Indian I.T. Challenges for Global Competitiveness

1
Indian I.T. Challenges for Global
Competitiveness

• Presented by
• Niraj Vedwa
• Head- Global Sales Marketing
• Nucleus Software Exports Ld.
• ____________________________
• IIFT-NASSCOM Seminar
• December 13, 2004

2
Agenda

• India ICT Global Competitiveness
• Market Trends
• Strategy
• Getting Started
• Challenges
• ICT convergence
• Case studies

3
Are We Globally Competitive?
4
Are We Globally Competitive?

• Global Competitiveness
• India Ranks 55 in year 2004 ratings, one up from
  its ranks as the 56th most competitive nation in
  2003.
• This is below China at 46 (it slipped down 2
  places from 44 in 2003).
• It is also below countries as Australia, Canada,
  South Africa, Mexico and quite a few East
  European Countries.

• Global ICT Competitiveness
• We come 45th Way ahead of China at 51st, yet the
  others mentioned above are still ahead. This is a
  reflection of
• the environment for ICT offered by a given
  country.
• the readiness of the community's key stakeholders
  (individuals, businesses and governments).
• and the usage of ICT among these stakeholders.

Source Global Competitiveness Report 2004-2005,
Networked Readiness Index World Economic Forum
5
So what?

• While we are a Leader in ICT, our foundations
  (in the Industry) are not rock-solid. We carry an
  early mover advantage.
• As a Short-Term perspective, we can leverage on
  the discrepancies between home base and serviced
  nations.
• As a Long-Term Strategy we would need to be
  amongst the leaders in competitiveness on both an
  Industry (here ICT) and a Overall level to
  maintain and grow this lead.

Having set the pace for the next few minutes.
6
What's in it for us?
The Global ICT Market

• Total ICT market value 2.8 trillion.
• Communications Services Equipment has largest
  share at 53.
• USA has largest ICT spending of 1.06 trillion.
• Japan in second position with 349 billion.

eito.com Data as 2004 itaa.org
7
Wheres the Market Going?
8
The Market Trends
Dot Com Crash

• Global ICT market to grow at 8 from 2003 through
  2007.
• The rate is more than expected Global GDP growth
• USA to relinquish position as highest per capita
  ICT spender
• Switzerland 4,282/-
• USA 4,147/-

itaa.org eito.org
9
Regional Growth

• Focus shifting from Developed to Developing
  Nations
• Highest growth in Eastern Europe with a spending
  of 68.8 billion in 2007
• Asia to be the power house with a spending of
  811.1 billion in 2007

itaa.org
10
Business Strategy A Paradigm Shift
11
And the Changing Mindset of the CIO
12
Getting Started for Global Competitiveness
13
Defining Global IT
Infrastructure People
Policies Physical Assets Politics

• Growth
• Economic
• Technological
• Social
• Cultural

Products Hardware Software
Sourcing ITES
Partnerships Countries Enterprises
Symbiotic
14
Global IT Models
15
IT Globalization - Characteristics

• Globalization of IT
• Opportunity Prosperity
• Challenge Diversity
• Technological isolation- a thing of past in the
  open market scenario
• Governments to realize the Economic Value of IT
  (EVIT)

16
Global Market India SWOT

• Opportunities
• Cost and Revenue
• Lower salaries
• New markets
• Time Distributing work 24 X 7
• Resources Pool of worldwide talent

• Strengths
• Early Mover Advantage
• India Brand
• Multinational alliances
• Balanced risk

• Threats
• Increased Discrepancies
• -Income
• -Education
• Digital divide
• Emerging Players
• Unable to resolve differences

• Weaknesses
• Lack of knowledge
• Governance Bureaucracy
• Unpredictable infrastructure
• Cultural/linguistic differences

17
How MNCs Win Globally

• Get to new global markets before competition
• Counter-attack the competition at home
• Invest in new technology
• Design optimum sourcing policy
• Install the right managerial system
• Take early losses if necessary re-capitalize
• Rely on strategic alliances

18
To Win in a Global Environment BRANDING
UNITE DIVERSE STAKEHOLDERS
APPRECIATIVE
1
6
ENDURING
2
5
EXTENDABLE
3
4
MOLDABLE
VERSATILE
19
Branding Historical Evolution

• Brand building involves trust, consistency,
  uniqueness, targeting and internal marketing.
• Winning Brands are like personal leadership.
  They require passion, empathy competence.

20
Challenges for Global Competitiveness
21
Challenges

• Strategy
• Branding
• Different languages/Culture
• Communication/ infrastructure
• Legal infrastructure
• Political environment
• Influence in the target country

22
Influencing Factors

• Economic Legal
• GDP,per capita income
• Wealth distribution
• Affordability index
• Labor force and distribution
• Regulatory laws

Social-Cultural Literacy
Population,age distribution Depth of
education English competency Immigration
emigration Trust

• Political
• Form of government
• Censorship
• Corruption
• Government guarantee

Technological Availability of
telecom channels Demographic distribution of
IT Total number of IT vendors Government
funding of IT
23
Matrix of IT Powers
gartner.com
24
Matrix of IT Powers
More
Advantage India We have a 10 year accumulation of
Process and IPR Wealth from our endeavors across
the Globe
Resources Infrastructure
We can Capitalize on this with a proper backing
from our government to move far above the value
chain.
Fewer/Less
25
The New Approach Move up and
26
Summit the Global VALUE CHAIN
Lead on Domain Knowledge
Alliances
Partnerships
Branding
Global Presence and Acceptance
Customer Value
Bundling
References
Third-Party Leads
Intellectual Domain Knowledge Consolidation
Building Customer Centric Solutions
Predicting Domain Dynamics
Intellectual Domain Knowledge Accumulation
Invest in Domain Expertise
Churn RD investments
Enterprise wise Commitment to Intellectual
Property Development
Foundations to ICT and Value Development
27
Japan ICT integration 2010
? Kondratieff wave (5th) ? Media cycle
(4th) ? NII goals ? Next-generation satellite
communications system ? Complete removal of all
tariffs on IT equipment (APEC) ? Removal of
boundaries between broadcasting and
communications ? End of analog broadcasting ? Digi
tization of nationwide CATV ? The Super
Internet ? Target year of the New 10-Year
Economic Plan 2010
BSAT (Feb. 1997) Broadcast satellite No. 4 first
unit
BSAT-2a (Aug. 2000) Broadcast satellite No. 4
second unit (CS at 110 degrees east longtitude)
Super Bird C (1997)
Music Bird JFN Satellite Broadcast to start
digital broadcasting Broadcasting to mobile
devices
?Agreement on CAS ?Agreement on EPG(electronic
program guide) ?HDTV (high-definition TV) ?CS
data broadcasting music delivery via the
Internet (Sony) ?BS data broadcasting(34
companies including Matsushita) ?E-mail service
(IT Vision) ?Communications service (SKY
PerfecTV)
Integration of BS and CS systems BS digital
broadcasting Data broadcasting
Fixed satellite cellular phones 2005?
?
?2001
To digitize throughout Japan ?2006
1999?
?2002 Wireless transmission system for motion
pictures (MPT)
? Single platform for all network
equipment ? Capable of 1000 times higher data
transmission
?1998 Music delivery via the Internet (NTT, etc.)
Start of CS digital broadcasting PerfecTV 1996 ?
?2001 Next-generation mobile phones
Realization of the Super Internet (3rd
generation)
?1997 DirecTV Data communications for business use
?2003 Start of ground-wave broadcast services (in
three major metropolitan areas)
?1999 ITU standards set for next-generation
mobile phones Start of "i-Mode" services
?1998 Caller ID service
WOWOW(1990) Star Channel (1992)
Satellite television CS BS
?2000 Start of pilot broadcasting
?1995 Personal Handy Phone system (PHS)
?1998 Start of broadcast services in the UK
USA Experimental broadcasting in the Kanto area
BS digital sound broadcasting ?2001
Mobile communications Cellular
vehicle-installed phones
Papala Vision Video billboards ?1995
2005
?1996 Experimental broadcasting in the UK and USA
To install fiber-optic circuits on trunk
lines. To digitize CATV broadcasting
Liberalization of digital broadcasting
?1999 AM FM Digital
?1998 Community FM Net Start of digital
broadcasting in the UK
?2001 Introduction plan (by MPT) for UHF (more
than 13 channels) Opening of optical-fiber
networks for CATV
Ground-wave TV broadcasting
Six BS digital broadcasting (HDTV)
companies (Operation planned in 1998)
2000
FM teletext broadcasting "Visible radio" 1994?
?1999 Applications for the license of Type I
carriers increased. Jupiter started experimental
digital broadcasting
?1996 Nippon short-wave broadcasting Digital
short-wave broadcasting
?1998
WOWOW (Japan Satellite Broadcasting)
BS Japan (TV Tokyo)
Ground-wave radio broadcasting
1997
St. GIGA Music broadcast (1991)
?1994 Video game distribution by Saint Giga
BS Asahi (TV Asahi)
Caller ID service Caller's phone number is
shown in the phone display. MPT Ministry of
Posts and Telecommunications
BS Nippon (Nippon TV)
CTIComputer Telephony Integration Call
centers Unified message (Integrated system to
handle voice mail, e-mail, fax and other
messages.)
Diversification of CATV services
CATV
? Data tranmission (connection to the Net
public network) ? Dedicated services (metering of
water usage data exchanges between companies)
? Sound transmission (phone service)
FNS Space Star (Fuji TV)
Japan Digital Communications (TBS)
28
Computer Business Models
1st shift of paradigm
2nd shift of paradigm
3rd shift of paradigm
U.S. mainframers
NEODAMA USA in 1987 Japan in 1992
The Internet Infrastructure of network society
with the development of browsers
IBM-led age
Wintel age
MIND revolution
IBM360 IBM360 was developed from the design
concept of "an all-purpose machine." IBM
dominated the oligopolistic market taking price
leadership.
Post PC-centric age
NEODOMA a coinage from the words of network,
open, downsizing, and multimedia
Open
Domestic market closing
Emergence of new business models
Daily commodities
System integrators
GE RCA
Vendor-led model
Personal computers
-Advancement of semiconductor technology -Wide
use of AT machines -Penetration of
WS/UNIX -Liberalization of telecommunications and
broadcasting -DOS/V (Elimination of Japanese
language barriers)
Seven dwarfs
Vertical integration model
Low-margin model
? Outsourcing of system development ? Large- and
small-scale systems
Data centers
BUNCH
Software
Hardware
? Housing of servers ? Call center functions
Japanese mainframers
Highly profitable model
Strategic alliance model
ASPs (Application service providers)
Fujitsu, Hitachi, NEC, Toshiba, Mitsubishi, and
Oki
All-purpose machines
User-led model
? Enhancement of information transfer capacity ?
Provision of resources for e-business ?
Licensing for software use
High-tech products
Globalization
Closed
(Wearable)(Pervasive)
Fixed models
Desktop models
Notebook models
Mobile models
Wearable/pervasive models
Information appliances Smart packs Smart devices
General-purpose mainframes
Small/business computers
AT machines (Wintel)
Removal computers
Network appliances
Japanese word processors
?
1946
1964
1987
1992
1995A1
2010
?
?
?
?
Black Monday in the U.S.
Burst of the bubble economy in Japan
Multimedia age
First year of the Internet Age
Design concept of "one-machine-for-all-purposes"
? Before the Internet After the Internet ?
29
Post-PC-centric Age
Wearable devices
Mobile devices
Access to the Internet with mobile devices
?IMT2000(2001.5) ?Shift from a "tool for
conversation" to a "gateway to
information" ?WAP (wireless application
protocol) ?Introduction of XML for ?E-mail
exchanges and Web-page viewing ?Transmission and
reception of color images ?Net banking and
ticket reservations
(Lighter, more compact, and easier-to-use devices)
(Pervasive/invisible)
Dedicated terminals installed at
?Information kiosk ?Post offices ?Convenience
stores
Peripherals
?Sunglasses-type devices ?3D cameras
?Pocket-type devices for data entry and output
Micromachines
E-mail-only terminals
Windows CE machines
Wearable computers
?Wearable PCs and displays ?Headphone-type pocket
computers ?High-performance hearing aids
(put into the middle or inner ear) "Mobile
Assistant" "Eye Trek" by Olympus
?Micro-endoscopes ?Chemical reactors ?Micro-robots
?"Tegacky" (Toshiba) ?"Pocket Board" (DoCoMo)
?One-touch boot-up ?Voice-operated
system ?Cordless
Personal data assistants (PDAs)
Next-generation vehicle-installed systems
Palmtop computers
Multimodal PCs
Voice- and gesture-operated PCs (RWC Project by
MITI) Hands and fingers, Braille characters
"Zaurus," "Mobile Gear," "Work Pad" ?Browser
and e-mail functions added ?GPS and PHS functions
Automatic drive, brake control, navigation,
airbag inflation, and the Internet
?Digital camera cards ?MP3 player
functions ?Access to the Net ?PIM functions
Drawer-type PCs
Wristwatch-type PCs
Hand-held PCs
Diversification of Network Appliances
? "Ruputer" by SII ? "PC X" by Cacio
Network appliance Information appliance Smart
packs Smart devices
?Keyboard-/pen-input systems ?Connections with AV
devices ?MP3 player functions ?Embedded digital
camera
AV devices connected to the Net
Spread spectrum
Broadband technology Kinds of terminals increased
from PCs (to mobile phones and TVs) Thin
client-FAT server system (Dual functions of
database and application servers)
?Mobile phones connected to the Net ?Digital
cameras movies over the Net ?MP3 mobile
players ?Healthcare device meters ?Transmitters
for the elderly
Narrowband
Primary batteries
Lighter Thinner Longer Greater
to carry to put in life power
(expendable)
Wireless connection
Secondary batteries
(rechargeable)
Infrared
Fuel cells
Microwave
Submillimeter wave
EHF (extremely high frequency waves)
First-generation information appliances (Fall
1996)
Car navigation systems
?Guide for the visually disabled measurement of
a carry of a golf ball ?Vehicle Information
Communication System (VICS) ?CS digital
broadcasting Network information ?Voice control
and birds-eye-view display ?GPS mobile phones
GPS wristwatches
Terminals embedded for network connection
Control devices
Second-generation information appliances (1998)
Electronic book players
Game machines
?Arcade games ?Home-use video games
(E-trade) ?Pocket game machines (Game
Boy) ?Key-chain games
?STB ?Network terminals ?Home servers
?Addition of sound and images ?FM digital
broadcasting ?Digital CD-ROMs
External connection terminals Sony, Fujitsu,
and Matsushita
Network connection of white goods
Digital communications terminals
Online karaoke service
Dreamcast
?Use of satellite TV and CATV
?Computers embedded (Pervasive)/external ?Network
connection of home-use AV devices ?Refrigerators/m
icrowave ovens/washing machines ?Adoption of
one-button control
Playstation 2
?Automatic translation of text and voice ?CTI
(computer telephony integration) ?Call centers
for PC users ?Internet phone, fax TV
?Airwave distribution ?DTM computer music ?Mobile
online karaoke ?Distribution through TV
phones/ISDN ?Simulation-play karaoke (samisen,
etc.)
Digital cameras / VCRs
AV devices
Multi-functional ?DVD player machine ?Game
machine for the software designed for Playstation
1 ?Connection to the Net ? Playstation 1 sold 70
million units, establishing itself as a
de facto standard. ?Rapid expansion of game
software contributed to the success.
Emergence of killer-software is very likely.
?Standardization of photo print
specifications ?Increase in pixels ?Network
connection
Connection systems of network appliances
?Two-way digital TVs ?MP3 players ?Image
production machines ?IC recorders ?DVD players
Personal computer NC
?Echo Net Matsushita (operation through a power
code) ?Home API Wintel (through PC
operation) ?HAVI Sony and Matsushita
(connection of digital AV devices) ?Jini Sun
Microsystems (software application), etc.
3 companies including Fanuc
(with the addition of communications functions)
(Emphasis placed on easy use rather than
functions)
Single-purpose devices to serve as
multi-functional terminals
Digital information appliances
30
Cell phones as AIO unit
Third-generation cell phones
Actual use of broadband communications
technology in 2000
?Goals? ?Higher speed ?Open systems ?Reasonable
charges ?MPT goals for 2015? ?Study to start from
2000 ?High-quality, large-volume digital motion
pictures ?Capable of worldwide use
Broadband telecommu-nications technology
Next-generation cell phones
The International Telecommunication Union (ITU)
decided to adopt a worldwide standard (March 1999)
?Integral system combining two formats? W-CDMADev
eloped in Japan and Europe (Wide-range
code-division multiple access) NTT DoCoMo
?????? Introduction in 2001 J-Phone
??????????? Introduction in 2001 In Europe
????????? Introduction in 2001 cdmaOne2000Develop
ed in North America (Code-division multiple
access) In North America ???Introduction likely
in 2005 DDI ?????????????? ?Features? ?Animation
quality as good as present TV displays ?Internatio
nal standard (capable of worldwide
use) ?High-speed data communications with PCs
Terminals capable of worldwide use Transmission a
nd reception of large data
2005 At least 3 billion units of third-generation
cell phones expected to be used.
Transmission speed 10-20Mbps, 10,000 times
higher than the current level
2005 Fixed satellite cell phones (MPT)
2002 Wireless mobile communications for motion
picture transmission (MPT)
First-generation cell phones
2001 Start of the study on the third-generation
cell phones (MPT)
Different cellular formats used in each service
area (incapable of combined use) Feb. 1992
Start of i-Mode services
2000 Set-up of a work group by ITU for
standardizing the format of the third-generation
cell phones. Set-up of a study group by MPT to
work on the third-generation cell phones jointly
with the private sector.
Dec. 1999 NTT DoCoMo started color-display
services for its cell-phone subscribers. Telecomm
unications Council advised to adopt the ITU
system. Fujitsu succeeded in transmitting data
at 1 terabits/s to the distance of 10,000
km. Kochi University of Technology succeeded in
transmitting data at 20Gps to the distance of
3,000 km. NTT DoCoMo attained a wireless
technology capable of 10-20Gps transmission.
Japan PDC system Europe Asia GSM system North
America cdmaOne (by Quarcom) i-Mode NTT
DoCoMo cdmaOne DDI, IDO EzWeb Nippon
Telecom ?Internet connection service ?Use of HTML
(hyper text markup language) ?Mobile banking
functions ?GPS navigation service ?E-mail service
for up to 250 characters
Transmission speed 2Mbps, 200 times higher
than the current level
With functions of text and simple image display A
nalog systems to be replaced with digital systems
May 1999 Kyocera introduced mobile color TV
phones.
Apr. 1999 Text display service started by cell
phone carriers. NTT DoCoMo introduced "Doccimo"
that can be used as a cell phone and PHS started
GPS navigation services that offer town
information as well expanded the international
service areas to 201 locations.
Mar. 1999 ITU set the international standard for
the next-generation cell phones.
Apr. 1987 Cellular phones
Dec. 1979 Car phones
July 1997 PHS
June 1998 Wireless call
Dec. 1998 Under the Iridium project, global-scale
satellite cell phone services started. ITU set
the international standard for Internet fax.
Transmission speed 9,600bps
June 1998 Networked TV phone services
started. Text communications via cell phones NTT
DoCoMo (Short Mail) IDO (Petite Mail), Astel
(Moji Talk)
July 1997 PHS services started.
Apr. 1987 Cellular phone services started.
Dec. 1979 Car phone services started.
31
MIND Revolution
Basic functions
Access Exchange of content
Networks Digitization of broadcasting and
communications
Digital database Digital content
Seamless communications regardless of devices
Seamless environment regardless of regions and
locations
MIND
MIND
MIND
Personal computers
(Clients) Mobile information terminals Mobile
communications Digital broadcasting
terminals (STB)
Removale (Portable)
The Internet
Game machines Car navigation systems Online
karaoke services Information appliances GP3
players
DVD D-VHS CD-ROMs CDs/MDs Noncontact memory
Digital cameras Digital VCRs MP3 players IC
recorders
Online services
Storage media
Media
Sneaker networks
Wireless-Mobile devices Wired-Fixed devices
Larger data Higher speed
Transmission paths
Components
Control
Conduits
Content
Six "con-" words
Contact
Containers
Context
Communications broadcast satellites
Stereoscopic vision systems
Multi-use types
Digital ground-wave broadcasting
CTI
Network terminals
Integration of AVCC
Accessibility
Arrival of an era of broadband communications
Browser-embedded cell phones
Distribution of kanji fonts
Bluetooth
Mobile devices
Materials for production
Ground waves
(Konjaku-moji-kagami)
One-touch operation
Wearable devices
News-flash types
IMT2000 (June 2001) 3rd-generation cell phones
(around 2010)
CATV networks
AV recognition and search
Multimedia
MIND
Multimodal
Mobile/Data Transmission
Multimedia
Friendly to the hearing- and sight-impaired
Optical soliton transmission
Wave-length multiple communications
Music delivery via the Internet
Daily life
Voice translation
Wide variety of knowledge and information
6-kon (6 fundamentals) Eyes, mouth, ears,
nose, body, and mind
Ubiquitous
Voice and sound
Still pictures
Data responsive to the five senses
Motion pictures
Languages and text
Whenever
Wherever
Whomever
Whoever
Closer to human senses
Friendly
Easy
Flexible
Close
Kind
Artificial intelligence

32
Case Studies - China
gartner.com
33
Case Studies - Brazil

• Society for Promoting Software Export (SOFTEX),
  joint initiative of National Technology Research
  and Development Council,the Brazilian Ministry of
  Science and Technology,and the United Nations
  Development Program, formed in 1993.
• Original budget of 9 million in 1993 rose to
  100 million in 1996.
• Phase I (1993-96) deployment of an
  adequate infrastructure and other means, for
  Brazilian companies to launch export efforts.
• Phase II (1997 to 2001) management was turned
  over to SOFTEX, to be more business-oriented and
  result-driven.
• Phase III (2002 onwards) Government funding
  phased out
• Brazilian software and services increased their
  sales in Asia, Europe,South and North America
• Revenue from exports rose to 27 million in 1997
  from less than 1 million in 1991

gartner.com
34
Challenge is a dragon with a gift in its mouth
Tame the dragon and the gift is yours
- Noela Evans