IT growth around software, IP-led services

With information technology evolving with each passing year, organisations find it difficult to predict changes in this sector. The past few years have seen concepts like Cloud, Bring Your Own Device (BYOD), etc gaining momentum not only in the West but also in India. Also, the IT industry in the country, which is still mostly driven by the services companies, has seen very few product companies making their mark. Though things are improving, there is still a long way to go for these companies.

Amid these changes, how will the IT industry shape up by 2020? Will it continue to be the blue-eyed sector? Experts in the field spoke to DNA to gave their views on the future of the sector.
Till the last decade, IT industry grew at a whopping pace of 19-25%. However, with the increase in the base and the slowdown in UK and US, from where Indian companies get a lion’s share of their revenues, the growth in the sector slowed down to 10-15%. To continue to grow at this pace, the companies, however, would have to differentiate their services offerings.

A report by NASSCOM predicts that the Indian IT industry is expected to meet the lower end of its 11-14% growth. However, since different parts of the world economies and enterprises are in different stages of IT technology adoption and utility, the growth phase of the IT industry will witness variation, feels SK Jha, MD and CEO, AGC Networks. For example, in India, a majority of CIOs are looking at cutting costs in their IT investment in 2013 but we see a lot of growth potential in Middle East and Africa.

“It is natural for the services industry to grow slower as the base now is much larger. Hence, the companies will now have to focus on business transformation with traditional services getting more and more commoditised. Even consulting-led solutions will dominate,” says TV Mohandas Pai, chairman, Manipal Global Education and former member of the board of directors, Infosys.
According to Ramandeep Singh, CEO, Calsoft Labs, Indian IT companies will emerge as a strategic partner for their clients in driving business growth in several industries like manufacturing, retail and healthcare. Supporting Pai’s views, Singh says IT companies are likely to get more specialised in certain industries and domains and collaborate with others to achieve extraordinary results, adding that there will be greater linkage between performance and compensation.

Though the country still can’t boast of too many IT product companies, the situation is much better than what it was a few years ago. Going by the trend, experts believe that product companies will have a much bigger role to play. “The IT product companies would drive growth in future. For instance, e-commerce is seeing very high growth,” says Pai.

Anand Naik, managing director-sales, India & SAARC, Symantec, feels there is a huge opportunity for product firms to provide differentiators that enable the business. “We have over 4,000 employees in India and continue to remain committed to the country not just as an R&D or engineering destination, but as a significant market for our products,” he says.

Many feel in India, future growth will be definitely around software products and IP-led services. Thus, companies having business around this model are expected to perform better, according to Sairam Vedam, AVP- marketing, Cigniti Technologies. “We believe in IP-led testing services, innovative delivery models that leverage the cloud, next generation mobility labs and infrastructure. This has helped us offer better value to clients, " he says.

“When it comes to the IT industry, the devices will add on to the services they provide and hence devices and services shall share a symbiotic relation. With technological developments, we are committed to innovate and evolve and this is evident from all our innovations. This is an ever-going process where new products will be introduced every year,” says Subrotah Biswas, country manager - India and South West Asia, Logitech.

India's economy has grown at a significant pace over the past 10 years. Expecting that the growth momentum will continue at a good pace, IT can play a significant role in areas where demand-supply gaps exist.

Suprakash Chaudhuri, acting managing director (India), SAP, feels IT can play a more important role in areas like healthcare, financial services, education and public services. “Traditional models have been ineffective, slow or expensive in increasing access of people to all the above four areas. IT solutions can enable new service models that can overcome the limitations in the traditional models,” he said. For instance, in the healthcare sector, 50% of Indians still do not have access to primary healthcare. Technologies like telemedicine can provide it at a reasonable cost.

Even in a sensitive area like defence, IT would have a major role as future wars will be fought by robots, drones and missiles. All this will need huge IT support.  According to Informatica, a Nasdaq-listed data integration company, organisations and departments will continue to seek alternative cloud-based solutions to address business challenges.