Year of Sachet Packs

Evolution actually proclaims that contemporary apes and humans evolved from a

common ancestor, but that the ancestor was in a variety of ways, quite different

from contemporary apes. Charles Darwin asserted that in order for a species to

cope with the ever-changing environment and circumstances it is subjected to, it

must not only adapt, but must also be capable of passing on those adapted

characteristics to future generations. He called this ‘Survival of the Fittest’,

or preservation of favorable individual differences and variations, and the

destruction of those that are injurious.

Were we witnesses to the proof of natural selection during the slowdown,

where the best survived and others perished? For sometime now, there has been

speculation and even small proof that may be, the flourishing IT Training

industry had fallen asleep. The slowdown came at a time when the birds were

soaring high up in the sky. It hit them hard, demolishing most of the small fry.

But one needs to take a microscopic view of the training industry’s actions in

order to understand the survival tactics it embraced to stay afloat in FY ’01.

CLEAR WINNER: Forget last year’s tight race, this year’s revenue count made for an easy decision–NIIT, with Rs 451-crore revenues from training alone, was way ahead of runner-up Aptech (Rs 261 crore)

Year 2001 saw IT training companies will earmark for future reference. For

during this year, most of them sat down to introspect and change their habitual

patterns of functioning. Most fly by night operators had been sucked away while

majors like Aptech and NIIT saw their profits fall by over 90%. This was the

period that vendors began to explore methods of expanding the market by tapping

into newer segments and adopting newer business models to fight for survival.

They were reliving Darwin’s theory of ‘Survival of the Fittest’.

The 365-day nightmare...



One does not forget easily. That too when one has been dealt a bad blow. It

will be a while before the training industry puts behind the events of 2001.

These events led to a makeover that none expected. Vendors were pulled out of

their comfy chairs and shown the door and there was a major drop in the

enrolment figures. With the IT industry facing a slowdown, there was no longer a

pressing need for more and more wannabe software professionals who could be

brought into the world overnight. What was in demand was more professionals with

their fundamentals right, those who could adapt to the changing scenario and who

would justify the increasing cost to the companies (CTCs). There had to be a

fresh look perspective in creating professionals who could be assimilated

anywhere. So, trainers began to introspect and students shied away in fear.

Newer business models were being rolled out as the industry woke up to sound

professionals and not just ones who had done a crash course in JAVA. Ironically,

the enrolments for JAVA petered out and it does not even feature on the

essential skill sets for the future. A survey conducted by Dataquest among the

industry and enterprise segments reveals that NIIT is the first choice for

recruiters, with Aptech a close second and STG occupying third place. Where the

total revenue and number of centers is concerned, NIIT emerges as the

indisputable leader. In both these categories, it has Aptech close at its heels.

Change, change, change...



Just as necessity is the mother of invention, the environment warranted a

change in image and product offerings. The vendors changed track during the

slowdown. They moved away from the well-tested path of pure retail education and

focussed on value added industry specific courses. There was an increased thrust

on corporate and institutional educational initiatives. They started looking at

government initiatives considering that funds had been allocated for this

purpose alone. Another method that caught the fancy of institutes as well as

students was the doorstep training initiatives like dial a tutor scheme

introduced by some groups.

NIIT remains TOP GUN: Market leader NIIT continued to lead the numbers race for training centers. However, Aptech was ahead of NIIT if school centers were not included. With 1,071 school centers, NIIT reported an over 100% lead over next-in-line Aptech (502).

As Cisco CEO John Chambers puts it, "The Internet economy’s all-out

slump has been like a 100-year flood. It’s something you don’t expect to see

in your lifetime." 2001 has been a testing year and those organizations

whose business is based on strong fundamentals will survive. The focus has to be

on ‘back to the basics’.

The slowdown ensured that whatever the decision, the action had to be

implemented with a sense of urgency. Various processes and systems were put in

place to improve operational efficiencies. Also, cost reduction measures were

initiated. Suddenly there was no time to be lost.

Most came up with innovative business models to prevent revenues from

tumbling. Tata Infotech introduced the concept of ‘blended learning’ where

they used a combination of instructor led and computer based training. Cisco

decided to focus on its network education program as it felt there was a shift

happening in that direction. Aptech settled for a hybrid model of delivering

education, which was christened Aptech’s Multimodal Education Delivery

Architecture (AMEDA) which would simultaneously help in cost-optimization due to

faculty de-skilling and use of technology. ZILS added corporate training and

learning solutions for academic institutions to its initiatives while reducing

its dependence on purely conventional IT education.

INDUSTRY STAYS OPTIMISTIC: A majority (58%) of IT industry respondents expected an increase in training budgets this year. Their enterprise counterparts, however, differed, with only 18% expecting an increase in budgetary outlays for training. ENGG PASSOUTS ARE HOT: Only 38% of industry (and 25% enterprise) respondents said recruitments would be made from among training institute passouts, preferring engineers

Survival key: Back to basics



With the new thrust on strong fundamentals and ‘back to basics’, the

trend has been an increase in enrolments for long duration courses over

short-term crash courses. The skills in demand were in the areas of software

engineering, programming and analysis; Internet and e-commerce applications;

database administration; network specialization and communication engineering;

digital media; business applications of software development; application

service providers (ASPs); Web-based applications; networking applications; Java;

data warehousing; client networking; project management; quality assurance;

technical writing; legacy systems. among others. For instance, Aptech’s

modular and career courses have seen great demand along with the animation and

multimedia programs from Arena Multimedia. The G-Tech course of Tata Infotech

showed maximum enrolments in 2001. Similarly, the Cisco Certified Network

Associate has seen a large number of registrations.

There is a growing trend of IT professionals wanting to supplement their

existing IT skill base. This is in direct co-relation to the speed of change in

technology standards. There will be a visible shift in the number of

certifications per individual, which will mean every individual will have a

minimum of four certifications.

There is a demand for networking, enterprise application integration, and

.NET short courses. The demand for designing, multimedia, and animation has also

been on the rise. Other growing areas will be Web-based technologies and

Web-based programming. So far, the trend was on development of two-tier

applications–so the emphasis was on database design and database access. Now

with the Web paradigm fast catching up, the emphasis will shift to three tier

and n tier systems with stress on application server programming. And with web

services poised to take off as the next big opportunity, there will be an

increasing demand for courses that equip the developer community to build

specific business and user applications on the web services model. In addition,

other industry segments like banking, insurance, ITeS will need specially

trained manpower in IT applications with exposure to those domains. Courses like

Call Tech (for call center training) and Prof-fit (for training for non-IT

industries) offered by Aptech have evoked a good response. Also, with growing

investments by private operators across telecom services in IP-based networks,

there will be an increasing demand for networking professionals to design, build

and maintain those networks.

Even within IT departments, new segments will be recognized which would

require customized training modules. IDC has already identified the need for

specialized certifications catering to mid-level IT professionals including

system administrators, network administrators, technical support and Web server

administrations. IDC’s report for 2001 predicts that 18% of the job market

will comprise network administrators and 16% of system administrators, viz 34%

of the job opportunities will be in the administrators segment.

Hottest: Institutional training



Given that there’s been a general lack of interest, which translated into

fall in registrations, there has been great skepticism among all players. But

the explanation of the numbers game in 2001 has been that lack of interest is a

short-term phenomenon associated with a job squeeze. What this has done is made

students discerning and selective. They have come to realize that the best

investment that a person can make is in one’s self. A technical certification

is recognized as one self-investment that provides a tangible and relatively

immediate return. In fact on an average, IT professionals are now vying to

obtain more than one technical certification to boost their existing skill set.

This will continue to propel demand for IT courses.

PERCEPTION AUDIT: NIIT led the perception race, pipping Aptech by narrow margins in quick surveys among respondents from enterprises and the IT industry. Asked to name “their preferred institute for recruitment”, most rated NIIT as #1. However, there was an overall swing away from private training institutes and toward students with engineering degrees and diplomas

There’s a clear shift. While retail training is and will still be dominant

in the near future, institutional training is picking up at a fast pace. Besides

this, many IT training vendors have software divisions which, in most cases, are

growing at a rate much faster than the traditional training division. The

industry will witness a demand for specialized courses in newer categories. The

upgradation of IT skills will not be restricted to the IT departments alone.

There is an upswing in the mood, though, with research firms like Forrester

predicting that the demand for IT professionals will outstrip supply over the

next two years. By 2003, global demand would be higher at 6,35,000 compared to

the Indian supply of 4,75,000 software professionals. A recent study by IDC also

reveals that the number of jobs created in the IT sector in India will grow to

11,81,735 by 2005 while a further 4.25 million jobs will be created across key

countries in Asia by 2005. This implies that to fill this huge gap, a great

opportunity exists for the Indian IT professionals.

Dhanya Krishnakumar,in New Delhi

Inputs from Amit Sarkar