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Trip Report: India December 2008 – Sentiments From Bangalore

Published on December 4, 2008 by R "Ray" Wang

New airport symbolic of Bengaluru's on-going transformation. Arrival into Bangalore was quite a treat with mild 75 degree (25C) weather, less humidity, and a spanking new airport built by Zurich Airport, Siemens and India's renown Larsen & Toubro for a price tag of $625 million. The old airport was closer to downtown, but frankly not worthy of Bangalore's world class info tech reputation. The trade off - the Bengaluru International Airport is located in Devanahalli, 35km North of Bangalore city center It's further away, and takes about an hour to get there. Infrastructure is spotty from the newly built National Highway 7 (Bangalore-Hyderabad Highway) to MG road, there are some segments that seem like they are in perpetual construction. On the way back, you feel the effects of the new Indian airport - great check-in flows, auto bag screening, real jetways to the planes (no more transfer buses), high end boutiques, western style food courts, and real air conditioning! Leading services providers move to deliver differentiated IP. Conversations with the leading firms highlighted continued advancement in the value chain. These service providers have managed to rapidly transform themselves over the past 2 years. The goal of achieving a trusted advisor status among clients remains in sight. There were 4 key themes from my meetings with our vendor clients as well as customers visiting these Indian service providers:

New vendor focused centers of excellence show increased competency
Continued micro verticalization adds to industry credibility
Deeper specialization in industries, roles, geos, and market segments opens up new markets
Transition from selling to an IT user to earning a business leader's trust reflects new buying patterns

As with conversations in Mumbai, there is a sense of slow-down, but this is relative to the growth rates of 50% Y-O-Y growth that some firms have enjoyed during the past 5 years. Hiring continues and ranges from replacement only to "moderate" growth of 20% The bottom line -service providers making the transition to solution providers System integrators now have the power to deliver their IP via the Cloud, PaaS, SaaS, and other mechanisms. The result - IP can be owned and distributed directly to customers. The more this happens, the more customers will have choice beyond the large vendors. If successful, innovation will thrive and customers will win as these solution centric ecosystems get built out. Your POV. What are you seeing in the India market? Is your services provider becoming more strategic? Feel free to share with me your thoughts. You can post here or send me a private email to rwang0@gmail.com. Copyright © 2008 R Wang. All rights reserved.

Trip Report: India December 2008 – Measuring the Mood in Mumbai

Published on December 2, 2008 by R "Ray" Wang

Terrorist attacks impact business travellers but not locales and battle hardened road warriors The trip to India was a tough decision to make. After intense discussions with the family, I left for the airport just as the last terrorist was being surrounded by commandos and security forces. It was hard to determine if things were going to be safe or remain chaotic. News reports on CNN and the BBC seemed hyperbolic but it was hard to tell. However, the flight over was a clear indication of what to expect. Y-class on CO flight 48 was full and oversold as Indian nationals and Indian-Americans headed back to their beloved city , terrorism or no terrorism. Meanwhile J-class was eerily empty with only 8 business class seats were occupied. Most of these individuals were road warriors and media pro's used to traveling to Africa, Indonesia, Israel, and other areas facing strife. On the plane was the PBS News Hour's Simon Marks covering India for another story but serendipity had him there to cover the Mumbai attacks. Another good indicator was hotel occupancy rates. The hotel I was at had about 24% occupancy as business travelers had cancelled. Others were doing worse at 20% or less. Mood among the tech community remains one of perseverance and anger At the NASSCOM event on Tuesday morning in Mumbai, I was expecting a poor turnout. Instead, we had a full house. The guests and hosts were delighted and surprised I had arrived as many foreign travelers had canceled their trips. Despite the lack of foreign travelers, conversations with members of the tech community in Mumbai show a "nothing can stop u" spirit. In general, the mood is of outrage at the terrorists. Most individuals I spoke with saw the need to push forward and continue. As I left from Mumbai, the mood on the plane to Bangalore was the same. Trends show a different perspective on the economic crisis Unlike the horror stories from China with over 100M factory workers returning to the country side, India's economy is more diversified. In the InfoTech market, there seems to be a strong sense of cautious optimism. Some emerging trends from conversations with the InfoTech community include:

Most companies forecasting lower new hire plans. Unlike NA and EMEA where there are hiring freezes, Indian firms are predicting a slow down in hiring but not freezes and job cuts.
BPO and managed services firms expecting more business. Firms believe that initiatives to achieve operational efficiency will benefit them.
Large ISV's continuing co development efforts with Indian based enterprises. Most of the SI's I have spoken to continue with co-development efforts with IBM, Microsoft, Oracle, and SAP.
Expectation in the declining number of upgrade projects. System integrators confirm a slow down in the pace of upgrade projects. Projects shift from upgrade to the optimization of existing landscapes.
Growing number of clients asking for third party maintenance. Triangulation among Forrester clients, system integrators, and user groups confirm a groundswell of companies asking their solution providers for options to reduce the cost of maintenance. Vendors have been "quietly warned" by the large ISV's that this would not make for a good partnership.

The bottom line - India remains optimistic despite worldwide downturn. There is a sense of slow-down, but this is relative to the growth rates of 50% Y-O-Y growth that some firms have faced. Given the talent pool and opportunity to provide cost savings to the rest of the world, many of the Indian firms are in a unique position to gain new business and take business away from other info tech companies. So long these firms focus on aligning business drivers to operational efficiencies and regulatory compliance, they will continue to be in a good position to provide thought leadership and potentialy earn a seat as a trusted advisor. Your POV. What are you seeing in the India market? Are these trends resonating with your observations? Feel free to share with me your thoughts. You can post here or send me a private email to rwang0@gmail.com. Copyright © 2008 R Wang. All rights reserved.