Digital Zoom

This is the 21st issue of the Top Twenty. For 21 straight years, the issue
has provided analysis and insight about the infotech industry. We are happy to
be presenting it once again. While you will find the data in this and three
subsequent issues, let me put down some thoughts that are not entirely data
based. Keep in mind that this is a digital zoom being applied and therefore the
detail level is a bit fuzzy.

l The Internet will see a rebound.
After the dotcom bust it went below the radar screens. Expect a solid and mature
return in terms of quantity and quality of connectivity and products and
services on offer.

l IT penetration in the SMB
market/medium sized towns will finally grow—and rapidly. The talk of this year
will change to action as vendors step up their market development efforts in
these untapped markets.



l The Home PC will be marketed as an AFD—All
Function Device. It will become the music player, jukebox, photo album,
alternate TV, communicator—all rolled in one. Intense competition will force
vendors to offer these and other addons with PCs.



l The Corporate PC will become just
another device-if it has not already become one. No frills. No bells and
whistles. Just essential stuff with a high premium on reliability and service.
Brand names will continue to be seen as being more reliable and offering better
service—some-times erroneously.

l BPO will keep booming regardless of
the backlash. But look out for selloffs to interna-tional companies. A few
players will find the lure of the dollar too tempting. Also look out for more
and more captive BPO outfits coming up. The industry will grow, but it may not
be 'Indian' companies that will lead the charge.

l BPO People issues are unlikely to die
down soon. While the attrition issue has been identified and analyzed, the
solutions are only being contemplated/discussed. It will take more time to find
lasting solutions.

l Music downloads of the unpaid kind
will continue unabated. Paid music down-loads in India will happen, but like
waves in the backwaters. No major increase can be expe-cted because Internet
access is low, there are few options, costs are high and download speeds are
low.

l Digital marketing will see a growth.
On line spend will creep up to 3-5 percent of total media spend. The growth will
be limited to a few areas—information dissemination, lead generation,
community building etc.

l Commercial messages on your mobile
phones will grow in the form of SMS and voice. The numbers may not be as large
as email spam, but could be enough to become irritants.

l Mobiles will also spread into the
countryside. Phase Two of the mobile revolution has already started and see the
momentum grow. Even with 36 million odd connections (and a 500 percent plus
growth rate) there is a huge potential waiting to be tapped. The limit is the
speed at which the infrastructure can be built up. Nothing else.

l E Commerce will grow in triple digits—
with the small base that exists, the absolute numbers will not be earthshaking,
but will boost confidence in the medium and open the portals for explosive
growths in subsequent years. The initial jump will happen in areas like
ticketing, banking, stocks, books, gadgets and other off the shelf standard
items.

l Do not expect any major relief from
spam and virus attacks. Better technology solutions will be found—but will
also be overcome by spammers with regularity. Spam will end only when its cost
becomes higher than the returns to the sender. Virus attacks at the rate of one
serious one every qua-rter will continue. There is no reason to believe that the
num-ber of sick people who make and send viruses is decreasing. Fortunately much
of the stuff is harmless.

l The Outsourcing buzz will echo in the
domestic market too. Expect at least a dozen big deals to be finalized. Expect
some serious moves from the IT software companies to try and tap the local
market.

l Linux will grow—maybe 10-20 percent
installations will run on it. But do not expect it to displace the competing
envi-ronments completely. Coexis-tence will happen in practice. Maybe denied in
public by some vendors.

l Expect broadband conne-ctivity in
homes and offices to move up. No quantum jumps here, but healthy growth that is
akin to revving up. Take off is a little distant. Broadband pen-etration is
driven by low costs and high bandwidth applica-tions. The former are still high
and the latter still low.

l The wireless will start becoming
real. Concepts and standards will give way to products and services based on
wireless connectivity for computers and other electro-nic devices. This is one
set of products that offer so much convenience. As soon as the availability and
affordability improve—as they are showing signs off—expect the market to
zoom. If you do not believe that, please have a look at the entangled backside
of your computer just now.

l E-Governance will hap-pen in pockets
where the gov-ernments are secure and com-mitted enough to experiment with
technology-supported reforms. But the movement will be in fits and starts
with-out a universal momentum. Politicians will be looking over their shoulders
far too frequently to allow that.

l Intrusive marketing in the form of
telecallers, pop up ads on the net and climax busters on television will
increase. Do not expect the irritation value of these to tire out marketers who
are des-perate for innovation in incre-asingly competitive scenarios. The users
of this form of advertising may not be the technology companies, but they will
provide the required solutions.

l Search on the net will bec-ome a paid
proposition and a respectable revenue stream. Free search that returns more junk
then real data is a huge time guzzler and value for money alternatives will have
takers.

l Tech stocks will go up because they
are still the least susceptible to govern-ment interference. That is also a
prayer rather than a prediction.

Shyam Malhotra is the
Editor-in-Chief of Cyber Media publications.