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Indian IT sees new ends and beginnings

columns Updated: Jan 06, 2014 14:36 IST
N Madhavan

There was a galaxy of corporate leaders last Friday at a farewell ceremony for Som Mittal, president of the National Association of Software and Service Companies (Nasscom), who makes way for R Chandrashekhar, former IT and telecom secretary.

And everytime a new president takes over, it seems there are new problems -- and new opportunities -- as it seems this new year.

I used to know Nasscom two decades ago as a one-man show in T-shirt and jeans, when the late Dewang Mehta walked the newsrooms trying to sell the idea that India would become a big software exporter. It was then less than 1/200th the size of the industry that now grosses more than $100 billion (R 630,000 crore) in revenue and directly employs 3 million people.

Mehta died in 2001 of a sudden heart attack at the young age of 37 in Australia, possibly of stress trying to sell the idea that is now an obvious truth: that India can be the world's hub for IT and back-office services. That very year, India's IT industry was rocked by a triple whammy. The Internet "dotcom" bust and an accompanying telecom meltdown followed by 9/11 attacks hit the industry hard. However, months later, Indian companies latched on to business process outsourcing (BPO). Cost-cutting in the West now spelt new opportunities for India.

Dr. Kiran Karnik now took over as Nasscom president as BPO boomed liked hell, but his problems were different. He had to prepare the industry for education and other measures to make it brave an impending shortage of skilled workers as India's abundant knowledge workers seemed to be a smaller pool than earlier thought, given the explosion in demand as multinationals like IBM and Accenture expanded their footprint in India.

Som Mittal took over from him in 2008, only to see the industry plunge into a new crisis when the Wall Street collapse hit hard the biggest markets of US and Europe and along with it the juiciest customers of the financial services industry. But Mittal's opportunities lay in the emergence of startups and mobile telephony. Nasscom, with help from companies like Google, is nurturing 10,000 startups, indicating that the former "cheap code" nation can now shape innovative giants.

Chandrashekhar steps in for new opportunities spelt by the acronym SMAC - social media, analytics and cloud computing -- while the US economy has turned robust again. But his problems seem to be emerging in the realm of cyber security and privacy, as a huge network of global computers give rise to new problems in politics, diplomacy and culture. There is never a dull moment at Nasscom!