Success Mantras for the IT Industry in the Next Decade

1. Professor, Department of Computer Sciences Purdue University West Lafayette, IN 47907. July-Dec 2003: Visiting Professor, BITS, Pilani. Success Mantras for the IT Industry in the Next Decade Aditya P. Mathur Keynote Address At Rakshapal Bahadur Management Institute, Bareilly, India. Saturday October 11, 2003 Last update: October 11, 2003

2. Our flight path… • What is “success” ? • India’s role during the economic boom of other countries. • India and the IT revolution in the past decade. • What have we achieved and what not? • A different path for the future of IT in India. Success Mantras

3. Success • Economic • Increase in foreign exchange reserves • Improvement in infrastructure • Preferred developer for most clients • Positive impact on local economies • Other • Improved opportunities • Improved respect in the international community Success Mantras

4. Comparison against? • India • Others 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 Success Mantras

6. Statistics: National Level • Poverty: • Reduction from 44% to 20% below poverty line over 15 years. • Foreign exchange reserves: $86.2b (August 2003. 7th largest in the world) • IMF dues paid off in 2000 • Loans to 7 heavily debted African countries written off. Success Mantras

7. Statistics: Manpower • Engineering colleges: 1064-->0.3M engineers/year • Engg. Diploma granting colleges: 1231-->0.22M diplomas/year • Institutes: 737-->37K MCA/year • Total IT professionals: 0.15M in 2005-6 Reference: The Hindu Aug 11, 2003 Success Mantras

8. Statistics: Comparison of Annual Revenues India’s revenue from software: $8b in 2002 • IBM • 2001: $85.0b • 2002: $80.0b • 2003: $21.6b (second quarter) • Microsoft • 2001-2002: $28.37b • Office products: $18.9b • Intuit • 2002-2003: $1.6b (tax and accounting products) Success Mantras

9. Services in the past • Pre-WW II: Malaysia tea gardens • ‘70s: Middle east construction boom • 90’s: IT boom Success Mantras

10. Where are we? • India has done well in the software services market. Market likely to grow. • India has perhaps the largest trained manpower for use in providing software services and software products. This resource is on the rise. • Revenues from software product sales are dismal (less than $300M/year?. • Few “Made in India” software products sold worldwide. Success Mantras

11. Questions • Should India remain primarily a software service provider? What happens to India’s innovation, creativity, and world image? • How far can the software services sector take India? Which nation became developed based solely on services? • Should we remain a mere resource of talented manpower to be used by the developed nations? We have done it thrice. Are we developed now? • Can we learn something from Japan (or Korea) ? Perhaps yes… Success Mantras

12. The Japanese Approach to Industrial Dominance • After WW II: Economy in shambles. • Product development goes full steam. Technology borrowed shamelessly from the west. • Products are inexpensive but poor quality. • Improvement in quality and sophistication becomes the norm. Success Mantras

13. The Japanese Approach to Dominance [2] • Significant investment in applied and basic research: • Japan: 3.29% of GDP • US: 2.6% of GDP • Germany: 2.5% of GDP • Major failures encountered (e.g. the Fifth generation project) • However…poduct quality and variety improves. • 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. Source: Statistics Bureau, MPHPT Success Mantras

14. Mantra One Invest in software product development and marketing. Success Mantras

15. Mantra Two Invest in basic and applied research in IT. Success Mantras

16. Mantra Three Spread education in software engineering. Success Mantras

17. Mantra One: Strategy: Product Space Invest in software product development and marketing. • Partial product space: • OS: Windows, RT, etc. Very high risk/cost • Office: Word, Powerpoint, Excel etc. High risk/cost • Application: SAP, Banking, ERP, etc. Medium risk/cost Client specific: Embedded Low risk/cost Success Mantras

18. Mantra One: Strategy: Development • Reverse engineer. Offer backward compatibility. Attractive pricing. • For capturing the market of existing products. • Novel design: Identify need and create new 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. 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. • Both short and long term research published in international conferences and journals. • Industrial research labs. • Focus on short term “proof of concept” idea prototyping and evaluation. • 2% of industrial revenues towards research-->$160M/year 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. Success Mantras

21. Mantra Three: Strategy: Quality • Quality Assurance • Focus on extremely high quality products • Do not emulate Microsoft. Emulate Sony. • Inculcate quality culture amongst students. Teach them techniques for testing and quality assurance and how to apply them in practice. Success Mantras

22. Success Mantras

23. Thank You! Success Mantras