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India’s IT industry heads for a new landscape

business Updated: Feb 15, 2015 18:51 IST
N Madhavan
IT industry

Apparently a drone was flying over 1,600 delegates at the annual India Leadership Forum of the National Association of Software and Service Companies (Nasscom) last week.

In a sense, that unmanned drone is a symbol of automation and represents a signal for India’s IT-BPO industry – which has been tirelessly reinventing itself for the past three decades, growing from writing basic code for monolithic mainframe machines to writing code and solutions for mobile apps in your handset.

With revenues just $4 billion short of $150 billion (Rs 900,000 crore) and directly implying 3.5 million people, the industry now has global scale as it eyes new areas like the “Internet of Things” and Big Data analytics.

And every time there is a tectonic shift in the industry, there are unwarranted doubts raised on its future growth. Nasscom has lowered the industry growth estimate for 2015/16 to 12-14% from 13-15% in the current year – with exports estimated at $110 billion.

What should be of concern is that linear headcount growth won’t work anymore for the industry. Some companies like Wipro are already realizing that. Software itself is getting automated at the high end while low-end work like mobile apps can be done even on the backseat of a moving bus!

The industry would do well to contemplate on a reorganization of the ecosystem in which large behemoths like Infosys and Tata Consultancy Services may give rise to smaller companies linked in a “virtualised” network. Recent murmurs over labour reorganization at TCS should be viewed in this backdrop.

The new, altered landscape may well involve mid-sized companies flexibly networked with thousands of startups and knowledge boutiques based on specialisation and skillsets.