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The 10 hottest infotech trends to watch out for in the Indian space this year.
1) Application Service Providers. As the death-tally of dotcoms mounts, survivors will have to quickly, and radically, transform their business models. Exodus founder K.B. Chandrashekar has been close to strident in his calls for dotcoms to graduate to Application Service Providers (ASPs). And perhaps to show that his money is where his mouth is, Chandra's new venture (which has already been profiled in Fortune and Wired) is an asp, Jamcracker (named after specialist lumberjacks called in to relieve streams of logjams). 2001, BT predicts, will see several Indian dotcoms trying their luck in asp-space. Not all will survive, but it's still a trend to watch out for.
3) E-Learning, or all about online varsities. It's hard to fight with facts. Indians are obsessed with education. Actually, to change that statement into something more representative of the times we live in, Indians are obsessed with computer education. Companies operating in the education space like NIIT and Aptech have actually managed to establish a presence in countries like China and Malaysia. Both have also ventured into cyberspace with online educational centers. The year that is to be will see several other companies venturing into the business of e-learning. And-here comes the sting- some of them will actually find takers. 4) Convergence. Fine, everyone has been speaking about convergence for at least the last couple of years. With the number of households with access to cable television (40 million) exceeding those that have access to phones (25 million) or those that own PCs (five million), convergence, as the pundits have been saying, is a phenomenon-in-the-making. Why does BT think it will finally happen this year? Well, take a look around you and see the number of companies offering network television plus cable television plus internet access plus... through their just-laid broadband networks (also the subject of an item titled Them Mean-Old OFC Blues in this section). 5) Ubiquitous Internet Access. Blame it on broadband, or on the dozens of Internet Service Providers luring customers with tough-to-say-no-to freebies, but connectivity is set to explode. Today, there are less than a million homes that are connected to the internet; by the end of the year, estimates IDC, this figure will be more than doubled. And with the GOI making noises about allowing ISPs offer toll-free dial up access, Netopia could be just around the corner. Remember, you read it here first. 6) M-Commerce. Accepted, we may be stretching things a bit, but with a few banks already offering m-banking services in Delhi and Mumbai, it is better to cover the bases rather than end up with egg on our faces. Consider these nuggets of information: the GOI will issue 3g licenses soon; several cellular service providers are upgrading their networks to the General Packet Radio Switching (GPRS) standard which will ensure faster data-flow through mobile networks; most mainstream sites are WAP (Wireless Access Protocol) enabled; and everyone concerned seems to have realised that the essence of m-commerce is 'being local'. Let's look at it this way: if m-commerce doesn't take off this year in India, it probably never will. 7) Chip-Design. It's going to be all about India Inside this year. Application Specific Integrated Circuits (ASIC) and Very Large Scale Integration (VLSI) design is going to be the next frontier, and India is right there at the bleeding edge. Even today, when you buy a Motorola cellular phone, or a Philips plasma television anywhere in the world, chances are, the design and the software of the chips at the heart of these products have been made in India. With anybody who is somebody internationally in chip-design setting up their design centres in the country-nearly seven, including Texas Instruments, IBM, National Semiconductor, and several others like Analog Devices and Philips Software are the latest to do so-this is one trend that is certain to accelerate. 8) Wireless Devices. We'd love to tell you that, courtesy Bluetooth, your refrigerator will soon be able to speak to your microwave. That, though, is unlikely to happen in India. (It's also unlikely to happen anytime soon in the developed world, but that's another story). However, Bluetooth is certain to provide Indian software companies with a lucrative business opportunity, one that is already being explored by infotech heavies like Wipro and Mindtree. 9) Internet Access Devices. With the cost and the complexity of the personal computer being the largest hurdle in the way of universal connectivity, internet access devices should have taken off some years ago. Still, with glitch-free set-top boxes finally available (and ready to complement access through cable), techno-phobes and Luddites could well realise their dream of an easy access to the information highway this year. 10) Falling PC Prices. This is a no-brainer. PC prices seem to have a life of their own, one that follows Moore's Law. In 2000, the number of PCs sold in India exceeded 1 million for the first time-ever. Most companies operating in this market believe there is only one way for the market to go (up), and one way for prices to go (down). -Venkatesha Babu P A R A D O X E S The broadband-triggered OFC boom hasn't delivered expected results for the companies. The furious digging (up) of roads is an integral part of the Indian ethos. If it's not water pipes, it's sewage ones. If it isn't telephone cables, it's electricity ones. And if it's none of the above (and not some roadwork either), it's OFC. From the outside, the Optic Fibre business looks great: there is limited domestic competition, each passing day brings with it announcements from some large corporate about entering the broadband domain; and global prices of the commodity are, after several years of lingering in the horse latitudes, finally on the way up. The twist in the tail? Not all Indian companies operating in the area are doing as well as one would expect them to. True, companies like Sterlite and Aksh Optical are increasing capacities-the former from 1.5 million cable km to 8 million cable km over the next one year; the latter doubling capacity from 1.2 million cable km over the next six months-and wannabes like Hindustan Cables Ltd. (the other HCL) Finolex, and Optel have announced their intention to get into the manufacturing business, but for others like Birla Ericsson and Vindhya Telelinks, the OFC-boom has meant little. One reason could be the fact that companies in the last-mentioned set do not manufacture OFC in any significant quantity. Instead, they source OFC and resell it after adding some notional value like packaging and coating it with protective cover. Says Ashok Panjwani, CEO, Sterlite: ''Fibre accounts for close to 70 per cent of the cost of OFC; there's no room in the industry for cable companies.'' With a reduction in the import duty on OFC from 35 per cent to 15 per cent imminent, things look bleak for the non-manufacturers. Everything isn't perfect in the manufacturers camp either: Reliance, which plans to wire up 115 cities over the next three years, plans to use OFC of a quality that isn't manufactured in India. Worse, analysts estimate that just about 30-40 per cent of domestic demand for OFC is being met right now. With estimates for demand in the year 2001 hovering around 3 million km, and with Sterlite and Aksh deciding to go ahead with their plans to export over 50 per cent of their output next year India could well find its dreams of a wireless future cut short by the shortage of, well, wires. -Ashutosh Sinha
E - T A I L I N G A late spurt sees the US more than double its on-line holiday season sales of $5.2 billion in 1999. Here in India... If shopping season in the US starts with Thanksgiving in November and lasts up to January 1, in India it starts with Navratri in September, spikes several times to coincide with Diwali, Ramadan, and Christmas, and tapers off towards the new year. So, Gautam Takhar, the Chief Marketing Officer of Baazee.com, is merely stating the obvious when he says: ''Indian buying patterns are different from western ones.'' All well, but what of the volume of business generated? Most Indian b2c sites refused to give numbers; indeed the only absolute number this correspondent encountered was the 15,000 copies First andsecond.com CEO G.B.S. Bindra boasts his company sold in the course of a single day. Qualitative quotes on performance were forthcoming and all the companies BT spoke to claimed that more people than was usual registered at their sites during this 'festival' season. K. Vaitheeswaran, the Vice-President (Marketing) of Fabmart went a step further: ''Average order values jumped significantly. This means that customers who are used to shopping online and have had a positive experience are beginning to use this for bigger purchases and relying on this new medium to complete their festive shopping.'' And, expectedly, some part of the business generated came from non-resident Indians gifting high-value products to their brethren back home. With most Indian b2c sites indicating that the third quarter of the year (October-December), which coincides with the Indian festival season and the US holiday season, was good for them, there's enough evidence to suggest that there is, after all, such a thing as an online Diwali. The question is, do the absolutes add up to anything significant? Is there a Santa Claus? -Vinod Mahanta
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2) IT-Enabled Services. Purists may
sneer at businesses they term techno-coolies-medical transcription and
transaction processing back-ends and call centres-but there's no denying
the fact that companies operating in this area do help bring home the
moolah. Indeed, the National Association of Software and Service Companies
(NASSCOM) estimates that these businesses account for $460 million of
software exports already, and will form a critical chunk of the
$50-b-exports-by-2008, that the association's President, Dewang Mehta
keeps talking about. This year could mark the emergence of these
businesses into the infotech mainstream.