Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

India’s IT industry witnesses major disruptions in 2017

Author: IANS/Wednesday, December 27, 2017/Categories: IT & ITeS

India’s IT industry witnesses major disruptions in 2017

By Fakir Balaji 

Bengaluru, Dec 27 - The resilient Indian IT industry, which has been going through challenging times on multiple fronts, faced disruption in 2017 from increasing automation and the boardroom spat in software major Infosys spilling into the public domain.

Though the $150-billion (almost Rs 10 trillion) software sector reconciled to single digit export growth of 7-8% for the 2017-18 fiscal, demand for more automation and using Artificial Intelligence (AI) in the services had put the vendors under pressure to hone the skills of their techies in the thousands and invest in new technologies to deliver on time for global enterprises.

"The Indian IT industry has been going through challenging times due to disruptive technologies, changing business models, rising protectionism, anti-globalisation and political and economic upheavals slowing its growth," Nasscom President R. Chandrashekhar said here.

Brexit and the sluggish demand in Europe also lowered the industry's export growth from 9-10% in the last fiscal (2016-17).

"The lower export outlook is a result of political and economic uncertainties impacting decision-making and discretionary spend," the National Association of Software and Services Companies (Nasscom) admitted in a statement.

Software exports contribute about 80% to the industry's revenue, with the US market generating 60% of this, while the domestic market is projected to grow 10-11% in 2017-18.

"Modernisation of clients' IT operations and adoption of new technologies such as SaaS (Software As A Service) applications, cloud platforms, BI (Business Intelligence), cognitive and embedded analytics for digital projects of enterprise customers have been the industry's growth drivers in 2017," noted Chandrashekhar.

According to Nasscom Chairman Raman Roy, the industry has reinvented and is focused on building digital solution offerings through a combination of business model changes and investment in products and platforms.

Admitting that the industry would need bold and imaginative action to resolve issues, Chandrashekhar said opportunities were unfolding, as new sectors such as healthcare, energy, transportation and manufacturing were also adopting ICT solutions to sustain, compete and grow.

Besides traditional sectors like banking, financial services and insurance (BFSI), telecom, retail, utilities, transport and logistics, a host of other verticals are investing in automation, AI, cloud computing, data analytics, machine learning, robotics and Internet of Things (IoT).

"Adoption of new technologies by traditional and new sectors like healthcare, education, gaming and entertainment, e-commerce, digital, public services and internet mobile are making the IT industry invest in skilling and reskilling their talent to sustain the momentum," asserted Chandrashekhar.

On the flip side, innovation and tech start-ups have also faced headwinds, as angel investments and initial funding have sharply declined over the months.

"Though the ecosystem for start-ups is maturing and thriving on smart talent, raising funds to sustain growth and expand the market reach is challenging as their potential investors have become risk-averse due to uncertainty," noted Chandrashekhar, a former Telecom Secretary and regulator.

Skill shortage in developed countries implied huge opportunities for the Indian IT industry to invest in building human capital talent and developing new platforms for digital business.

Hiring in traditional services like application development, testing and maintenance will, however, continue to decline due to automation and AI.

"The declining trend in hiring is secular and will continue due to automation, course correction and technology induced changes in the business models," Chandrashekhar added.

Infosys, meanwhile, was rocked by boardroom battles that led to the dramatic exit of its first non-promoter Chief Executive, Vishal Sikka, in August and return of co-founder Nandan Nilekani as Chairman to steer it out of troubled times.

What began as an ethical issue for good governance the IT major is known for, had blown up into an open war between co-founder N.R. Narayana Murthy and its previous Board on the buyout of a US-based software firm (Panaya) and the severance pay to its former Chief Financial Officer, Rajiv Bhansal, in October 2015.

While Sikka tried to play down the issue, terming governance lapse as media speculation, a whistle-blower's letter to the stock market regulator (SEBI) on the $200-million Panaya acquisition deal in February 2015 forced Murthy to red-flag the issue again with the Board members, including its former Chairman R. Seshasayee and Sikka.

When an international law firm and a risk consultancy found no evidence of wrongdoing in acquiring Panaya, Murthy insisted on making their report public and advised the Board to be transparent in all its decisions.

Unable to any more take the "unrelenting, baseless, malicious and personal attacks" on him, Sikka resigned on August 18 -- for which the previous Board blamed Murthy. The open spat also brought down the company's stock by 10% in a single day.

The return of Nilekani, 62, as non-Executive Chairman on August 24 led to the exit of Seshasayee, co-chairman Ravi Venkatesan and Directors Jeffery S. Lehman and John Etchemendy.

Though Murthy was relieved to have Nilekani back to guide the company, he was not happy with the latter too finding no wrongdoing with the Panaya deal or excess compensation to Bansal.

To prove that "all is well that ends well", the Infosys Board on December 1 hired former Capgemini veteran software geek Salil Parekh as its new Chief Executive from January 2.

Print Rate this article:
No rating

Number of views (222)/Comments (0)

rajyashree guha

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free