IT industry outlook 2014: Progress Software

SINGAPORE: Here is the outlook for 2014 for the Indian and global IT industry from Progress Software.

On 2013 overview

The IT industry did very well this year. As recently announced by the IT department, we saw around 26 percent growth. A very visible growth in terms of new buildings being occupied and also the number of jobs created. We did see a lower than possible growth of new companies coming in and establishing offices; but no material impact given that most companies that have to establish offshore operations in India have already established and this is a very small part of the industry and industry's growth.

The industry has actively worked on improving efficiencies over past few years- specifically in terms of reduced bench, increased utilization of resources and IP leveraged services. All of which are required to ensure we remain sufficiently profitable given increasing costs and unchanging billable rates. The dollar-rupees exchange has given some additional time cushion to these medium- term efficiency improvement measures. Additionally, industry has made very good progress towards long-term growth sustainability that is possible only thru products and IP.

The services industry is looking at higher value services and IP leveraged services. Besides this, the startup culture is rapidly gaining traction with better ideas, teams and execution generating startups with a lot of promise. As seen at the recently concluded ITsAP annual products and startup awards event, and the TiE TES summit. And the increasing number of incubators in the city including those at premier institutions like IIIT-H, IIT, BITS and ISB are proving to be very serious enablers. We are getting into 2014 on a very strong note with lots of promise in clear sight.

On outlook for 2014

Some of the guarded optimism from last couple of years may ease a bit as there are no red flags in any major part of the world which is a strong start to the New Year. With worldwide economy showing a more positive outlook, this bodes well for the IT industry in India.

In Hyderabad, specifically the flurry of activity in the tech startups space is adding a very nice silver lining to the industry. With some serious traction and results beginning to show up, I expect 2014 to be a seminal year in how startups evolve in Hyderabad.

On 2014 for the state post bifurcation

The IT industry is very global in nature with linkages more outside the country than inwards. Already the industry is well established in at least five major cities- NCR, Chennai, Hyderabad, Bangalore and Mumbai and many tier-2 cities all spread across the country. All employing a very talented and mobile work pool from all over the country. All working on clients spread across the globe and even domestic clients from across all states and the center. In such an industry, the status of a state or a city is never of any material impact.

However, the continuing political uncertainty is restraining some of the wild growth otherwise possible in this city with strong industry base, active government support and fantastic infrastructure. Hence, once political certainty sets in, we will see some additional growth.

On 2014 strategy

We are a global company. So, no particular state has any impact on our plans. India as a market is strategically important for us. Presently, we are primarily a product engineering operation in the country. We are already engaged very actively on all our strategic initiatives including the new cloud platform that we are building.

We also actively engage with the product startup ecosystem and specifically the academic incubators and research led product ecosystem. We will continue to foster and help the technology startup ecosystem in the coming year.

Technology trends in 2014

* Continued improvement of efficiencies in services delivery through better resource utilizations, leveraged projects and more IP/frameworks play.  

* Mainstream traction for the new convergence of analytics, social and mobile on the cloud.

* Continuing growth of technology startups; leading to better and bigger successes in the markets and amongst investors.  

The author is VP and MD, Progress Software, Singapore.