slowdown offers opportunity to Indian IT industry
By Arun Kumar, Washington, March 3, 2008 (IANS)
economic slowdown in the US offers both a challenge and an opportunity
to the Indian IT industry though a weakening dollar is already hurting
their bottomlines, according to an industry leader. Certain sectors
do benefit from a slowdown and it would help the IT industry for
one as businesses turn to it for more cost effective solutions,
said Thakur, whose company earns around $140 million, or about 30%
of its global revenue, from North America.
have been through this once before in 2000-2001," said Arvind
Thakur, CEO of NIIT Technologies Ltd - a global IT services organisation
-in a telephonic interview with IANS from New York. "But the
weakening dollar poses a bigger challenge," he said. With the
Indian rupee appreciating 14% against the dollar, the margins are
under pressure for global Indian companies like NIIT Technologies.
the short term, his company for one is dealing with the problem
by increasing the efficiencies of its business with productivity
improvement, re-pricing and more offshoring - doing more work at
its offices in India than on site in the US. In the long term though,
"in a situation where currency (dollar) is weakening, what
we need to do is to move from a linear to a non-linear business
model," said Thakur. The IT service business is essentially
linear in which increase in revenue comes with an increase in headcount.
the new model, NIIT Technologies is focusing more on intellectual
property-based solutions that is creating some frameworks that are
more productive. These are either self-built or built through acquisition
of companies with such intellection property. NIIT Technologies,
for instance, with global operations spanning across North America,
Europe, Asia and Australia, has in the last five years acquired
four companies in the IT service industry sector and a couple more
in the education sector, said Thakur.
year it acquired Britain-based Room Solutions specialising in insurance
business. Its latest acquisition, German-based SofTec GmbH, is a
specialist in providing IT solutions and services in the airline
revenue accounting and operations space, said Thakur. "The
individual strengths of NIIT Technologies and SofTec are complementary.
The acquisition will strengthen our domain leadership to reinforce
our position in the travel, transportation and logistics (TTL) space."
Technologies has a strong presence in the TTL domain through its
association with industry leaders like British Airways, Sabre, DB
Systel, Emirates and SATS.
sees good potential for growth in North America where NIIT Technologies'
three focus segments encompass financial services, insurance and
travel and transportation. "We want to be the best in the areas
we focus on, not just good," said Thakur, an Indian Institute
of Technology, Kharagpur, graduate who became CEO of NIIT Technologies
in July 2004 when NIIT Technologies' software business was de-merged.
US is still the land of opportunity, the ultimate Mecca of professionals,"
he said even as many an Indian is going back to his roots with the
quality of life getting better back home in a booming economy. "It's
wonderful, wanting to get back."
was also not too worried about the effect of the US slowdown on
the Indian economy in general. The Indian economy has somewhat decoupled
from the US economy and was capable of sustaining good growth independently.
A downturn in a major economy like that of the US is bound to have
repercussions on the rest of the globe, but it would have a relatively
less impact on a country like India, he said.
North America, NIIT Technologies' operations span Europe, Japan,
Asia and Australia. It offers services in application development
and maintenance, enterprise solutions including managed services
and business process management to organisations in the logistics,
retail, manufacturing and government sectors.