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t will be incorrect to say today that the Indian
software industry will remain insulated against and immune to the US economic
slowdown. However, the fact remains that while some software exporters are getting
hit, some are still managing good export growth rates, and yet others are trying to
convert it into an opportunity. Overall, the industry is re-strategizing to continue
on its existing growth path.
According to NASSCOM, the software export statistics for 2000-01 are expected to be
around US$6.2 billion—a jump of over 55 percent over the US$4 billion achieved in the
previous year. By all accounts this is healthy growth.
While the figure of US$6.2 billion is significant for the Indian market,
in terms of the overall size of the US economy, this is but a small portion. Had the
Indian software industry been at the level of $30-40 billion of exports in 2000-01,
we would indeed have been facing an uphill climb. Luckily, this is not the situation.
At US$6.2 billion of software exports, we can still aim to grow at the 40-50 percent
level, provided we have dynamic strategies.
In hindsight, the other bit of comfort is that India has been focusing
on IT services rather than products. Consumer confidence in the US is currently
at an ebb. Customers are not purchasing or investing in new IT products,
a trend that is leading global hardware and software majors to sound alarm bells.
IT giants such as Cisco and Oracle have already announced profit warnings.
The Indian software industry, however, is not in the same business as some of the
US-based IT companies. While some of our exporters are in the products business
and are doing well, the majority are in IT services exports that might prove to be a saving
grace, at least for the time being.
Close to 20 percent of software export revenues from India are realized from
segments such as remote maintenance. This segment continues to grow
for off-shore outsourcing at more than 50 percent. The other area where the
Hard Selling Software
Taking the Down Out of Slowdown
The Times of India April 10, 2001
