The past year has seen two kinds of trends in technology journalism in India. The first has been to lament the death of the great American opportunity in it services. This opened up several avenues of writing for unimaginative journalists (some work for this magazine, but the proportion, small mercies, is lower than the industry average): of how tech companies were cutting costs, laying off people, diversifying into new markets and product segments, ignoring chances to 'go up the value chain', a favourite phrase in the Indian it industry circa 2000, and jumping into the it-enabled services bandwagon (call centres, business process outsourcing), sob, sob. The second trend has been to write about emerging stars: companies born in the throes of the trough that have what it takes to become tomorrow's Siebel Systems, Intel, Microsoft, or Infosys.

Nasscom's recent announcement on the performance of the Indian software industry, and the reaction it provoked in the media-some bullish, some bearish-should be seen in this context. The numbers, for those who happened to miss out: the industry registered a turnover of Rs 36,500 crore in 2001-02; it services comprised 81 per cent of this; and it-enabled services 19 per cent. And while it services grew at a modest 22 per cent, it-enabled services did so at a rapid 71 per cent. Worryingly, billing rates declined. From $60-65 an hour to $55-58 an hour for onsite work, and $28-35 an hour to $18-25 an hour for offshore work. In 2002-03, Nasscom expects it services to grow at 22 per cent again.

So, what does one make of the numbers, especially in the light of the financial results of three it biggies, Infosys, Wipro, and HCL Technologies. The first, which hopes to increasingly become a consulting company a la Accenture, saw its revenues grow by 37 per cent in 2001-02 and expects 17-20 per cent growth in 2002-03; the second, which was widely perceived to be more resilient than other companies because of its focus on the 'technology services' space, grew at a more modest 12.35 per cent in 2001-02, and did not give a guidance for the year; and the third, which is widely perceived to fit somewhere between Infosys and Wipro in the technology hierarchy, grew by around 6 per cent in the first nine months of the year (the company closes its books in June).

Those are the plain facts. And they should, surprise, surprise, bring cheer to Indian companies. Here's why. One, billing rates are bound to decline: heard of any technology product where prices go up? Two, the it outsourcing business will remain offshore-centric. The offshore business grew 70 per cent in 2001-02 (onsite grew a meagre 10 per cent), and Indian companies are well posed to leverage this growth. Three, the high-end 'technology services' market in the US is currently going through a dip-largely caused by the sub-optimal structuring of the telecom industry where standards are still emerging. Once this sector looks up, companies like Wipro and HCL, which have significant exposure to the technology space will see their business improve. Four, India's software biggies are far from dead; the top 10 software companies accounted for 73 per cent of the growth in the sector in 2001-02. And five, the domestic market for software solutions should, sooner than latter, blossom. For instance, India's booming telecom market-50 million cellular connections and 100 million terrestrial ones by 2005-06, up from around 6 million and 34 million now-presents an opportunity for information technology services companies focussed on that space.

No other market, with the possible exception of China, is as attractive. Last word: translate the numbers into dollars and present it to an American CEO. A 22 per cent growth on a base of $8 billion would make the best of them drool.