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Sudhir Gera

The Indian software segment would do well to target Japan more aggressively. All one wants finally is a fruitful ride.

SOFTWARE exports from India, for the most part, have largely remained restricted to the single biggest market of the US. The reasons are obvious — it's an English-speaking market, US tech players such as Microsoft, IBM and Oracle have set up base in India, there's the Indian's `dream' of working in the US, then the opportunity offered by the Y2K scenario, and of course the dotcom boom.

But this is not to say that the Indian industry has been blind to the dangers of focussing too much on one region. Heeding alerts from industry bodies such as the National Association of Software and Service Companies (Nasscom), Indian companies have been looking at markets as diverse as Europe and Latin America. The result of this diversification is already visible. The US market, which used to account for as high a share of Indian software exports as 90 per cent about five years ago, today garners a much lower 68 per cent. Indian software companies are realising the need to de-risk by looking at other equally rewarding markets. One such market that offers much potential is Japan. According to research firm IDC, the Japanese market is expected to reach $54 billion (about Rs 2,00,000 crore) by the year 2004. While Japan is a leader in terms of its hardware capabilities, the country has lagged behind when it comes to software.

Realising this, Japan has, of late, been welcoming Indian software professionals with outstretched arms. According to estimates, the current demand for Indian software professionals is pegged at 10,000 to 15,000 in Japan. This represents a huge opportunity for Indian companies and professionals since there are only around 4,000 Indian IT professionals at present working in Japan.

India and Japan share a traditional bond that goes back thousands of years. The Japanese people, no less religious than Indians, have been known to have a special affinity towards India as the birth place of Buddha. Both the countries are highly regarded for their hospitality towards guests. The Japanese tea ceremony captures the warmth of the Japanese, just as the Namaskar — the clasped hands salutation — embodies Indians.

As regards the IT industry, both Japanese firms and Indian software vendors are known for their quality-driven approach. Language remains a barrier, true. But it is something Indian professionals can easily work on, given their ability to learn new languages. What is required more is to popularise Japan as a promising career destination for Indian software professionals. For one, Japan is a pioneer in electronics products with embedded chips — be these game consoles, washing machines, audio systems or next-generation mobile devices. The over $19-billion domestic electrical appliances market in Japan is characterised by an increasing use of embedded technology as the appliances become more and more intelligent. The role of software in such products, therefore, is especially significant. It makes a strong case for Indian companies to power Japanese appliances with their software to be a part of this lucrative market and thereby gain a competitive edge.

Among the segments of the Japanese industry that offer the most potential to Indian software companies are consumer electronics, telecom and wireless, medical electronics and industrial automation. To give an example, a large team of software engineers is working on a multi-year contract for a Japanese conglomerate. The task involves enhancing medical image analysis software that will act as a critical decision-support tool for doctors. Such projects are gaining wide acceptance from the Japanese industry that is increasingly seeking the help of Indian software companies with domain-specific competencies to maintain and upgrade its IT systems.

Another reason for looking at Japan is that it is a very quality-conscious market. Any company that can claim that it has worked with a Japanese customer and has served it to the latter's satisfaction, can go miles in the global market. This is so because everyone is aware of Japan's obsession with quality. Having a satisfied Japanese customer can speak volumes about the quality standards and precision work being done by the services companies.

Already, a number of Japanese companies are working with Indian software services providers on cutting-edge technology projects. In 2002-2003, Indian software companies generated revenues close to Rs 1,000 crore from the Japanese market and this figure is expected to grow significantly in the next two to three years.

High-ranking officials from Japan have, on more than one occasion, indicated Japan's willingness to allow more software professionals from India, besides easing the visa norms. And it would be to the Indian software industry's advantage to capitalise on opportunity in the Land of the Rising Sun.

The author is Vice-President, Marketing, Blue Star Infotech Ltd.

Photo by V. Ganesan

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