Success Mantras for the IT Industry in the

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

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. October 11, 2003 Success Mantras 2

Success n Economic Increase in foreign exchange reserves Improvement in infrastructure Preferred developer for most clients Positive impact on local economies n Other Improved opportunities Improved respect in the international community October 11, 2003 Success Mantras 3

Comparison against? n India n Others October 11, 2003 Success Mantras 4

Some Statistics [Ref: Skoch Consultancy] n Software exports: n n n Revenues: $8 billion in 2002 30% growth Software/Hardware domestic: n n Revenues: $5 billion in 2002 PCs sold: n n October 11, 2003 1. 8 million 14% growth Success Mantras 5

Statistics: National Level n Poverty: n n Reduction from 44% to 20% below poverty line over 15 years. Foreign exchange reserves: $86. 2 b (August 2003. 7 th largest in the world) n IMF dues paid off in 2000 n Loans to 7 heavily debted African countries written off. October 11, 2003 Success Mantras 6

Statistics: Manpower n Engineering colleges: 1064 -->0. 3 M engineers/year n Engg. Diploma granting colleges: 1231 -->0. 22 M diplomas/year n Institutes: 737 -->37 K MCA/year n Total IT professionals: 0. 15 M in 2005 -6 Reference: The Hindu Aug 11, 2003 October 11, 2003 Success Mantras 7

Statistics: Comparison of Annual Revenues n India’s revenue from software: $8 b in 2002 IBM n n 2002: $80. 0 b n n 2001: $85. 0 b 2003: $21. 6 b (second quarter) Microsoft n n n 2001 -2002: $28. 37 b Office products: $18. 9 b Intuit n October 11, 2003 2002 -2003: $1. 6 b (tax and accounting products) Success Mantras 8

Services in the past n Pre-WW II: Malaysia tea gardens n ‘ 70 s: Middle east construction boom n 90’s: IT boom October 11, 2003 Success Mantras 9

Where are we? n n 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 $300 M/year? . Few “Made in India” software products sold worldwide. October 11, 2003 Success Mantras 10

Questions n Should India remain primarily a software service provider? What happens to India’s innovation, creativity, and world image? n How far can the software services sector take India? Which nation became developed based solely on services? n n 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… October 11, 2003 Success Mantras 11

The Japanese Approach to Industrial Dominance n n After WW II: Economy in shambles. Product development goes full steam. Technology borrowed shamelessly from the west. n Products are inexpensive but poor quality. n Improvement in quality and sophistication becomes the norm. October 11, 2003 Success Mantras 12

The Japanese Approach to Dominance [2] n Significant investment in applied and basic • Japan: • US: • Germany: research: 3. 29% of GDP 2. 6% of GDP 2. 5% of GDP n Major failures encountered (e. g. the Fifth generation project) n However…poduct quality and variety improves. n In 40 years, Japan is a (respected) world leader in many areas. Source: Statistics Bureau, MPHPT October 11, 2003 Of course, hard work, discipline, and government support were at the heart of the Japanese revolution. Success Mantras 13

Mantra One Invest in software product development and marketing. October 11, 2003 Success Mantras 14

Mantra Two Invest in basic and applied research in IT. October 11, 2003 Success Mantras 15

Mantra Three Spread education in software engineering. October 11, 2003 Success Mantras 16

Mantra One: Strategy: Product Space Invest in software product development and marketing. n Partial product space: • OS: Windows, RT, etc. • • Office: Word, Powerpoint, Excel etc. Application: SAP, Banking, ERP, etc. Client specific: Embedded October 11, 2003 Success Mantras Very high risk/cost High risk/cost Medium risk/cost Low risk/cost 17

Mantra One: Strategy: Development n Reverse engineer. Offer backward compatibility. Attractive pricing. • n For capturing the market of existing products. Novel design: Identify need and create new products • • n 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. • October 11, 2003 Develop an SSP paradigm for software delivery and use. Success Mantras 18

Mantra Two: Strategy Invest in basic and applied research in IT. n Industry/University collaboration. • • n 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. • n Focus on short term “proof of concept” idea prototyping and evaluation. 2% of industrial revenues towards research-->$160 M/year October 11, 2003 Success Mantras 19

Mantra Three: Strategy: Product lifecycle Spread education in software engineering. n Product lifecycle. • • October 11, 2003 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 20

Mantra Three: Strategy: Quality n Quality Assurance • • Do not emulate Microsoft. Emulate Sony. • October 11, 2003 Focus on extremely high quality products Inculcate quality culture amongst students. Teach them techniques for testing and quality assurance and how to apply them in practice. Success Mantras 21

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