The Hindu Business Line : Toasting time again for all in IT sector

THE year 2004 promises to be full of excitement for the technology sector where domestic players — big, small and medium and multinational corporations have struck a positive mood.

Herewith a perspective on the general outlook for the sector that is looking up lately after about two years of slowdown. The Chairman of Satyam Computer, Mr B. Ramalinga Raju, said "The year 2003 has been encouraging and the trends indicate a robust growth for the Indian IT companies in the coming months.

Mr B. Ramalinga Raju, Chairman, Satyam Computers

"A revival in technology spending coupled with the increasing adoption of offshore outsourcing by global customers and the pre-eminence of leading Indian IT services companies in this space will ensure high growth opportunities in the coming years. This trend is facilitated by a favourable geo-political environment. We, at Satyam, are fully geared to meet these opportunities which would further strengthen our position in the global market place."

Mr Shekhar Dasgupta, Managing Director of Oracle India

Striking a similar tone, the Managing Director of Oracle India, Mr Shekhar Dasgupta, said "2003 was the first year of recovery after three dreadful years of a global recession. The effort was to look for new ways to make their IT investments yield better and faster returns. Businesses, governments and other organisations will want to extract more from their IT investments.

"Therefore, information architecture is going to be important in 2004 where CIOs will need to plan the exact scope of the IT systems. In 2004, the grid computing technology will pick up phenomenally in India because spending less money on IT is a compelling business proposition," Mr Dasgupta said.

The Managing Director of Computer Associates India, Mr Ninad Karpe, said "the IT sector performance has been much better than expected. Starting the year on a sluggish note, the sector quickly put in a resounding performance. The outlook for 2004 can be encapsulated in one word — MORE. This sector will witness more of everything — more business, profits, acquisitions, mergers, people, enigma, hype, competition, cost-cutting, challenges and excitement."

The General Manager, Operations, Virtusa India, Mr Santanu Paul, said "as the US economy began to emerge from its multi-year slump, investments in IT products and services have also resumed, albeit at a much subdued scale compared to the heydays of the late nineties. We have bucked the global slowdown and barring unforeseen negative developments in the geo-political scene, the global economy will continue to improve. This means more growth for the Indian IT sector.

Outsourcing is going up from being a trickle to a flood, and with 75 per cent or more global 2000 corporations yet to outsource, there is a long period of sunshine ahead."

Mr Paul said "however, Government sector outsourcing from the US will slow down somewhat given that in a US election year, political parties of both hues in the US will likely respond to public outcry around loss of white collar jobs by cancelling or withholding Government contracts to Indian companies. But the real growth will come from the private sector, which will continue to outsource to India, its favourite destination."

Mr R. Chandrasekharan, Senior Vice-President, Cognizant Techonology Solutions

The Senior Vice-President, Cognizant Techonology Solutions, Mr R. Chandrasekharan, said "this was a year of globalisation for the Indian IT industry. Competition became truly globalised with the entry of global system integrators. "Companies started hiring a multicultural workforce in the true sense of the term, made cross-border acquisitions and established development centres globally. The large companies made known their intent to be among the global 10 software companies."

"Cognizant believes that offshore outsourcing is still in early stages of its growth cycle. There is good traction with existing clients as they find this model works well. There is still billions of dollars worth of work carried out in-house. I am optimistic that the growth is here to stay and will gain further momentum. A growth rate of 25-30 per cent or above is no longer ambitious," Mr Chandrasekharan said.

Summing up the IT sector achievements, the National Association of Software and Services Companies (Nasscom) maintained that the industry was steady and growing where Indian companies had carved out a strong value proposition in the IT software and services areas. This has led to a situation where Indian companies are witnessing a second wave of opportunity.

The IT sector will see a separation of commodity services players from high-end services players. The commodity players would experience enormous downward price pressure and many of them will simply disappear.

The high-end players, on the other hand, would develop domain expertise in specific verticals, or develop specialised methodologies that help attack and resolve complex, longstanding IT problems that plague large enterprises. Such players would also start commanding higher prices for their specialised services.

Giving a hardware perspective, the Managing Director of Amkette, Mr Rajiv K. Bapna, said according to Manufacturers Association of Information Technology (MAIT), the desktop PC market grossed 22.9 lakh units, registering a growth of 37 per cent over the previous year (2002), with the second half of FY 2002-03 gaining greater momentum.

In last quarter 2003, the things have turned out to be very good and people are looking forward to a major growth in the forthcoming year. "With consumer demand moving on a high, we will witness growth in business from B and C Class cities. If the Budget announcements are as expected, fuel would be added to fire and the growth should skyrocket."

The Managing Director and CEO of Aptech, Mr Pramod Khera, said that the fortunes of the technology education was linked to the growth of the IT services and ITES sector where customisation and outsourcing is emerging as a new trend. " We are poised for faster growth."

The COO of Net4India, Mr Uday Sodhi, said "it has seen a leap forward with the Internet access and IP Telephony becoming more popular as they qualify the needs of the end customer. With TRAI regulating tariffs, mass penetration of telephony is already on its way of achievement. Broadband will be the driver for 2004.

As Internet penetration along with growing PC usage is bound to increase, broadband services will be adopted with more enthusiasm. The Telecom Regulatory Authority of India (TRAI) is reviewing broadband as seriously as it did telecom in 2003. There are bound to be investments in connectivity from the Government and States to provide quality citizen services and drive the market subsequently. Already, fiberisation worth Rs 30,000 crore has been done within the country."