11th April 1997
As software exports crossed the $1-billion mark to touch $1.15 billions during 1996-97, Nasscom–the National Association of Software and Service Companies–has unveiled a new growth strategy to be fuelled by a product focus among Indian software companies. A focus group on telecom product software has been formed and a white paper is likely to be formulated.
This was announced at a Nasscom press conference on Thursday chaired by the new president Mr. K.V. Ramani, of Future Software Pvt. Ltd. and Mr. Dewang Mehta, Executive Director of the association.
Nasscom has projected software export revenues to grow to $3.6 billions and domestic revenues to grow to $2.5 billions by the year 2000. The domestic market growth is expected to be fuelled by the DoE’s gameplan to increase computer penetration in the country from two per 1,000 to 10 per 1000. Nasscom will also conduct seminars targeted at domestic players. which will focus on developing expertise in vertical segments such as cement and steel.
Mr. Ramani also unveiled plans for the forthcoming year. Marketing of Indian software expertise in Japan, Korea and South Africa will get special focus while achievements in the US and Europe will be consolidated.
Nasscom also expects the issue of software infrastructure to get special attention this year and a proposal to set up 50 software cities affiliated to existing regional engineering colleges and Indian Institutes of Technology has been submitted. Mr. Ramani also pointed out that the state governments, especially in the south, were showing keen interest.
The millennium bug issue will also get a special focus, with the India Document, a buyer’s guide to Year 2000 solutions offered by Indian companies being released at Comdex UK later in the year. Mr. Mehta said Nasscom would also be participating in the Millennium Bug Pavilion at Comdex UK.
The Y2K bug is expected to generate business to the tune of $2 to $ 5 billions for Indian companies. Mr. Mehta said the business in India for Y2K conversion was much smaller at around Rs.100 to Rs.200 crores. “But Indian companies should wake up soon. Otherwise they might not be able to find any software houses in the country to do the conversion for them. since everyone will be busy with export orders,” he warned.
Another issue being discussed at Nasscom is the question of insuring for product liabilities arising out of Y2K conversions. Mr. Ramani said the association was speaking to several insurance companies for paying a premium from their Y2K revenues to protect themselves against any liability that may arise from system failures generated by the problem.
Nasscom is planning several initiatives in the area of manpower training. Mr. Ramani said the association had obtained Government clearance for an Indian Institute of Computer Professional, which will be modelled along the lines of the Institute of the Chartered Accountants of India (ICAI)
Nasscom is planning several initiatives in the area of manpower training. Mr. Ramani said the association had obtained Government clearance for an Indian Institute of Computer Professionals, which will be modelled along the lines of the Institute of the Chartered Accountants of India (ICAI)
Students will register with the institute and join a company of their choice for a period of apprenticeship during which they will be paid a small stipend. They will also take exams set by the institute. According to Mr. Mehta, this system would not involve heavy expenditure in infrastructure while also generating professionals trained by the industry itself.
As part of the initiative to increase manpower ability, the IITs have also been convinced double the number of computer science graduates per year from the current level of 300 per annum. Bridge courses (as optional six-month programmes) will also be introduced in the IITs for graduates in other disciplines such as chemistry and physics–this pool of manpower could be tapped to create specialised application software.
As Mr. Mehta put it, “It will be easier to teach computers to a physics graduate than to teach advanced physics to a computer science graduate. The number of seats in engineering colleges will also be increased as part of the program.
Nasscom has submitted a proposal for employee’s stock options to the Government. The plan involves several changes in the Company Law as well as in SEBI guidelines. Nasscom, for instance, has suggested that software companies be given the freedom to issue their shares at variable prices than only at par value. It has also suggested that the procedure for increasing share capital be made simpler so that they can offer stock options every year. Also, capital gains should be taxed only when the stock is encashed on the difference between the issue price and the market rate. it has been suggested.
Nasscom has also requested that software companies be allowed to list on NASDAQ. Mr. Ramani said at least a few software companies would be listed on NASDAQ this year.
Mr. Ramani announced that branch offices of Nasscom would be opened in Mumbai, Bangalore, Chennai and Calcutta to deal with local issues. Policy will continue to be formulated for the nation as a whole in Delhi.
As part of its programme to link schools to the information revolution Nasscom and VSNL have decided to provide Internet connectivity (a TCP/IP account and a computer) to 100 Chennai schools, which would otherwise not be able to afford the same.