Was it not Mark Twain who said, "Rumours of my death are greatly exaggerated?". I am thinking of Indian IT this week as the shares of Infosys, Wipro and Tata Consultancy languish with the rest of the lot as the global fever of the sub-prime meltdown grips markets.
The country's software service industry has been dumped twice after torrid affairs in recent memory. It kind of reminds me about how the Congress party is written off everytime a member of the Nehru family leaves power or the world. That family has a knack of bouncing back. So, I believe, is the case with Indian IT.
Indian IT was seen as a one-trick pony during the Y2K (Year 2000) bug days, but developed muscle building Internet sites and e-commerce platforms - before the Net and telecom meltdowns brought back the pessimists in 2001. That was the year when Infosys chairman N.R.
Narayan Murthy famously remarked about "fog on the windshield.". When the fog cleared, we had the BPO revolution in place, and Senator John Kerry ranting against more outsourcing to India in the US presidential elections.
Now, the sub-prime crisis has put a question mark on Indian IT's milch cow client sector --the banking and financial services industry. If Bear Stearns gets walloped, will someone in Bangalore get Bangalored? I think not.
India's IT industry has had a knack of converting ostensible crises into opportunity --and this time may not be different. What is different however is the fact that IBM, Accenture and Electronic Data Systems have expanded in India. So, it may be less about Indian companies and more about those with Indian bases.
A hint dropped on Monday when Royal Dutch Shell announced the award of a five-year $1 billion deal to EDS. Now, that translates as $200 million per year for the Texan company that lassoed Bangalore-based Mphasis. We know guys at Mphasis are excited about the deal.
My back-of-the envelope calculations show that even a fourth of the annual revenues from the deal can add 15 per cent to Mphasis's topline in the new fiscal year starting on April 1. It is not exactly an All Fools Day for Mphasis.
