The late 2003 State Assembly elections in India were fought on the Acronym - BSP - the Bijli, Sadak, Pani issues. In India's National Language - Hindi, 'Bijli' means Electricity. 'Sadak' means Roads. 'Pani' means 'Water'. We hijack the same BSP acronym to explain a few broad trends affecting the IT Industry in India. We call these underlying events and trends individually as the 'B', 'S' and 'P' factors, collectively called the 'BSP' factors.

Down Arrow The 'S' Factors

Gray Arrow 'Software Shakeout'

Gray Arrow 'Steady Rupee Appreciation'

Gray Arrow 'Software as a Service'

Gray Arrow 'Software Sourcing Type'

Gray Arrow 'Strategic Use of IT'

Gray Arrow 'Services Surging Steadily'

Gray Arrow 'Steady Increase in Standards of Living'

Gray Arrow The first and most important 'S' factor was the 'Software Shakeout' which resulted slow or sudden death of many global software companies. Gartner, a respected Global Analyst Organisation expects half of the large current IT organisations to die. In India also, many mid-sized IT companies found themselves squeezed between large volume giants and small niche specialised pygmies.

Gray Arrow The next 'S' factor affecting the IT industry was the 'Steady Rupee Appreciation' against the Dollar. James Mecklai states that the US $1 would equal to Rs 20 by the year 2050, when India is predicted by Goldman Sachs to become the 3rd largest economy in the world (after China and US). In a Mumbai TV Talkshow of IT CEO's, when I raised this issue, at least one of them mentioned 1 US $ equaling to Rs 40 as their internal working assumption. If the above prediction actually materialises, can the IT industry become more competitive or will work move to other lower cost countries away from India ?

Gray Arrow The third important 'S' factor is that of 'Software as a Service'. A new technology trend that is fast shaping up is that of 'Web Services' which are software programs that use standard internet protocols to exchange information with other computers globally. Many Indian IT companies have already started working on Web Services. Even though practical usage of web services are a little far away on the horizon, they have some interesting implications.




Gray Arrow Related to this is also the next 'S' factor as 'Software Sourcing Type'. 'Open Source Software' or 'Closed Source Software' is an important Question for the IT Industry. The Open Source Movement (Creation and availability of Free Software) has the potential to radically alter the IT Industry. How would software organisations make money if software license revenues become zero ? Only from Software Services ? Most Governments are evaluating Open Source Software. Again this will have strong implications for India's IT industry and the regulatory authorities. Would software be taxed as a Product or Service ? Can the State and Central government authorities keep track of software or services transacted via the Internet ? Some tough decisions ahead.

Gray Arrow The next 'S' factor would be 'Strategic Use of IT' by Indian industry to help overcome Competition.

Gray Arrow 'Services Surging Steadily' is the next 'S' Trend. The Spread of the Outsourcing Revolution from IT services to non-IT sectors like research, advertising, marketing, design is happening slowly and steadily. Any service which involves Creative Intellectual Mind or Brain Based Work can be done from here, elevating Indians and India to the cusp of a major services revolution.

Gray Arrow The last most important 'S' factor would be the 'Steady Increase in Standards of Living' in India. A large number of IT and ITES (IT Enabled Services) jobs have been created not only in the large Metros but also in Non-Metros and small towns. A KPMG Study states that US $10 Billion of purchasing power has been created in the hands of these young consumers who have these IT/ITES jobs.

Gray Arrow BSP - The 'B' Factors Square Separator The 'P' Factors