THE INDIAN SOFTWARE INDUATRY-CURRENT TRENDS,CHALLENGES AND THE FUTURE

               The Indian Software Industry is the uncrowned king in the outsourcing of

software services now. Despite the current recession, which was always in the offing, once the boom got going, most software companies are facing the crisis head-on. They have shifted emphasis to off-shore projects since the on-site software development has virtually come to a standstill. They have started to scout for newer markets, improve on the per capita efficiency,concentrate on future technologies, revamp their organizational and marketing structure. In short the companies that are taking the slowdown as an opportunity to reorient themselves in the new scenario are creating the foundation for a long innings in the IT sector while those that are wary about taking the hard steps will soon find the going tough.

               From very humble beginnings, the Indian IT Industry has grown at an

exponential rate over the past 10 years doing Rs.10000 crore of export, fetching for India

valuable foreign exchange, propping up the Indian Stock Market with its share prices reaching dizzying heights before the scam, and employing over 2 lakh professionals with this number poised to rise to around 20 lakh in another 3 years. India missed the Agrarian, Industrial and the early Computer Revolutions but became a global player in the IT revolution because of two main factors-opening up of the markets and India's cheap and vast manpower with knowledge of English. Right from 1991 to 2000 Indian companies grew at a mind-boggling rate of 200-500% attracting lucrative projects from companies all over the world, especially the US. The recession that we see now is partly attributed to this phenomenal growth rate which to be maintained, was always going to be a tough proposition. The initial spark that triggered the recession was the slowdown in the American manufacturing industry , then aggravated by the collapse of Dotcom companies and then the last nail in the coffin was the sudden discovery that most companies did not have any more projects to h and out. In other words, most companies did not need any major software development.

             With the recession, most companies have drastically revised their organizational

and marketing strategies. The share of on site work has come down as most foreign companies prefer to sustain as much of their own employees rather than outsiders. Companies in India have now shifted gears doing off-shore development which is much cheaper. They have started  looking at the European and Japanese markets which have not yet been affected by the slowdown. Other markets which they are tentatively eyeing are the Australian, South American and Middle East markets. Most companies have decided to tide over the problem of reduced profits by resorting to layoffs and cutting down heavily on fresh recruitment. These are measures to bring down the numbers on the bench which have been increasing for some time now. The focus on web centric software development which used to be their prime revenue earner is a thing of the past and these companies are concentrating now on the banking and the egovernance sectors. Even the high flying companies are doing the low grade maintenance work for their clients to create good relationships in the hope of getting a big project from them sometime in the future.

              Despite the bravado that most software companies still put up it remains to be

seen how many of the smaller ones can survive, if the recession doesnt end soon. Fly by night

operators who wanted to make a quick buck from the high ratings software companies get in

the stock market along with poor quality of support which Indian companies provide are

destroying the credibility of the industry. Moreover the Chinese and the Russians have begun

warming up to the act. Their governments are aggressively promoting software training and

Chinese professionals come cheaper at $3000-4000 per year compared to an Indian

professional who earns on the average about $8000 per year. Another challenge that Indian

companies are facing is that most corporations prefer to keep the most lucrative projects for

their employees and leaving the crumbs for the Indians to brush up.

              But the future seems to be ours-that is if we are careful. Our companies are able to

provide the right training and have been able to continuously improve their knowledge base.

They have used the new technologies effectively winning customer satisfaction and we have

something the Chinese and Russians do not have-the experience in dealing with foreign

customers who are very quality conscious. The recession is on its way out. The markets are

looking up. The hype of yore will be a distant memory. To be realistic the software industry is going to stabilize at this point but opportunities will beckon soon. The weeding out is getting over. The dotcomers and Y2Kers have to swallow the bitter pill. The bottom line is they are not needed by the software industry any more. But for the others like u and me, the future is rosy, albeit a bit hazy, right now.

Technology could play a pivotal role in good governance says Nandan Nilekeni

Speaking at a symposium on Sustainable Transformation: Our New India's Pan IIT 2010, Dinesh Trivedi, Minister of State for Health and Family Welfare, emphasised the need for India to develop on all parameters and not just stark GDP figures. Happiness and welfare of all are important and especially for those below the poverty line. We need he said, to break the divide between the Haves and have-nots. Technology is good but should benefit all. In fact it is the responsibility of those technologically proficient to pass on the benefits to the rest of society. In keeping with his mood His Holiness Sri Sri Ravi Shanker, appealed to all Indians to use their energies, healthy body and mind for the benefit of all. Giving an example of an effort in the self same direction, Nandan Nilekeni Chairman of Unique Identification Authority of India (UIDAI) reiterated that technology, the UID No. could transform society at large. India, he held, has 120 million migrants today with numbers on the rise everyday. These sections' need to reap the benefits of social sector welfare schemes, but are often denied on account 'identification' documents. The issue currently is not that there is inadequate allocation of funds but one of delivery. The benefits have not reached the deserving. This despite the substantial increase in social welfare schemes in the last 10 years. All Indians deserve the fruits of good governance.

The pilot project, he informed has already been implemented in many areas of Karnataka. The allotment of the UID No. would empower the Indian citizen to operate from any part of the country. It would be single source enabler which would empower them for social security/welfare requirements. In its initial phase of 14 months close to 6 lakh+ people have already been covered. Set up along with the Government of India, currently the financials stand at 40 Crores. In keeping with the overall theme of the Conference, that of transforming through Technology, Nilekeni enlightened all that UID technology (Project Aadhar) would empower the common man and assist the Government in better governance. Efforts he also stated are on to network banks and other financial institutions into the UID system. Speaking on the role of the Government in not being able to lead India towards a truly transforming path, Shailesh Gandhi, Central Information Commissioner squarely stated that the though the will may be there, the structure and policies are not designed to deliver. He gave HR policies and practices as an example. What India requires today, India includes both the people at large and the Government, is to work together for a change, talent being plenty. For India to transform every Indian must feel he has stake in the Government.

Another important facet of the hurdles to transformation was vociferously brought out by Arvind Kejriwal, RTI Activist. In response to Pradeep Gupta, Chairman and Managing Director's, remark that corruption in India is no longer retail but is wholesale, Kejriwal agreed but at same time gave important positive suggestions. The Commonwealth Games exposed the shocking scale and arrogance of corruption. Media has already played its role and the citizens now need to voice their concerns and demand a single investigative agency with the power to act against all, politicians and bureaucrats' included. The current set up is bizarre. The CVC for example has 32 people to investigate 1500 departments. The closing session on 'Building a sustainable future: The Green Society' saw global leaders speaking on the way forward to build a green global society that could further sustain the transformational growth. Montek Singh Ahluwalia, Deputy Commissioner of the Planning Commission, said, 'There has to be a global agreement on the issue of climate change and only cumulative efforts could meet the green objectives. India's National Action Plan for Climate Change is taking necessary steps in liaison with the global community and drafting a way forward to reduce carbon emissions in India.'

Top Performing Commodities of 2010

Cotton

Unusually high cotton prices have prompted apparel makers to scramble for the increased use of synthetic and polyester fibres to keep down the input costs.
Cotton has registered a record 74% return in the domestic markets – a rise from Rs.25000 per candy to Rs.44000 in the past 10 months – led by shortage of raw material. Cotton can easily be termed as commodity of the year.
In fact, India – the second largest cotton producer in the world – could well be a major beneficiary due to rise in global prices of cotton, if the appeal made by cotton growers to allow export under the open general license is approved by the government.
However, economists see demand destruction for the next year if the record cotton prices refuse to die down for a longer period. Trade estimates suggest that India is likely to harvest 3.50 crore bales in 2010-11.

Coffee

Next in line of out-performers in commodities is Coffee – which has logged an impressive 45% returns in 2010. According to International Coffee Organization composite price indicator, currently the coffee price in the global market has topped 170 cents per pound compared to the average price of 121 cents per pound recorded in October 2009.
Moreover, global coffee supplies may tighten after an Indian exporters’ group forecast a delay in harvesting because of extended rains. India is Asia’s biggest coffee exporter. Further, the analysts tracking coffee prices expect the rates to continue inching higher until weather concerns ease in Brazil and Vietnam.
Overall, coffee exports during the January-October period of this year have risen sharply to 251,355 tons from 157,824 tons in the year-ago period. In India, the New coffee year – which runs from Oct’ 10 to Sep’ 11 – has started on a good note as coffee exports increased by a whooping 60% in the first month of the crop year.

Silver

Even as the yellow metal regains its Rs.20,000 platform, it is silver that is still touching all time highs at Rs.37, 700 per kg, a level never seen before. Silver surged to 30 year high in the overseas market as a weaker dollar increased the investment appeal of precious metals.
Silver prices for 2009 have risen like a phoenix from the financial ashes mainly on the winds of strong investment demand. Moreover, even in 2010, silver has yielded a decent 40% returns, propelled by confident resurfacing of industrial demand post the economic slack. On the other hand, gold has surged 21% during the 10 months period.
Bullion analysts are positive on silver indicating that the precious metal has barely made halfway back to its prior nominal high of $50 an ounce, achieved around early 1980s. However, despite industrial demand for silver, the real pressure going forward is from investment demand, which has been a fraction of that of gold.

Corn

2010 is shaping up to be a good year for the corn producers with the crop providing a good 25% returns from January to October period. In addition, signs of economic recovery point to a rebound in feed use, ethanol use and an increase in the demand for the corn.
The corn prices are gradually rising on speculation that US (the world’s biggest grower and exporter of corn) inventories will fall after adverse weather reduced Midwest output. To add to the crisis, China has emerged as a buyer of largest volume of corn from the US this year.
Analysts expect that a surge in global prices and a likelihood of a drop in domestic prices could help India seal more export deals in the coming weeks.

Nickel

Nickel prices have appreciated by 24%, driven by escalating demand from stainless steel industry amid tight supplies. Supported by firming trend in global markets and rising domestic demand from the alloy makers, nickel prices traded at Rs.1060 per kg.
About 2/3rd of the total nickel output is used in the manufacturing of stainless steel. Further, followers of the stainless steel market expect prices of nickel to remain firm over the next three years.