​Why IoT could be the savior Indian IT desperately needs

The skills required for IoT implementation are those that Indian IT services companies have in abundance. But they need to be able to make bold moves and seize opportunities in the space, which may be difficult considering their track record.
Written by Rajiv Rao, Contributing Writer

There hasn't been a worst time for the Indian IT sector since its lift-off in the early 2000s.

It's been a perfect storm: Flattening growth rates thanks to plug-and-play cloud businesses upending age-old bread-and-butter models such as infrastructure maintenance and application development; Brexit woes; US President Donald Trump's protectionist threats; a failure to wean itself away from labour arbitrage and towards the new-era digital businesses. The list seemingly goes on and on.

And yet, there exists a growing opportunity, right under the noses of IT services companies such as Infosys, TCS, and Wipro, that could rescue the industry from the doldrums, utilizing the very same skill sets that served it well in the former era.

"The BPO skill set can be a great one," observed Ray Wang, founder of research and consulting firm Constellation Research. "Today when you go to a hotel, who handles your internet connection? It's some company in Romania or potentially India. It's a massive IoT outsourcing operation, managing the cooling and elevators and electrical sensing for companies, and eventually for smart cities -- that's a gigantic market to be created," he added.

The reason for this is straightforward: Entire value chains within companies are now being digitized at a furious pace as sensors, consumer devices, and analytics tools amongst other things are all being connected to each other.

Yet a fundamental problem remains. IoT vendors rarely have any of the core domain expertise or the implementation ability to manage an IoT solution set, especially if it concerns a large array of consumers or industrial clients.

"A successful IoT implementation requires both technical expertise and business process knowledge specific to the industry and the business problem the system is designed to solve," said Joe Barkai, a tech blogger and speaker. "It needs to be deeply ingrained in the business environment, processes workflow, supply chain management, regulatory guidelines, and numerous other business-centric considerations."

What IoT vendors desperately need, according to Barkai, are partners, system integrators, and BPO providers who can dive in and do all the grunt work needed to keep these systems alive and kicking -- such as business process flow, testing, and analytics software. These play neatly into the core competencies of Indian IT services who are desperately looking for somewhere to deploy their rapidly outdated skills and employees.

IoT business could also prove to be the cup that keeps on giving. According to this columnist at Mint newspaper, IT firms could potentially hit the mother lode by being able to "first charge a hefty sum to build bespoke and custom solutions for refrigerator 'RICs', washing machine 'RICs', iron 'RICs', and car 'RICs', and then charge again for constantly tweaking and redefining their systems as clients continually bring out new models of their 'things' or their end customers change their use patterns and demand more privacy."

In a world where new opportunities are being accessed by acquiring a flotilla of specialty firms that play in the digital realm like Accenture is doing, Indian IT -- which has shown itself to be unable or unwilling to play this game -- may find that the IoT opportunity is the only sizeable one they can bank on in the near term.

The good news is the humongous opportunity in this space. According to research firm Zinnov, Indian firms are already doing $1.52 billion worth of IoT business out of the $3.5 billion global IoT technology services market today. With a combined global products and services market expected to grow to from $140 billion today to $322 billion by 2022, this is an opportunity begging to be cornered.

"But IT companies are afraid to make bold moves and shareholders are afraid to make bold moves," said Constellation's Wang. Indian IT will hope to prove him wrong in order to secure their their future growth prospects.

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