Ganesh Natarajan's Blog

A quarter ends

2013-07-01T10:34:00.002+05:30

The first quarter of the Financial Year 2013-14 has ended on a note of more uncertainty than when the year began. Global economies continue to be sluggish, the tapering off of QE 3 ( Quantitative Easing or the Bond Buying program in the US ) has caused occasional tremors in the US markets and flight of capital from emerging economies like India.

The resultant rapid depreciation of the rupee ( it even touched 60 briefly last week ) is bad for the Indian economy which is already plagued with sluggish economic growth. However it could be good in the short term for exporters and I am sure many results this quarter will show that impact.

However there are dark clouds over Indian IT too. The passage of the Immigration Bill in the Senate is causing some trepidation since this will at a minimum increase visa costs and in the extreme case cause a fundamental change in the employee mix and the business models of Indian companies in our main market.

There is still time - a more sensible version of the Bill is likely to pass the House of Representatives and the real action will start when the two bill versions have to be reconciled before the House and Senate clear them again and the President signs it into Law !

Interesting times lie ahead for all of us !

Ganesh

The problem of being Narayana Murthy

2013-06-03T09:00:00.003+05:30

If you are NR Narayana Murthy you need to have the Midas touch. A company you created with a bunch of friends and built with vision and values has fallen a little out of step with the world of IT and lost out in the pace of change to competitors like TCS Cognizant and even HCL.

The problem today is that the world has changed. The SMAC ( Social Media Mobility Analytics & Cloud ) revolution has changed motivations though it hasnt resulted in big contracts yet. And you need a deep understanding of the new world and yet retain the capabilities in traditional areas to succeed.

Can Murthy do it - of course he can ! How long will it take him - only time will tell. But here's wishing him al the best !

2013-04-29T17:43:00.002+05:30

India Summit – many questions, some revelations!

The Economist is arguably the finest magazine in the world with its outstanding coverage of world events and commentaries on the economy, politics and every aspect of the dynamics of the world we live in. And the India Summit held in Delhi end April not only lived up to the hype but met most expectations of the hundreds of CEOs, academicians and thinkers assembled to understand the state of our nation – India !

The biggest note of confidence was struck at the inauguration itself by none other than Finance Minister P.Chidambaram, whose confidence that the fiscal deficit would be contained to about 4.7 % by the end of the current financial year quickly caught the attention of tweeters and the hordes of electronic media assembled in the room. The current account deficit continues to be a worry though the recent decline in oil and gold prices and the slew of initiatives to boost exports should provide some relief. The FM’s confidence that the GST would receive a thumbs up from the states and there was a seventy percent chance of it being implemented in the current term of the Government and his downplaying the impact of the new land bill and the absence of labour reforms ended the session with the feeling that it was only political grandstanding by the opposition that could come in the way of India’s climb back to six percent plus growth in the current year.

A note of caution was immediately struck by former Chief Economic Advisor to the Government, Shankar Acharya who accused the Government of completely losing control of the macro-economy after 2008 with its increase of subsidies from 1.5 to 2.5 % of GDP and the warning that the political grandstanding combined with poor pace of land and labour reforms would put the economy in a cul de sac! The weak infrastructure with its resultant impact on manufacturing was stressed by FICCI President and HSBC CEO Naina Lal Kidwai while the Chairman of the Economic Advisory Council to the Prime Minister C.Rangarajan put on a brave face and downplayed the impact weak supply side responses could have on inflation once economic growth picked up again.

Two successive industry panels, on Education with Rajendra Pawar of NIIT and Shantanu Prakash of Educomp and Industry with Sunil Munjal of Hero group and Malvinder Singh of Fortis failed deliver any answers to the questions raised by the economists as well as many of us the CEO participants during the day and it was left to Shashi Tharoor in his inimitable style to add a touch of class to the proceedings with his positive comments on India’s role in the world. He did add a word of caution though by stating that youth in 165 out of 625 districts in the country were already frustrated with the lack of job creation and “falling prey to the blandishments of the gun”. A timely warning that economic growth must lead to job creation and enough skills initiatives must proliferate to avoid the disintegration of the demographic dividend into a demographic nightmare for the country!

If there was one complaint one could have about the summit, it was the absence of political leadership from the opposition and the lack of focus on the services industries, but overall the sessions were excellent and it was a day well spent in the national capital! The Indian economy is at a crossroads and while there are signs that the economy has bottomed out and will grow again, albeit slowly, there is much that has to be done to return to the heady years of eight percent growth on a consistent basis!

A new Sholay unfolds

2012-09-26T15:58:00.001+05:30

It has all the build-up and drama of a blockbuster Bollywood pot boiler and is reminiscent of the Sholay saga that many of us feasted on! A valiant Prime Minister supported by robust rural growth weathers the monster called the Recession of 2008 and India emerges in 2009 as the only economy to remain relatively unscathed by the economic slowdown. But after this the government has to beat back successive raids on its credibility by the dacoits of the 2G scam, the Commonwealth Games fiasco and most recently Coalgate. The Prime Minister, his reputation battered by the successive scams and the attacks on his government by critics like Team Anna, the foreign Press and even his coalition friends had seemingly lost the ability to take the fight to the opposition and one cartoonist interestingly depicted the whole economy spinning into a cesspool from which there were dim chances of recovery.

But even as the Bollywood movie Sholay saw two new heroes come into the act to support the protagonist, twenty-four hours of seemingly unconnected but highly timely acts have brought new life to this government and renewed cheer to India watchers as well as the business community in the country. The announcement of the new US Quantitative Easing programme—QE3 brought cheer to the global stock markets one Thursday evening and the raft of initiatives—rise in diesel prices, reduction of handouts and subsidies, FDI in retail and aviation and aggressive disinvestment announcements have demonstrated clear intent for fiscal consolidation.

There is also a strong expectation from India Inc that the Reserve Bank will come to the party and provide the much awaited rate cut and align the monetary policy to the growth agenda by cuts in the cash reserve ratio and other initiatives. The recently reinstated finance minister has hinted at “calibrated risks” which augur well for monetary and fiscal policy announcements that will lift the mood of industry and consumers before the Diwali spending season and pave the way for employment pickup and renewed economic growth.

However, the Sholay analogy does not end there. The heroes of this drama, the finance minister and commerce minister, having fired the first volley of economic bullets will have to be on their guard against the ability of their many opponents to damage their credibility by raising the ire of the voting public. Let us not forget that corporate or middle class India is not really the constituency that any politician looks at. The twin demons of the diesel price rise with its resultant impact on the inflation level which is already trending at much higher than predicted or desirable levels and the expected opposition to the opening up of multi-brand retail because of its likely negative impact on manufacturing as well as the neighbourhood “kirana” store will be used in street agitations and television rhetoric to threaten the downfall of the government and it will need steely resolve and a genuine “if we go down we will go down fighting” approach for the bold moves to result in actual success.

For the IT sector in India, these are interesting times and there are enough indicators to watch out for. The strongest ever single session rise for the rupee against the dollar in recent times has the potential to rain on the parade of exporters if the rupee, widely expected to touch 60 by end of the year, goes the other way and touches 50 instead. However the good news is that if both government and industry spending revives with the “feel good” factor giving a boost to market capitalisation and consumer and business to business industrial demand, the propensity to invest in productivity and better IT solutions will come back into contention.

The biggest beneficiary of a sustained economic resurgence will of course be the tens of millions of job seekers who have been despairing about the weak availability of jobs in the IT sector and the literal stoppage of recruitment in most other sectors of business and industry. Speaking at multiple seminars for human resource managers and academic institutions in the last month and more, the despair I have seen has been palpable and fundamental questions have been asked about the seesaw game that is being played between investment in people and protection of profits. In a growth economy, the people factor will provide the “lift” that is needed to build higher capabilities and increase India Inc’s competitiveness in global markets.

There has been an enthusiastic response from the CII and corporate chiefs, despite the skepticism in some quarters of the impact of these moves on the power and infrastructure sectors as well as the muscle the protagonists will show when faced with the political counter attacks of various parties. However we live in hope that India will rediscover her 8% growth in the not so distant future.

The logjam in Parliament

2012-09-04T11:59:00.001+05:30

The logjam in Parliament

I spend fifteen minutes in the Rajya Sabha yesterday watching my friend and new member of Parliament Anu Aga sit on a lonely bench with a few Congress folks on the treasury benches and a dozen ot so BJP folks on the other benches. To a script , when the house commenced at 2 PM the BJP folks walked into the well of the house chanted slogans asking the PM to resign and got the adjournment.

The same farce is being repeated for two weeks and the nation has a paralysed Parliament to add to its woes of corruption, high inflation and weak economic growth. An opportunity lost ?

Ganesh

A great quarter for Zensar

2012-07-26T16:58:00.002+05:30

We have announced the results for the first quarter of FY 12-13 and I am pleased to share that the consolidated revenue for the quarter shows 36.5% growth year-on-year. Q1 has been an excellent quarter and demonstrates the robust and risk mitigated nature of our business. Our strong focus on key verticals, diversified geographies and innovation in all our services has enabled us to weather the storm that is affecting the entire sector. We are confident that we will meet and exceed the goal of 18 % growth in Full Year 2012- 13.

Consolidated results for the quarter ended June 30, 2012

1. Revenues grew Rs 544.32 Crore for the quarter ended June 30, 2012; with a YoY growth of 36.5%

2. Net profit after tax was Rs 54.58 Crore for the quarter ended June 30, 2012 with a YoY growth of 101.7%

On a QoQ basis, Zensar’s revenue grew 10.2 % with focus verticals of Manufacturing and Insurance growing by 15.7% and 16.6% respectively. Net Profit grew 38.8 % QoQ.

Zensar has reported 20 new wins in this quarter some of which are multimillion dollar contracts across verticals. In the Manufacturing vertical, we have bagged a large deal in R12 implementation and Master data management with one of the largest private electrical contractors and one of the world’s largest clothing Manufacturers based in the US. Retail vertical continues to do well by adding one of the leading specialty retail stores for children’s apparel in USA for an Oracle R12 upgrade. Zensar will also support a leading bookstore chain in the Asia Pacific region in the areas of supply chain management and SDLC and function as their extended IT arm. Another significant deal was signed with an eminent accountancy body in South Africa for a project on IT support and integration, in the Financial Services group.

Zensar has entered into a strategic, multimillion dollar deal in Infrastructure Management with one of the leading worldwide providers of enterprise-class, cloud-enabled hosting, managed applications and services based in the US for a project on Data Centre Migration. Another deal was signed to deliver mission-critical, IT infrastructure services to a leading provider of private student loan credit unions, and schools in the US.

The industry continues to recognise the strides we made been making and for the second time in a row, Zensar has been featured amongst the top 12 Indian IT companies in the latest 'Global Outsourcing 100' compiled by the International Association of Outsourcing Professionals (IAOP).

    These are difficult times for the economy and for the industry but our success this quarter gives us the
    confidence that we can forge ahead

    Ganesh

Towards the Olympics

2012-07-16T09:01:00.003+05:30

Saina Jwala Ashwini Abhinav Gagan Leander Sania Mahesh Deepika Mary Kom and wrestlers and weightlifters- the list of medal possibilities from India is growing every Olympics !

Congratulations to Deep Sethi for his Go for Gold initiative that got the powers that be in Indian sports to wake up

Now lets wait and watch !

Q1 Results Reason

2012-07-10T14:59:00.000+05:30

Folks

Its always fun the week of the first results announcements for a quarter when no analyst knows quite how to call it - will TCS and/or Infosys spring a positive surprise on the 12th for the IT sector ?

JP Morgan talks about both secular headwinds and cyclical forces combining to exert pressure on the industry but also states that is is difficult to guage how much of the current slowdown is cyclical and how much structural ! While discretionary spending is likely to be low and large financial institutions could be approaching saturation in their Application Development and Maintenance spend, they believe a wave of spending on regulatory compliance and risk management could be a powerful offsetting driver in the BFS space.

The lesson for all of us in the industry is to be watchful but optimistic. While head winds abound, there are enough opportunities as well !

Ganesh

Industry outlook - June 2012

2012-07-06T16:40:00.002+05:30

The week ends on an optimistic note - Europe is stable, America hasnt sounded any more outsourcing warnings, the Indian PM is on a roll with his positive announcements - IT industry results start rolling next week - hope all the surprises are good ones !

On a recent interview with CNBC, I had to stave off a series of alarmist questions ? Will the "Move jobs to USA" bill be the death knell of outsourcing ? Will the US Government's intention to ask all software companies to do the work only in America be a deterrent ? Will NASSCOM have to downgrade its growth outlook for the industry further ?

At this point, I said and I reiterate here, there are no really negative signals anywhere. The industry is healthy and is still the best place for competent and ambitious young people to build their careers. Its not going to be an easy next nine months but then fortune favours the bold !

Enjoy the ride

Ganesh

2012-05-19T11:46:00.001+05:30

We are passing through a critical phase in the global economy. The potential exit of Greece from the Eurozone and the cataclysmic fallouts this could have on the global financial system is already sending tremors through India with the rupee in free fall and an austerity drive announced by the FM.

In all this climate of uncertainty, what do we see on TV ? The unseemly fracas over Shah Rukh Khan and Sid Mallya in post IPL action, the walkout of Mamta Banerjee from a Reality TV show and of course the justifification of a 100 B USD valuation for Facebook. Nice bit of escapism but is anybody looking out for the Indian economy ?

I am off to the US for three weeks - more in June !

Proud Indian proud of our Parliament

2012-05-13T17:05:00.000+05:30

Leadership

2012-05-11T16:09:00.003+05:30

Leadership in turbulent times was the topic of a symposium organised by the CII in Bengaluru this week. Excellent speakers including Ravi Venkatesan former Chairman of Cummins India and Microsoft and Sehasayee Executive Vice Chairman of Ashok Leyland delivered some gems

Leadership is all about have an ambition to to take a country or a business to the next level and having the courage to take necessary actions. As Ravi rightly said, if you dont have either, the best thing to do is to get out of the way

What do you all think ?

Results & beyond

2012-04-27T17:49:00.000+05:30

Folks

Zensar has announced the results for the Fourth Quarter and the consolidated Annual Result of FY 11-12. I am pleased to share that the consolidated revenue for the quarter shows a 32% growth year-on-year with a Profit Before Tax growth of 62% year-on-year. Due to currency volatility and higher tax rates this year our last quarter profits after tax have been lower than the third quarter but the business fundamentals remain strong. The consolidated revenue for the year shows a 56.6% growth year-on-year with a Profit After Tax growth of 20.5 % year-on-year.

During the year, Zensar’s Retail Portal Solution for B2B collaboration, won the prestigious ‘Best Industry Solution Award’ at the national competition held by Computer Society of India (CSI). AutoZenics, a hosted on-premise solution deployed by leveraging a Hosted ERP solution on the cloud for the Manufacturing industry was also recognized by CSI in the product manufacturing category. We won the National Award in IT Excellence and Excellence in Global HR Strategy at the World HRD Congress 2012, which recognizes exemplary HR practices in talent management. We have also received the prestigious Service Excellence Award at the Cisco Supplier Day in San Jose, CA, amongst other significant technology services providers, and won the CNBC International Trade Awards for the fifth consecutive year.

There is a lot of concern about the future of this sector but I am sure strong companies will continue to do well !

Ganesh.

An optimistic start to the new financial year !

2012-04-23T12:55:00.000+05:30

A whirlwind two week tour of seven cities across UK and US and meetings with clients reinforced the feeling that business confidence remains strong and the likelihood of a second recession has receded in the first few months of this calendar year. The voices being picked up by our sales teams across the globe also do not reveal any reason to panic with robust business inflows happening, not just in the West but also Australia Asia, Middle East and Africa. Big ticket projects may be put under the microscope particularly in the still sluggish Financial Services and Retail segments, but lights on spending and smaller projects particularly in the Cloud, Social Media and Mobility space will not be denied this year. The weakening Indian Rupee too will help in shoring up profits or providing the latitude to Indian IT and Business services exporters to invest in better marketing which is a good thing in a sluggish market. So what if anything can stop Indian IT from posting a high teens growth percentage for FY 13?

In spite of the twenty-three percent growth guidance given by new industry darling Cognizant and the recent upgrade in Accenture’s guidance, industry analysts like CLSA are a little wary about the growth prospects of the larger Indian providers due to the higher visa rejection rates particularly in the US and the higher “Requests for Evidence” that creates significant delays in application processing. The L1 visa rejection rates for Indian companies jumped to over thirteen percent in FY 11 in comparison to an annual two percent three years ago, while the rate for most other countries remains between two and three percent, clearly a case for a discrimination discussion by the Indian Government.

My personal optimism is boosted more by the mood one can see across the US. Tech unemployment is almost non-existent and with both Indian and US firms stepping up their local employment drives, CIOs are also discussing new ways of reaching out to customers and optimize supply chains, the kind of discussion we always prefer to cost reduction and “doing more for less”. In fact the jump in apartment rentals in Silicon Valley suggests that innovation is alive and kicking, which will also spur CIOs particularly in B2C sectors to accelerate their spending on enterprise social media and mobility.

Whatever be the growth rate we finally see, one thing is sure and that is the diversity in employment we are seeing in the ranks of Indian IT firms. Ten years ago I remember inaugurating a sales meet of our company in Las Vegas and chatting with the coupe of American salespersons in the audience. This time the company sales kick-off in Cape Cod saw eighty Americans and Europeans outnumber the twenty Indians. Coming on the heels of our “all hands” meeting in Johannesburg where eighty young black South Africans have joined the group this year, a thought did strike “have we finally become proudly global?”

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This Article was published in the April Edition of DataQuest

A new financial year - why this kolaveri?

2012-04-16T12:51:00.000+05:30

It’s quite a dismal mood with which we start the new financial year in India. A weak Jan-March quarter for all industry sectors, lackluster performance by the stock market indices in a quarter where most internal bourses recorded dramatic gains and a general feeling that India has lost an opportunity to take an international lead in three years of slowdown! Even as confidence seems to be returning to the US economy, are we as a country positioning ourselves to capitalize on the opportunities of the future?

A two week tour of seven cities across UK and US and meetings with clients in March reinforced the feeling that business confidence remains strong and the likelihood of a second recession has receded in the first few months of this calendar. Tech unemployment is almost non-existent in the US and with both Indian and US firms stepping up their local employment drives, the tightening of visas, expected in an election year seems overdone at a time when corporations are keen to invest in technology. CIOs are discussing new ways of reaching out to customers and optimize supply chains, the kind of discussion we always prefer to cost reduction and “doing more for less”! In fact the jump in apartment rentals in Silicon Valley suggests that innovation is alive and kicking, and this is borne out by the slew of new launches including new apps like Highlight and Glancee that use GPS to let people know about the proximity of friends or even strangers who share similar interests being in the vicinity and enabling networking to reach new levels.

There is enough hope globally that new technology capabilities in cloud, social media and mobility will push CIOs particularly in B2C sectors to accelerate their spending on enterprise social media and mobility. And the voices being picked up by our sales teams across the globe also show a new pull for better offshore services with robust business inflows happening, not just in the West but also Australia Asia, Middle East and Africa. Big ticket projects may be put under the microscope particularly in the still sluggish Financial Services and Retail segments, and this coupled with the lower growth projections of NASSCOM and some of the larger Indian and multinational providers have led some analysts to point to a slowdown for the IT sector this year. I am sure this will be proved wrong as the year progresses. So why this Kolaveri anyway? The Government in India seems to be recovering from the near paralysis it displayed towards the end of 2011 and there is hope that many of the bills that were unable to find their way through Parliament will get passed this year and we will see FDI, infrastructure investments and the much needed policy finalization for skills and education happen soon!

For the industry at large, there is a lot at stake if the GDP growth rates can be pushed up a couple of percentage points during this year. A virtuous cycle of growth, increasing demand, more job creation and wide spread prosperity can bring confidence back to consumers and investors and industry associations like CII will need to work hand in hand with Government to ensure that there are no roadblocks. For the IT sector, dependent as it is on exports to cross the hundred billion dollar mark overall and set course for two hundred billion dollars in exports by 2020, Government can do its part by providing more incentives for small towns to join the IT services party and special facilities and tax breaks for the product development fraternity . Industry doyen Narayana Murthy has rightly said that there will be a Bill Gates from India soon, because the youth of the country is ready and willing to choose the road less traveled and embrace innovation in their new entrepreneurial endeavours.

Finally some thoughts on the imperatives for entrepreneurship. At the biannual case study presentation on Zensar that is done at the Harvard Business School, I had the opportunity to interact with many young members of the Class of 2012 and understand their aspirations after an outstanding education and previous experience in consulting and technology majors. There is a desire to make a mark either with smaller global firms or through their own entrepreneurial ventures. There is also a confidence among both American and international students seeking to build entrepreneurial ventures in the tech industry that the eco-system support exists to give them a fair chance of success in their ventures. This is what needs to be strengthened in our country. Product development start-ups in the IT industry and indeed any innovative start-up across industry sectors will need to get the support in our country through enabling Government policies, association and venture capital support and the continued availability of high quality talent. This may be the year to ensure that all this happens!

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This Article was published on the April of The Financial Express

The economic morass and Indian IT

2012-04-15T12:45:00.000+05:30

We are truly living out the old Chinese curse “May you live in interesting times”. As Ministers, top bureaucrats and senior members of Parliament spoke at keynotes and panels in the annual conference of CII, organized specifically to discuss the path to a return of economic growth, one fact became abundantly clear – every intelligent person in any position of influence in the country knows that we have hit a growth roadblock. Do we have a collective method of recognizing, accepting and removing these road blocks is the question that is always met with prevarication or silence!
It’s not that all is bad with the current state of the economy. Surely we can derive some satisfaction from the fact that the Gross Enrolment Ration in colleges is going up and the Right to Education bill has been passed, a National Manufacturing Policy has finally been formulated, the life expectancy in our country has almost doubled since Independence, some of the mission mode National eGovernment programs are being rolled out and over 200 million Indians will be covered by Nandan’s Adhaar scheme by end of the year. However the “policy paralysis” accusation that has been hurled often enough is now sticking, the land acquisition and labour reforms rationalization are yet to see the light of day and the delays in DRTC and GST implementation are likely to cost the country dearly. As one speaker rightly said, the roadblocks that were there in 1989 persist to this day and unless a way is found to eliminate friction in clearance and implementation processes, a quick return to a 8 to 9 percent GDP growth may well be a pipe dream.
For all of us in IT, the tax and duty issues for software products vendors, the lack of clarity on MAT for SEZs for the services folks and the weak budget for private equity and domestic venture capitalists does not augur well for a robust industry growth in this financial year at least. A compounding factor is the clouds that are hovering on the global economic horizon that have cause some concerns among the analyst community, particularly over the Financial Services vertical and large firms relying on hundred million dollar deals to keep their growth momentum intact. In an interesting report by a leading brokerage house on one of the large firms under the title “Rime of the ancient IT vendor” , three key shareholder concerns are articulated – how will companies who have been the darlings of the sector in India correct the loss of revenue and earnings to global peers, how will they restore predictability to their business and manage industry-leading operating parameters and finally when will they articulate a clear cash usage policy to avoid perceptions of shareholder value dilution.
In an industry which has been used to a CAGR of twenty percent, these questions have very rarely surfaced in the past but managements have to have strong answers ready if a period of lesser growth lies ahead!

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This Article was published in the April Edition of The DataQuest

CII and the art of economic growth

2012-04-15T12:44:00.000+05:30

The Confederation of Indian Industry’s annual meeting which starred the who’s who of government and industry had all the makings of a Bollywood potboiler! There was a debating society of parliamentarians Tharoor, Yechuri, Prasad and Singh that took the fine art of sarcasm and repartee to new levels but did not rain any new intelligence on the five hundred strong audience of business chiefs. It was amusing though not surprising to find that all the politicians from the treasury benches mouthed the party line and appeared almost startled at the extent of concern expressed at the economic quicksand the country is wallowing in. Leaders of the opposition could hardly conceal their glee at “watching the enemy commit suicide” as one worthy leader quipped!
As one takes stock of the year gone by, credit must be given to some of our well-meaning ministers for a few achievements and many new policy announcements. The National Manufacturing Policy with the creation of NIMZs, the multiple Education bills and the vocational education framework that are in play and the real progress in addressing skills are all signs of progress. However the track record of implementation of UPA-2 has been hardly creditable with many bills stuck in the quicksand of internal and external contradictions and the recent budget failing to enthuse both domestic and international investors and analysts. The admission of a state of political paralysis by one of the economic advisors to the Government and the suggestion that we would have to wait for 2014 to see any big ticket reforms can hardly provide much succor to over a billion Indians who are waiting to see a better future now that we know what it is to grow over eight percent, albeit for just a couple of years!
As Nandan Nilekani rightly pointed out, the country today spends over 300,000 crores in subsidies and other handouts. The role that initiatives like the UID or Adhaar can play in ensuring that finance and supplies flows to the right person at the right time has to be appreciated by the powers that be to eliminate major waste in the economy . Many other non-political steps – the Direct Tax Code, faster e-Government implementation to eliminate friction points between the Government and the citizens and well thought out PPP initiatives in Healthcare and Skills can also be accelerated to get some real results in the near term.
The IT industry has been hurt as well – by acts of commission that global software players are concerned about and acts of omission which smaller firms particularly product entrepreneurs fret about. As one of our most successful entrepreneurs has written in a recent hard hitting piece, the Government of Philippines must be thanking their Indian counterparts for the disillusionment of many IT CEOs which is resulting in the industry in that country growing faster than India. India has the potential to accelerate the growth of Software and Business Services exports to over three hundred billion dollars by 2020 if the right steps are taken to support and expand the sector. Clarity on transfer pricing and taxation, elimination or minimization of MAT on SEZs, special knowledge eco-system creation in Tier 3 locations and tax and investment support to entrepreneurs creating valuable intellectual property from this country – the list can go on!
The results of the last quarter of the financial year FY 12 has been a mixed back. While most us have continued to grow our top lines though there have been some vagaries in the bottom line on a quarter to quarter basis, the results and more important the future commentary of some of the large firms have sent a few shivers down the spine of industry watchers and even prompted a rather unusual “open letter” from an analyst to one industry leader questioning the future directions of the firm. It is becoming clear that the next few quarters will not follow a predictable trend for the industry as a whole but the good stories will emanate from companies who are less defendant on Financial Services have a robust dual shore model and are able to have a wide enough portfolio to “farm” existing clients as well as “hunt” new deals!
And for a final thought, the near paralysis we are witnessing in the theater of political economics could not be better captured than the answer giving to a former public sector CEO who mentioned various reasons why his firm could not progress in the last few years. “The Government is seized of the problem” he was told! Will the nation itself have to get a collective seizure before an oxygen tank becomes visible to breathe life into the economy? These are interesting times, for the Government, the CII and all of us! There is a need for all of us to stay positive and defend the country vigorously in all international forums but it would be good to see some real steps towards progress in this financial year!
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This Article was published in the April Edition of The Financial Express

Collaborating with Competitors

2012-02-22T09:01:00.000+05:30

Kiran Karnik's new book launched at the recent Nasscom Leadership Forum is all about the theme of how people who fight bitterly in global and domestic competition are able to come together extremely well for common causes like global trade, innovation and other industry issues. It is a natural trait of all human beings to collaborate and we are only forced to take combative positions when the necessity of competition force us to do so !

My own experiences with NASSCOM over nearly two decades reveal that all IT CEOs are well meaning blokes and whether it is industry founder FC Kohli, doyen Narayana Murthy or even non resident former Chairmen like Raj Jain and Firoze Vandrewala, the alignment to the common cause is very strong indeed. Long may this bonhomie last and take this 100 billion dollar industry to a trillion by 2030 !

Kiran Karnik himself like his predecessor Dewang Mehta has collaborative skills as one of his main characteristics. I owe my Chairmanship of NASSCOM in 2008-09 to this man who genuinely believed that contributors should find their place in the sky even if it is resplendent with the shine of many bright suns !

Ganesh

The IT industry status and outlook

2012-02-10T13:05:00.000+05:30

The interesting conclusion one can draw from the FY12 outlook posted by NASSCOM is that the IT Services folks are still growing faster than the BPO and Engineering Services and Products players in spite of a much larger base. My own belief is that this will not change in the foresseable future. All of us who are significant players in services are embracing non-linear growth and creating IP as well as new platforms for Cloud and BPO which will enable us to maintain growth and profits and transform to true solutions companies.

Next year will be tougher though NASSCOM's 11- 13 percent growth outlook for Exports seems to be overly pessimistic in my opinion. We all will do better than that !

For the Product folks the challenges remain - finding the right niche, getting adequate access to capital and dominating the chosen market. This game is far from being played out !

Its a new world !

2012-02-03T18:05:00.000+05:30

In spite of all the doomsday forecasts for the global and Indian economy, the new year has started off reasonably well. The Stock markets are up, the rupee is the best performing currency in Jan and the outlook for the IT sector is fairly decent both for CY 12 and FY 13.

So relax folks, no need to worry ....yet!

Zensar Annual Excellence Awards

2011-12-15T19:46:00.000+05:30

Over 150 Zensarians got awards today and the exuberance in the audience was truly inspirational. India's future is with the youth and there is an abundance of that in our industry !

Business and life

2011-12-15T08:30:00.000+05:30

The rupee keeps hurtling to new depths and there is no sign of an immediate resolution to India and the world's economic crises. In this context the IT industry can heave a temporary sigh of relief at the strong dollar but needs to be wary about 2012.

Does anybody here have suggestions - for NASSCOM, companies or even IT leadership ?

The state of the industry today

2011-11-29T22:01:00.000+05:30

The Information Tecyhnology industry in India is again at the cross roads. Government support seems to be dwindling, the ugle specter of protectionism is rearing its head in key Western markets and input costs have been rising faster than pricing.

However the non-linear growth model adopted by many companies and the transition from a pure services to solutions based industry will serve us well in the years to come

What is missing is a comprehensive approach to build an eco-system of support for the products industry. That should be the next focus area - for the industry and for NASSCOM

New challenges for the Indian IT sector

2011-11-29T10:11:00.000+05:30

It never seems to end - the Euro crisis, continuing unemployment and a divisive election coming up in the US and of course disruptive Indian politics. The rupee seems to be the only factor in our favour. But this industry has a lot going for it and will prevail

Interesting times

2011-08-19T12:36:00.000+05:30

The Indian business scenario is getting increasingly murky. The decline and recessionary trends in the global economy are worrying enough and the weak growth of the capital goods sector in the country does not bode well for economic robustness. Add to that the complex Lokpal issue and the Anna Hazare stand-off and I do not see too much hope of a robust business environment anytime soon.

In all this the IT sector is committed to grow 20 percent this year. It will still happen and Zensar will grow 40 % !

Ganesh