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Editorial: Turning 30 and ready to change

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CIOL Bureau
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BANGALORE, INDIA: The IT industry has changed the way the world perceives India. The journey of this 30-odd-year-old industry has indeed been a fascinating one and, as I see it, every decade has had a distinct story to tell.

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It is a tale that highlights the enterprise and ingenuity of the Indian technology entrepreneur, backed by the capable and hardworking talent trained by our technical institutions.

The first decade–the 1980s–constituted the Onsite Era. The demand for talent was considerably low and limited to highly qualified graduates from premier institutions. These graduates were typically located onsite at customer locations and played an integral role in building IT capabilities within their organizations. Most of the work happened onsite with very few development and testing efforts managed offshore. Nevertheless, they built a sound foundation for global recognition of India’s technical expertise.

In the 1990s, we saw the birth of software factories in India. Thinking and designing still happened onshore. Indian talent was primarily engaged in coding, a critical task that required efficiency and accuracy. We proved that we were up to the challenge. We were able to respond to requirements collected onshore sitting in India and sent back increasingly complex codes. This was the time that today’s Indian IT giants started on their path of rapid growth. Most of their hires were fresh out of college and were willing to work really hard to make their mark. The best among them were rewarded with stints onsite and returned with greater exposure and understanding.

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Then came the Y2K threat. This presented a great opportunity for programmers to get exposed to multiple industry verticals, functions, and applications. It led to a tremendous growth in the awareness and knowledge of what the industry needed. Sitting anywhere in India, the average techie was exposed to processes, logic, algorithms and business domains as he/she pored through millions of lines of code. Armed with this knowledge, the industry could now start offering solutions. It took more risks and saw commensurate rewards in the form of wealth accumulation and job creation. The India story was well established!

The third decade starting in 2000 truly belonged to India. By now, the industry was capable of developing complete platforms and we became leaders in the IT services area. Most MNCs started leveraging India as their primary service delivery destination and leaders sitting in India started managing global organizations.

Today, as FY12 draws to a close, the Indian IT industry is all set to cross the revenue milestone of $100 billion! What started thirty years ago with Indians migrating to different parts of the world has come full circle with global customers seeking India out as THE destination for complete solutions.

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We are now at the cusp of the next stage of growth. The Indian IT industry is significantly commoditized today. Although Indian IT giants are at par with each other on revenue per employee, it is considerably lower than their global competitors. There is a need to move into a non-linear phase of growth where revenue and profitability are not tied to the number of employees but to the quality of intellectual property a company possesses.

Social Media, Cloud Computing and Big Data are moving us towards an Innovation-driven economy where ideation and execution are key and national barriers no longer determine our ability to compete. Consider these examples: Mobile apps can be built at home and can go viral in seconds. At Dell, when an Alienware customer complained online that a game was running slow, a Dell service agent put out a patch to help fix the issue. In less than 30 minutes, 1500 customers had ‘liked’ the solution — truly non-linear delivery of services.

I believe that the next ten years will be the era of products, innovation, and small companies. Success will lie in the ability to deliver meaningful, customized solutions with a clear link to outcome-based rewards. To keep up the momentum and win in the global arena, we will need our students–tomorrow’s talent–to be grounded in theory, exposed to business domains, and equipped with the know-how to build champion teams, operate in tough environments, and understand how to start and run companies.

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We, as service providers, need to transform our management systems and measurements to adapt to outcome-based rewards and non-linear growth. The government needs to draft policies which will encourage start-ups, protect intellectual property, simplify processes to make it easy to do business globally, and establish a friendly tax regime related to new modes of revenue streams like application royalty.

Looking back, it is fascinating to see how this industry has evolved and adapted. It is time for thousands of new companies driven by passion and innovation to emerge and transform the industry into its new avatar. It is time for us to take a new path.  

The journey has just begun…

(Ganesh Lakshminarayanan is President and Managing Director of Dell India and he is CIOL's Guest Editor for today)

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