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Unbridled Wanderlust

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DQI Bureau
New Update

Speaking at the IDC briefing sessions in Bangalore and New Delhi in the least

week of August, I was bemused to note both the lack of knowledge and the

considerable interest of the participants in the opportunities for Indian

software exports beyond the traditional US and Western Europe markets. After

years of extraordinary success in getting business from the USA and UK, there is

great merit in recognizing that there is a bigger world out there.

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Some of the statistics provided by IDC make a compelling story. Even today,

the US accounts for 62% of Indian software exports and Europe (24%). The

offshore work done for companies outside the US and UK probably contributes less

than a couple of percentage points to the country’s software revenues. The

reasons–lack of cultural compatibility, difficulties of communication in

languages other than English and most important, the rather half hearted

initiatives that have been taken to woo customers in these markets!

"Typical

kneejerk responses–like simply appointing an agent who speaks Arabic,

Spanish or Portuguese–can prove disastrous"

Ganesh

Natarajan

There are several myths about these smaller markets–first, that there is no

profitability here. While this may be true for Singapore and the United Arab

Emirates where the preponderance of Indian systems chiefs leads to reluctance in

parting with significant monies when dealing with Indian vendors, the gross

margins that can be realized from projects in Japan, Australia, South Africa,

even Saudi Arabia and parts of Latin America, are certainly worth the marketing

efforts. Another myth is that markets like Canada and the Gulf are only worth

opportunistic body shopping attempts–the reality is that the markets give us

what we chase and a conscious attempt to move projects offshore has resulted in

rich dividends for a handful of companies who have penetrated markets like Japan

and Saudi Arabia.

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If there is one statistic that is worth considering, it is the projections

for GDP and IT services spending growth. While the optimists believe that GDP

growth in the US will be restored to 3.4% by 2003 (the continuing slide in the

stock markets would tend to belie that expectation!), and European growth rates

would climb to nearly 3%, the real high performers would be the developed and

even the developing Asian markets. The other sign is the expectation that the

Compounded Annual Growth Rate of IT spending will be 14% in the Asia Pacific,

13% in Latin America and 12% in the Middle East and Africa.

There is a significant need emerging, particularly in markets like Japan and

Latin America for providing quick solutions to migrate their applications from

legacy systems to Dot.Net or EJB architectures and also to build new systems

using component and solution blueprinting approaches rather than the traditional

analysis, design and programming cycle. This, as well as the area of providing

high quality security solutions hold tremendous potential for Indian software

providers in the years to come.

How does one approach these markets? Is it enough to make an occasional

visit, appoint an agent who speaks Arabic, Spanish or Portuguese as the case may

be? These kneejerk responses can prove to be a recipe for disaster. The first

step is to have people in the territory who understand the local language and

culture and are well trained in the products and services of the firm. This

needs to be followed through with experienced people available to meet with

clients in the territory. And most important is the need to sensitize

consultants in the territory about the local culture. If the intent is there and

strong actions are taken, there is reason to believe that these markets can make

up 30% of Indian software exports in the years to come.

Ganesh Natarajan is the global CEO of

Zensar Technologies

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