The Hindu Business Line : ‘Software services growth could slow down in the short term’

Chennai, April 08 The Indian IT software services industry would continue to see growth but that growth could be tempered in the short term, according to Mr Som Mittal, President, Nasscom, the industry’s apex body.

This stems from the challenges that the industry faces in the form of a possible slowdown in the US, while the rupee appreciating against the dollar has only added the IT industry’s woes.

Addressing a gathering to bid farewell to Mr Lakshmi Narayanan, the chairman of Nasscom for the past year, Mr Mittal said, “We will meet the $60-billion export target for 2010. That would mean a growth of between 22 and 24 per cent per year – we will achieve that. The prospects for the industry remain robust. There would be growth but it could be tempered in the short term.” He added that the industry is cautious with respect to the next 12 months, but also that it is cautiously optimistic.

Education focus

With regard to education, on which hinge the fortunes of the IT industry, he said, “If you look at the latest Five-Year Plan, you could easily mistake it for the Education Plan. That is the kind of attention and investments that the Government has committed to the education sector.” He said that the industry would have to get more involved in the sector as well as reap the fruit of its efforts through manpower emerging from the country’s colleges.

He added that it was important for the industry to expand its global footprint. “Japan, the second largest economy in the world, contributes only two per cent to the IT services industry’s total revenues.” There was an opportunity waiting to be tapped in that region, he said.

In his farewell speech, Mr Lakshmi Narayanan, also Vice-Chairman of Cognizant Technology Solutions, touched upon the acute need for quality manpower in the industry, and said, “Even if we assume that 20 Indian Institutes of Information Technology (IIITs) churn out 500 candidates a year, that only comes to 10,000 people. The largest Indian IT services company alone employs 30,000 people a year.”

So, there had to be mass upgradation of colleges to help meet the industry’s manpower need. He added that the country needed to develop its ability to scale with regard to meeting manpower requirements.

Mr Ganesh Natarajan, Vice-Chairman and CEO of Zensar Technologies, who takes over from Mr Narayanan as Nasscom Chairman, agreed saying, “A few more business schools or a few more IITs would not solve our problem.” In other words, a concerted effort is required to make a graduate employable, irrespective of the institution in which he studied.

Among other things, he plans to continue the innovation movement in the IT industry. As an industry, “we have created defensible entry barriers to compete. It is easy to create a headcount of 1,00,000 but not every one can induce creativity,” he said.

The ability to collaborate as an industry is another area Mr Natarajan said he wanted reinforce. “When 25-odd CEOs sit around the table in the council meetings at Nasscom, there is clearly a sense of collaboration and the willingness to contribute to a common cause.”

More Stories on : Software | Outlook

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page