Indian firms should focus on network

The Indian IT services industry has grown due to lower personnel cost and cost as a differentiated feature can last only so long, said Pramod Haque, Managing Partner of Norwest Venture Partners in Bangalore on Monday. To overcome this, he said, Indian IT companies should focus more on network integration and reduce their dependance on systems integration.

Delivering his keynote address at a seminar on 'Marketing, Selling & Serving the US customer', the celebrated venture capitalist said: "Network integration will be the next thing that enterprises will focus on. This is a $100 billion industry. Corporations will not be able to deploy manpower and park huge investments in maintaining networks to protect themselves against deadly viruses, spams, intrusion detection and so on. These works will be increasingly outsourced and Indian IT industry should start to focus on these."

He further added that Indian IT industry should partner with US companies with advanced technical capabilities and sell total solutions. "India should transform from a low cost producer to a strategic global partner for US enterprises," Haque noted.

Commenting on the surge in IT spending in the US, he said that IT spending in 2004 has been firm.

"Initial forecasts for 2005 is optimistic and priorities for CIOs over the next 12 months are security, both general software and network equipment, wireless LAN, storage hardware and software in addition to the portal software," he noted.

Haque was of the opinion that the networked enterprises will carry the business forward and venture capitalists should understand that exit options have dropped and are resembling those of early 1990s.

"It requires $15-20 million to build an enterprise software company, while it requires $30-35 million to build a communications equipment or communication component company. One must be absolutely committed to this space to make a winner out of this segment and must understand the changing role of network in business," he noted, adding that focus on capital efficiency should be of high priority as in any business.

Stating that the network is evolving at a fast changing pace, with massive proliferation of both computing and non-computing devices, besides new and more demanding applications, any IT networking company "should take a long-term view of thinking beyond technology wherein technology, devices and applications will evolve and should be ready with solutions for this change."