Success Mantras for the IT Industry in the Next Decade

Aditya P. Mathur

Professor, Department of Computer Sciences

Purdue University

West Lafayette, IN 47907.

July-Dec 2003: Visiting Professor, BITS, Pilani.

At Rakshapal Bahadur Management Institute, Bareilly, India.Saturday October 11, 2003

Keynote Address

Last update: October 11, 2003

October 11, 2003 Success Mantras 2

Our flight path…

What is “success” ?

India and the IT revolution in the past decade.

India’s role during the economic boom of other countries.

What have we achieved and what not?

A different path for the future of IT in India.

October 11, 2003 Success Mantras 3

Success

Economic

Increase in foreign exchange reserves

Improvement in infrastructure

Preferred developer for most clients

Other

Positive impact on local economies

Improved opportunities

Improved respect in the international community

October 11, 2003 Success Mantras 4

Comparison against?

India

Others

October 11, 2003 Success Mantras 5

Some Statistics [Ref: Skoch Consultancy]

Software exports:

Revenues: $8 billion in 2002

30% growth

Software/Hardware domestic:

Revenues: $5 billion in 2002

PCs sold:

1.8 million

14% growth

October 11, 2003 Success Mantras 6

Statistics: National Level

Poverty:

Reduction from 44% to 20% below poverty line over 15 years.

IMF dues paid off in 2000

Loans to 7 heavily debted African countries written off.

Foreign exchange reserves: $86.2b (August 2003. 7th largest in the world)

October 11, 2003 Success Mantras 7

Statistics: Manpower

Total IT professionals: 0.15M in 2005-6

Engineering colleges: 1064-->0.3M engineers/year

Engg. Diploma granting colleges: 1231-->0.22M diplomas/year

Institutes: 737-->37K MCA/year

Reference: The Hindu Aug 11, 2003

October 11, 2003 Success Mantras 8

Statistics: Comparison of Annual Revenues

IBM 2001: $85.0b

Microsoft

2002: $80.0b 2003: $21.6b (second quarter)

2001-2002: $28.37b Office products: $18.9b

India’s revenue from software: $8b in 2002

Intuit

2002-2003: $1.6b (tax and accounting products)

October 11, 2003 Success Mantras 9

Services in the past

Pre-WW II: Malaysia tea gardens

90’s: IT boom

‘70s: Middle east construction boom

October 11, 2003 Success Mantras 10

Where are we?

India has done well in the software services market. Market likely to grow.

Revenues from software product sales are dismal (less than $300M/year?.

Few “Made in India” software products sold worldwide.

India has perhaps the largest trained manpower for use in providing software services and software products. This resource is on the rise.

October 11, 2003 Success Mantras 11

Questions

Should India remain primarily a software service provider?

Should we remain a mere resource of talented manpower to be used by the developed nations?

Can we learn something from Japan (or Korea) ?

How far can the software services sector take India?

What happens to India’s innovation, creativity, and world image?

Which nation became developed based solely on services?

We have done it thrice. Are we developed now?

Perhaps yes…

October 11, 2003 Success Mantras 12

The Japanese Approach to Industrial Dominance

After WW II: Economy in shambles.

Products are inexpensive but poor quality.

Product development goes full steam. Technology borrowed shamelessly from the west.

Improvement in quality and sophistication becomes the norm.

October 11, 2003 Success Mantras 13

The Japanese Approach to Dominance [2]

Major failures encountered (e.g. the Fifth generation project)

In 40 years, Japan is a (respected) world leader in many areas.

Of course, hard work, discipline, and government support were at the heart of the Japanese revolution.

Significant investment in applied and basic research:• Japan: 3.29% of GDP• US: 2.6% of GDP

• Germany: 2.5% of GDP

Source: Statistics Bureau, MPHPT

However…poduct quality and variety improves.

October 11, 2003 Success Mantras 14

Mantra One

Invest in software product development and marketing.

October 11, 2003 Success Mantras 15

Mantra Two

Invest in basic and applied research in IT.

October 11, 2003 Success Mantras 16

Mantra Three

Spread education in software engineering.

October 11, 2003 Success Mantras 17

Mantra One: Strategy: Product Space

Invest in software product development and marketing.

Partial product space:

• Office: Word, Powerpoint, Excel etc.

• OS: Windows, RT, etc.

• Application: SAP, Banking, ERP, etc.

Very high risk/cost

High risk/cost

Medium risk/cost

Client specific: Embedded Low risk/cost

October 11, 2003 Success Mantras 18

Mantra One: Strategy: Development

Reverse engineer. Offer backward compatibility. Attractive pricing.

Novel design: Identify need and create new products

• For capturing the market of existing products.

• For creating new national and international markets.

• Requires market research and innovativeness in product development.

Exploit the Internet in novel ways for marketing and use.

• Develop an SSP paradigm for software delivery and use.

October 11, 2003 Success Mantras 19

Mantra Two: Strategy

Invest in basic and applied research in IT.

Industry/University collaboration.

• Inculcate habits of innovation, creativity, experimentation. And, most importantly, belief in oneself.

Industrial research labs.

• Focus on short term “proof of concept” idea prototyping and evaluation.

• Both short and long term research published in international conferences and journals.

2% of industrial revenues towards research-->$160M/year

October 11, 2003 Success Mantras 20

Mantra Three: Strategy: Product lifecycle

Spread education in software engineering.

Product lifecycle.

• Life cycle notions are different in service sector than in product sector.

• Product life cycle requires long term commitment to maintenance and support. This is not as necessary in short term service oriented projects.

October 11, 2003 Success Mantras 21

Mantra Three: Strategy: Quality

Quality Assurance

• Focus on extremely high quality products

• Inculcate quality culture amongst students. Teach them techniques for testing and quality assurance and how to apply them in practice.

• Do not emulate Microsoft. Emulate Sony.

October 11, 2003 Success Mantras 22

October 11, 2003 Success Mantras 23