitor and manage the project during the five-year contract period. On the
other hand, in Assam, working with the Assom Sarba Siksha Abhijan, (SSA)
Mission, Educomp would be involved in imparting training and engagement to
teachers in 641 schools.

The Gujarat Government, however, seems to be toeing a different line from the
other states as it has awarded a contract to both Educomp and NIIT. While
Educomp has bagged a Rs 83.8 crore contract to cover around 8,50,000 students
from classes nine to twelve across 1,780 schools in two zonesNorth Gujarat (905
schools), and Saurashtra & Kutch (875 schools); NIIT would work in 1,870 higher
and higher secondary government schools impacting around 9 lakh students under a
contract worth Rs 84.3 crore.

Exporting India

First it was China, then Africa, and now the focus has shifted to Vietnam.
Vietnam seems to have found favor with the two training majorsNIIT and Aptech.
As Aptech celebrates ten years of operation in Vietnam through its thirty-eight
centers, the company has seen significant growth in the last one year. Aptech
Vietnam has trained over 40,000 students in subjects like software education,
animation, multimedia, and hardware and networking. Last fiscal, N-Power
introduced a hardware and networking course by opening two centers. The company
is also looking at opening Avalon centers.

Aptechs China operations, meanwhile, was divested and it completed the sale
of 50% equity interest in its joint venture. As part of the deal, Aptech got 22%
stake in the holding company of the business in China. Besides Vietnam, Aptech
is also scouting opportunities at setting up centers in Latin America and
French-speaking countries in Africa. It recently signed a JV in Brazil with the
Falgo Group. Aptech Brazil would be addressing the retail market with ACCP and
other related ICT courses. These programs will be in line with Brazilian
University programs. Under the JV, 51% investment will be from Aptech, while the
rest will be invested in equal parts by the Brazilian group. While the
operations will commence in September, fifty centers would be set up in the next
three years.

NIIT meanwhile registered over 45,000 students across foreign centers,
opening twenty-four new centers across diverse locations like Iran, Malaysia,
MEA, Mexico, Nigeria, Thailand and Vietnam. The training major launched a slew
of courses including a new version of their Master Mind Series (MMSv2) in
Botswana, Ghana, Mexico and Vietnam; courses from tech majors (Web component
developer and Solaris Admin from Sun, Oracle 10g and Oracle 11i Financials;
Modular Offering 2007). The NIIT course was also accredited by Nigerias
National Board of Technical Education.

Stuti Das

stutid@cybermedia.co.in