A good article on IT myth in India
Wanted: Out of the box thinking
Ask any well-informed person on the street about her impressions of the software industry and chances are she would tell you that we are a world leader in software services; the industry is doing extremely well; and if all our other industries performed as well, we would be one of the most developed countries by now. Face in the Mirror The Indian software industry is one of those feel-good stories that make most Indian hearts swell with pride. It is a story that has been told umpteen times. In 2002-03 the size of the Indian software and services industry totalled $12.4 billion, with exports accounting for $9.6 billion and the domestic sector $2.8 billion. The corresponding figure for 2003-04 was $15.9 billion, with exports amounting to $12.5 billion and domestic sales $3.4 billion. In 2004-05, the figures are estimated to climb to an industry size of $20.5 billion, with exports of $16.3 billionand domestic sales of $4.2 billion. Three Indian companies—TCS, Infosys and Wipro—have already crossed the billion dollar revenue mark, and several others like Satyam and HCL are waiting in the wings. They are also huge in terms of headcount: TCS (37000 approx), Wipro (37000 approx) and Infosys (37000 approx), and each day you hear not only of them but even smaller companies hiring by the thousands. But as someone once commented "Statistics are like a bikini. What they reveal is suggestive, but what they conceal is vital." So consider these statistics too. The revenue of Microsoft was $32 billion in 2003, and $36.8 billion in 2004. So that makes the entire Indian software and services industry less than half the size of just one global giant. Currently India's share of the world's software and services market is only 3.5%. We do not have any consumer or desktop software to our name. Big Question In a country so short of global success stories, whatever has been achieved by the software industry is remarkable. But the reality is that we haven't done anything earth-shattering. Let me explain. Save for IBM, there are not many well-known software companies from the pre-1950s still around; EDS was founded in 1962, but most of the marquee names in the global software industry came up in the 70s and early 80s: SAP in 1972, Microsoft in 1975, Oracle in 1977, and both Sun and Adobe in 1982. The Indian poster boys too came up in the same period. TCS was founded in 1968, Patni in 1978, Wipro IT in 1981 and Infosys in 1982. Today SAP, Oracle and Sun are all over $ 10 billion companies while TCS, Wipro Technologies and Infosys are $1 billion companies. Why such asymmetrical growth? After all, most of these Indian companies make their money from selling to the world, and therefore are in an equally good position to compete with their global corporate peers dollar-for-dollar. My hypothesis is that we as a nation are immensely adverse to risk-taking, and prefer the easy way out wherever possible. And this holds true as much for the average individual as for the big software companies. Why take risks, why innovate when there is so much easy (risk-free) money to be made?Just think: How many Indian parents would gladly accept their child not choosing a mainstream career like medicine, engineering or chartered accountancy, in favour of, say, sports or music? Even among the mainstream careers, how many engineers would say that they prefer the dust and grease of a shop-floor or construction site to the air-conditioned ambience of an office job? All through the 1970s and 80s, Indian software companies made their money by body-shopping. Their value proposition was simple: wage arbitration. If your American programmers charge $X to do a piece of work, our programmers can do the same at the same location for one-fourth or even less. With the coming of the internet and better network connectivity, the logical progression from onsite body-shopping was offshoring. If our programmers can do the same piece of work at your American location for one-fourth the price of your American programmers, let us do the same from India and we can lower costs to one-tenth. This continues to be the reigning mantra of the BPO industry. As long as a couple of variables are in place—our people have a certain basic level of knowledge, we have mastered certain processes for smooth delivery, and our wage levels are lower—this value proposition will work. Our software giants will go from the billion dollar mark to two billion to five billion to even 50 billion. And we will continue to uncork the bubbly. But the lingering doubt is: can we do better?Good, But Not Good Enough I would argue that Indian software industry is more a story of the lack of imagination, myopic vision, missed opportunities and plain lethargy. Why is it that none of the big Indian companies have been able to come up with a database product? In 1970 an IBM researcher Dr EF Codd published the paper titled A Relational Model of Data for Large Shared Data Banks. Based on this article, Larry Ellison and his associates founded a database product company that later took the name Oracle. Note that Oracle and Patni are near contemporaries. In the early 1990s, Linus Torvalds, a student at the University of Helsinki, released a new operating system called Linux. It was a little rough-edged in the sense that it did not come with the installation wizards of commercial OS like Windows, but then it was free for anyone to download and do whatever he or she liked. Several companies like Red Hat, Mandrake, Caldera, etc. did precisely that: they downloaded the software, added some tools so that non-techie people can install it easily on computers, wrote out help guides, and marketed it to the world. These days one regularly reads stories of how Linux is gaining ground and is poised to become a significant player in OS segment in the future. Why did none of our big guys think it worthwhile to create our own 'flavour' of Linux? Take another example—this time not of corporations but individuals—that demonstrates that we Indians have a serious lack of pluck. There is on the web a site called Source Forge that hosts open-source software projects. Software engineers can ut up ideas, invite people with specific skill-sets to join them, and start the software development work. Why do software programmers undertake such work? For most people it is out of a spirit of altruism, but there is an equal driving force in the challenge of creating something that can match the work of a commercial enterprise. It's like: if Microsoft can do it, so can I. There are about one lakh projects hosted on Source Forge and more than a million programmers work on them but there's very little participation by Indian programmers. Many years ago the founder of Apple Computers, Steve Jobs, while luring Pepsi veteran John Sculley famously asked: "Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?" The Indian software industry needs to ask the same question: do we want to keep making money, or do we want to change the world?
byProdyut Bora
The author is CEO,Brahmaputra Infotech

