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India's IT & Outsourcing

The total business will jump from the current $30 billion to an estimated $300 billion by the end of the first decade of the new millennium, writes Deepak Mankar.

india Updated: Dec 26, 2005 18:45 IST
Deepak Mankar
Deepak Mankar

Let's talk about overkill that's so rampant these days. Here's my puzzle for all Christmas revelers. Of late, I've been seeing a cable channel's promo of the belated telecast of a July 2004 Radio City Concert by a famous rock star on whom knighthood apart from a lot of assorted honours have been conferred. His real name? Reginald Kenneth Dwight, no kidding. The ad breezily boasts of a 62-member back-up choir, two full symphony orchestras plus the star's own rock-and-roll band in attendance. My stupid question to all you clever folks out there is, if he's really such a great singer, why does he need all that reinforcement? To drown out the static? Answer me that as I wish you a very, very Merry Christmas.

TEN BY TEN. India's IT & BPO Outsourcing.

Along with Santa Claus comes the cheery news about the future of the Indian IT and BPO business. A McKinsey-Nasscom report says that, by 2010, it is "poised to grow ten-fold". The growth will come with Indian companies continuing to maintain their 46 per cent share of the global business processing outsourcing market and 65 per cent share of the IT outsourcing market through 2010. The total business will jump from the current $30 billion to an estimated $300 billion by the end of the first decade of the new millennium. "These two sectors of the Indian economy will earn $60 billion in exports by March 2010, an increase from 3 per cent of gross domestic product to about 7 per cent." The BPO industry is expected to grow from $11.6 billion today to $150 billion by 2010 and IT outsourcing, from $18.4 billion to $150 billion over the next five years. The projected growth will directly employ approximately 2.3 million people, provide indirect employment to another 6.5 million workers and pay for a massive infrastructure build-out by 2010, says McKinsey partner Noshir Kaka. However, the likely stumbling blocks to growth, to cite McKinsey partner Jayant Sinha's words, may be the following: "First, the skills and quality of the workforce need to be improved, since only 25 per cent of technical graduates and 10 to 15 per cent of general college graduates are suitable for employment in the offshore IT and BPO industries." "Second, as margins come under pressure, companies must be able to continuously improve operational excellence, in addition to innovating and developing new service lines." Urban infrastructure ("from power to cafeterias") is the third one. "Further growth will have to come from entirely new business districts outside of Tier I and Tier II cities."

OUTSOURCING. A brand new twist?

I got some news about my friend and erstwhile colleague, Deep Bisen He talks about his marketing solutions agency, Maverick Thinking (he is the MD). Of his three main services on offer (lateral brand solutions, social marketing, outsourcing Indian talent abroad), the last one caught my eye. In his own words: "India is one of the major outsourcing capitals of the world, particularly in … IT... We will deal with outsourcing talent in … filmmaking, radio, processing and printing, and formulating corporate identities for publishing houses. For this, we are building a network around the world, particularly places such as Perth, Sydney, Vancouver, Toronto, New York and Dubai." Well, best of luck, old buddy!

SEARCH. And, ye shall be rewarded.

"You will get some free content or a cheque, or some incentive to use a different search engine. Competition for users has not even kicked in. I can assure you it will not stay that way." Prophetic words? Who knows? They came out of the mouth of Bill Gates in a November interview with the UK magazine, Computing, though. Other notable quotes: (1) "Google is getting about $50 per year for your searching. Yet, because it does not think it has any competition, it is not giving any of that back to you." (2) "As search becomes competitive and people realise that other offerings are as good, or are even significantly better, there will be price competition." (3) "We are going to run some experiments on that in the next year." (4) "There has never been a product in the world where the switching costs are lower. If you use Google at 9 am, you can use MSN at one minute past nine, and if you do not like it, you can use Google again at two minutes past nine. That little empty text box is not some huge barrier to entry." Here's what Forrester Research analyst Hellen Omwando feels about all this: "What is relevant is whether the site is good enough to give people what they want from a search. Financial incentives alone will not be enough." My stupid question for all you clever geeks: if everyone falls in line with the rewards policy, will it not encourage fake searches just for some easy dough?

SEARCH. And, ye shall be rewarded. (Part 2).

In India recently, Gates expanded on the reward-for-search theme. Some more prophetic words: "We'll actually go to users and say instead of us keeping all that ad revenue, we'll actually share some of it back with the user. … The user essentially will get paid, either money or free content or software things that they wouldn't get if they didn't use that search engine." Equally significant: "Google's business model is not based on free software. Their business model is based on advertisements from which they make a lot of money." And: "Google keeps all of the money with itself." In its bid to share revenues with users, Microsoft may give free software or even cash to users, he said but did not discuss further details.


Sixty-seven percent of global email traffic last month was spam, says an Israeli technology company that develops anti-spam and virus-fighting software, Commtouch Software Ltd. This is consistent with history, i.e., its previous analysis of spam trends - though, frankly speaking, spam follows geography. The average American gets almost three times more spam than the average Austrian, for instance, according to Oren Drori, Commtouch director of product marketing. He also pointed out that that the company's study of more than 2 billion messages from more than 130 countries revealed that almost 54% of spam originated in the United States. China is the second-largest contributor, around 10%. Almost 40% of all spam last month pitched drug or health products; 20%, 'enhancers'. Gifts were third most common at 19%. [Interactive charts for downloading at:]

THE SEMANTIC WEB. One more whack at it?

There are several on-going but slow-moving projects on the semantic web front. They include the World Wide Web creator Tim Berners-Lee's W3C initiative and the Technorati-driven microformats. Now there's a new one, The open-source 'Structured Blogging Initiative' is an attempt to jump-start the "semantic web," the idea of giving deeper meaning to the Internet advocated by Berners-Lee. Incorporating descriptive information into the code of web pages will allow lay people to designate their content as a movie review, an event posting, or an item for sale. "There's four times more stuff out there than is available to crawlers," said PubSub Chairman Salim Ismail at the recent Syndicate conference in San Francisco. That information includes eBay listings and many blogs. PubSub's 'search engine' zeroes in on the newest information on the Internet and allows users to subscribe to keywords of their interest to stay on top of the information. Two items in this column covering the topics remotely related to what we just discussed can be read at ('COVERING ALL BASES. Google Base now in beta.') and ('ROLL YOUR OWN. And, ye shall find.').

OH, WHAT A SCANDAL! 2.3 million phonies out there.

The Government Accountability Office analyzed a sample of Web registrations through the Whois database maintained by the Internet's governing body, the Internet Corporation for Assigned Names and Numbers. ICANN "generally agreed" with the agency's findings that 2.3 million Web domain names had been registered with "patently false data, obviously and intentionally false without verification" and another 1.6 million sites' registrations were incomplete. Whois data has become a resource for law-enforcement agencies and security companies investigating spamming, phishing and other troublesome uses of the Net. The GAO report prepared for the US House of Representatives committee on courts, the Internet and intellectual property is online at

That's all for now though there's plenty more out there. Join me again next week, same place.

Copyright (c) 2001- 2005 by Deepak Mankar. All rights reserved. Deepak Mankar, an advertising practitioner on the creative side since 1965, is also intensely passionate about the web and web content creation. Read his online articles at Website: You may e-mail him at

First Published: Dec 26, 2005 00:00 IST