Software Shines

Going by the Nasscom annual survey for 2001-02, software has clearly emerged

as the winner with an overall growth of 27 percent. The domestic software market

grew by 16 percent compared to the 11 percent negative growth in hardware.

This is a superb achievement in a year that was marked by global slowdown.

The robust growth reflects the solid standing that Indian software enjoys across

the world.

For the first time ever, revenues crossed the $10 billion mark at Rs 48,000

crore compared to Rs 37,760 crore in 2000-01.

This achievement is a forerunner to reach that magical figure of $100 billion

by 2010.

$100 billion by 2010 is an ambitious figure but not an impossible one to

achieve. The Nasscom-McKinsey Study 2002 has anyway projected $77 billion by

2008. Thus, if the software majors push themselves harder, revenues are certain

to reach the landmark figure.

In fact, when global economy picks up, Indian software would be one of the

early gainers because of the strong roots that it has already established. With

TCS, Infosys and Wipro reporting heavy recruitment in recent times, it is clear

that Indian software organizations are equipping themselves for the upswing in

the economy.

Nasscom projects a revenue of Rs 60,700 ($ 12.3 billion) crore for 2002-03,

which is a cautious projection keeping in mind that global markets are still not

out of the woods. Given this figure, the growth would be roughly 26 percent

which is still very attractive.

Thus, DQCI’s power panel (see report on page xx) on the subject,

"Making profits through software" organized on the occasion of its

third anniversary on 12th July in Mumbai came at the right juncture. Software

exporters, solution providers and resellers indeed have reasons to smile, while

those in hardware frown!

The Nasscom survey results also reinforce the opportunities in ITES that we

have been repeatedly adovocating in these columns. ITES has been one of the star

performers with a heady growth of 67 percent during 2001-02. It has contributed

about 20 percent of the total software and services exports.

ITES will continue to make waves in the coming years and is in a position to

offer opportunities to serious partners who want to diversify into this field.

While customer care attracted 103 companies last year, ITES players can pitch in

for business from web sales and marketing, billing services and accounting

transactions.

Coming to the domestic software industry, the growth at 16 percent is lower

in comparison to 30 percent achieved in 2000-01. But even this growth in a

difficult year is certainly noteworthy. Partners need to watch this development

carefully especially those who are in hardware and are thinking in terms of

entering software business.

We concur with Nasscom’s pointers that when one enters the software

segment, the verticals that one should look out for include energy, insurance,

financial and banking services, e-governance and manufacturing sector. Indeed,

these verticals have the potential to lay the golden egg for partners inclined

towards software.

sylvesterl@cmil.com