Nasscom fights to stay relevant in India's tech renaissance

Nasscom fights to stay relevant in India's tech renaissance

Summary: India's 25-year-old industry body preps to battle young think tanks as it aim to lead the campaign toward a US$100 billion mobile and Internet industry.

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A crisis of leadership could mark a significant power shift in the evolution of India's vibrant technology industry, where industry body Nasscom is battling to stay relevant in an ever-changing market landscape.

The commercial potential of Web and mobile applications has stripped the gloss from the outsourcing services model that gave birth to one of the world's fastest-growing economies. The explosion of Indian entrepreneurs building tech products to satisfy growing domestic, and global, demand has shaken the traditional power base of Nasscom, which outsourcing vendor members historically pull the strings in India's technology economy.

This tension culminated recently when startup think tank, iSpirt--comprising 30 software vendors--announced it was splitting from Nasscom to advocate for the rights of software developers.

In an era when the full power of technology is perpetually within consumer hands, there is no doubt future growth will come from indigenous app developers with the resources and skills to build billion-dollar tech businesses, the building blocks of India's own Silicon Valley.

The main question here is whether there is a place for the face of India's IT revolution, Nasscom, which recently stated its own ambitious goals to transform and drive India's software revenue to US$300 billion by 2020. The issue hinges on one key stat: the value of India's IT services which, Nasscom said, has grown from US$10 million to US$100 billion. In its 25th year of incorporation, the industry group has ample cause to celebrate this 10,000 percent increase. 

And celebrate it did at a recent event which seemed to be an announcement of its 2020 vision for the industry. Held at the Oberoi Hotel in Bangalore--the spiritual homeland of India's first tech boom--dozens of journalists packed the flower-laden tables and waited for the speeches to begin.

The guests of honour included Nasscom's chairman N. Chandresekan, president Som Mittal, subcommittee chairman and Infosys co-founder, N.R Narayan Murthy.

Chandrasekan said: "Nasscom spearheaded a movement for the last 24 years, and all of you know the success and size of this industry. Such success is unparalleled. It is something that does not happen, and has not happened, without key players in the industry coming together.

"Year after year we added new markets--services, domain capability--and the size is continually expanding. We have an institution which has enabled something remarkable to happen in this country," he said. 

Suiting up for change

The Indian call center industry weaned on the world's use of client servers in the 1980s; the evolution to outsource work was nurtured by ERP in the 1990s; and the expansion to services and business process management thrived in the Internet-era in the 2000s.

Now there was a new frontier, Chandrasekan noted.

"Now we're at a point in time here with various technologies--mobile, big data, cloud social and 3G, 4G telecom networks--where each of them will not only make an impact by themselves but, in continuation with other technologies, will create new possibilities not only for our industry but every industry," he said.

"Every industry--financial services, consumer products, telcos, government--is reimagining its own processes, if they want to liberate these technologies and leapfrog their competitors," he added. 

India has the elements to succeed: the manpower, huge domestic market, access to capital, and the digital infrastructure.

It was this opportunity--not the threat from iSpirt--that provoked Nasscom to react. Infosys' Murthy was charged with the task to articulate a new Nasscom manifesto.

Chandrasekan said: "I'm pretty confident with all these interventions, if you will. We are looking at a future which will not only exceed our estimated US$300 billion by 2020, but will create product, platform, or Internet businesses that will become leaders globally."

Murthy's rhetoric matched the occasion. "The vision is to help the IT industry in India to be trustworthy, respected, innovative, and society-friendly in the world," he said.

"Nasscom has been built on a strong foundation of values which are all about encouraging ethical business; all about being fair to every member, irrespective of size, location, strength; all about being apolitical; all about focusing on innovation; and all about keeping the flag of India flying," he added.

Over six meetings that totaled 40 hours, Murthy said his six-man committee gathered feedback and recommended the course of action for the industry. It concluded Nasscom should add three new focus areas--Internet and mobile, software products, and e-commerce--to its four core pillars, namely, services, global in-house centers, business process management, and R&D (research and development).

The industry body would boost membership from 400 actively engaged companies to 3,000, and create five new centers of excellence--the focus of which would be decided by the incoming president who will be appointed later this year.

Ultimately, the plan rested on Murthy's expectation that India will be able to create a US$100 billion mobile and Internet industry in the next seven years. 

The country had met expectations before, and Murthy was confident its goal could be achieved again. He recalled a 1990 Nasscom conference when Som Mittal was then secretary of India's department of electronics.

"[Mittal] said 'if you guys promise to be US$400 million industry by 1995, I will work with the government to get you tax exemption. Which one of you can come to the podium and guarantee that'," Murthy said.

"There was such a sense of uncertainty, trepidation and vascillation, that it took a little bit of time, and finally--as I was then vice president of Nasscom--some of those guys pushed me onto the podium and I had to make that statement.

"The reality is, we have far exceeded those expectations," he concluded. 

Topics: Tech Industry, Emerging Tech, Outsourcing, Software, Start-Ups, India

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