You can outsource 90% of your business processes

As chief research officer and senior vice president of IDC,
John Gantz is responsible for IDCs worldwide demand-side research, global
market models, and research quality control and standards. He is also a member
of IDCs management committee, chief architect of IDCs Global Internet
Commerce Market Model, TM, IT Economic Impact Model, and PC Software Piracy
research. He is one of IDCs chief spokespersons on broad technology and
market issues at major forums in the United States and around the world. He was
in Bangalore recently as the chief guest for IDCs Directions08 event

There has been a lot of talk about global IT spending. How do
you see global it growing, especially in India and the Asia Pacific?

Globally, IT spending has been rising. During the last decade, the growth
has been between 6-7%. We are seeing similar kind of growth in the US, Europe
and Japan. Outside of these, however, some of the Asian countries are seeing
double-digit growth. For instance, due to the increasing domestic IT spending in
India, it has seen around 19% growth. We expect global spending in India to also
increase since there is a huge untapped market available. Currently, India
contributes 1% of the total IT market globally.

There was also a reference to the BRIC countries (in
Directions08). How do you foresee IT spending in these areas?

IT spending has been rising in the BRIC countries. India and Russia have had
similar growth and are tied at 19% each, while China has been seeing a 14-15%
growth; and it is about 13% in Brazil.

SMBs have been a major topic of discussion. What kind of
spending do you see happening in that space?

SMB is still an untapped green-field area. Due to various factors such as better
broadband connectivity, it may rise. It is still very difficult to reach them.
Nevertheless, they are growing thrice as much as large enterprises.

Which major segments, according to you, would drive IT spend?

Healthcare is definitely gaining momentum, and BFSI is another segment.
Generally, manufacturing and BFSI lead.

How do you see the e-Governance space in India?

e-Governance is not simple computerization. There is a huge market
available, but it needs to spend.

A lot of rhetoric has been going on about Web 2.0. What is your
take on the technology, and how relevant is it for enterprises?

When I speak to some of the CIOs they sound quite negative, and are not too
open about this. I think some Web 2.0 applications like instant messaging, wikis,
etc, will be popular.

Even WiFi, VoIP, etc, were not readily adopted by IT
departments. But, these technologies are all prevailing in the market today.

Yahoo! has incorporated its messenger on the browsers. Do you
think others will follow?

I presume it could well become an essential use for the application.

Looking at the recent trends, it seems that Web 2.0 kind
of dotcoms are coming back. Will they survive?

One thing about these dotcoms is that no venture capitalist is investing in
them. In 2000-01, a lot of VCs invested in dotcoms, and then there was this huge
crash. However, some of the dotcoms like E-bay or Amazon have survived and are
still doing business. Similarly, the dotcoms with strong business models will
survive.

Social networking sites have been in the news, and some big
companies are now getting into this space. Do you think content will be the king
here or is contact with customers going to be the new king?

Contact with the customer has always been the king. However, user-generated
content will take over from regular content in some parts. Still, there needs to
be clarity. Take for instance Google buying YouTube. There also needs to be some
clarity when it comes to user-generated content and copyrights.

How do other verticals affect IT spending? For instance, will a
slowdown in the mortgage industry in the US affect some BPOs in India?

I think there is a lot of scope for business process outsourcing. If you ask
me, Ill say you can outsource 90% of your business processes. If we look at
it in that sense, BPO companies still have a lot to offer.

There were talks about a slowdown every 15 yearsDo you expect
a bust in 2015?

Yes. It is not a slowdown, but some kind of a crash. We have seen it all. In
1970, it was the mainframe, in 1985 it was the PCs, in 2000 it was the dotcom.
It all depends on the markets. However, I cannot say what kind of crash. It
could be in the machine-to-machine or embedded, it could be anything.

Pradeep Chakraborty and
Srinivas R

maildqindia@cybermedia.co.in