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IT: industry overview

The sector is expected to directly be employing 20 lakh people, an increase of 3.75 lakh professionals over the previous year. Nazim Khan tells us more.Challenges faced | Quirky facts
Hindustan Times | By Nazim Khan, Mumbai
UPDATED ON MAR 17, 2008 11:17 PM IST

IT's big and growing

Information Technology was the original face of India Shining. And it will continue to be part of that story as companies do more sophisticated work and thereby command higher fees, and newer sub-fields such as animation, game development and information security take off and add their bit to overall revenues, now dominated by software services.

The numbers speak for themselves. India's information technology (IT) industry is expected to post revenues of $64 billion (Rs 2.56 lakh crore) in the financial year to March 2008, a huge 33 per cent rise from the previous year, according to the sector's umbrella body NASSCOM. This figure, which includes revenue from IT-enabled sectors such as business process outsourcing, amounts to about 5.5 of India's gross domestic product.

The sector is expected to directly be employing 20 lakh people, an increase of 3.75 lakh professionals over the previous year.

Of the total revenue, the biggest share, of $52 billion (Rs 2.08 lakh crore), will still come from software, of which more than 80 per cent of this is exports. Not only has the sector moved rapidly up the value chain over the years, but expanded to include sub-fields such as animation, game development and information security, which are expected to become increasingly important in terms of revenue and employment.

"There is immense scope in the information security business," said Dharmesh Mehta, a technical analyst with Mastek, "Going forward, almost all business will take place over the Internet and vital information will be exchanged. Added to this, the level of awareness among Indian companies of securing their data is very low. This creates an immense need for well-trained and qualified information security professionals."

He said that a recent study by Gartner Research says that 75 per cent of hacking attacks take place on web applications, as opposed to attacks on individual servers and computers.

Moving up
Initially, the Indian IT sector began modestly by providing maintenance support to companies overseas, but today do high-value projects such as creating enterprise solutions, providing consultancy, doing research and development, and even coming up with software products, the last being the riskiest but potentially most lucrative source of revenue.

In other words, the sector will be a job churner for many years to come, and these jobs will be more challenging as well as diverse. Training is, however, lagging behind this growth, so professionals will be in high demand.

"The industry has grown phenomenally," said Satish Doshi, managing director of Sampoorna Computer People, a firm that offers hiring and staffing services to IT companies. "The demand for IT professionals is so steep that companies have to resort to mass-hiring techniques."

Yet because the rupee has appreciated and the US economy has slowed down, companies there are cutting costs, which means that some Indian IT companies' revenue and profit growth could dip.

"Those companies that are totally dependent on the US are going to have an impact," said Doshi. As a result, he said salaries in the sector, which seemed to have escaped gravity, have now come under control. Also, while earlier the industry used to persist with laggards and non-performers, now they are asked to leave, he said. All of this is likely these will have a positive impact on the industry, he said.

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