Times just got more challenging for everyone – individuals, companies and countries. The future looks grim. Stock markets have got battered all over the worldwide – at one point, the Indian markets touched an 8-week low, having fallen by over 15% since September 11. The talk is now of an almost-certain global recession. For Indian software services companies, so dependent on an already-slowing US market for business, the events of the past week can only make matters worse with increasing bench strengths (employees not deployed on revenue-generating projects).
As entrepreneurs (and in some sense, we all are), one has to be optimistic and look at how to convert these near-term challenges into long-term opportunities. This is the time for real leadership. An excerpt from a presentation on Leadership by General Colin Powell:
Perpetual optimism is a force multiplier. The ripple effect of a leader’s enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a “what, me worry?” smile. I am talking about a gung-ho attitude that says “we can change things here, we can achieve awesome goals, we can be the best.” Spare me the grim litany of the realist,” give me the unrealistic aspirations of the optimist any day.
So, what can Indian companies, especially those in the IT sector, do in the present situation?
We need to build for the future. The opportunities of tomorrow do not go away. One needs to look beyond the next couple of years. There is a New Internet being created, which opens up a vast array of opportunities. A recent article in Forbes ASAP by Michael S. Malone talks about the convergence of developments in optics, semiconductors and real-time enterprise computing software which will enable the creation of the “Great Global Grid”. Writes Malone:
The Internet isn’t dead–it’s molting. And what will come out of the
chrysalis will be gigantic. Once again, let history be our
guide. Every important digital technology over the past 50 years has
seen an initial explosion of entrepreneurial activity, followed by a
90%-plus shakeout of the competitors (although only a small dip in
But what is generally forgotten is that after the shakeout,
the few remaining survivors enjoy exponential growth. Within a couple
of years they are joined by a new generation of savvier young
competitors. Meanwhile, over the subsequent two decades, the industry
itself typically grows 100 times bigger.
Mountains of money, an entrepreneurial resurgence, a new generation of processors, severe overcapacity of cable, broadband, viable e-commerce models, important new core technologies in hardware and software, and a breakout in IT. We’ve seen such conjunctions before–in 1958, 1970, 1976, and 1996–and each (the integrated circuit, the microprocessor, the PC, and the Web) set off an explosion that reverberated throughout the world.
Had you been looking closely at the converging curves of business, money, and semiconductor technology, you would have seen the microprocessor coming as early as 1968, even if you couldn’t have predicted the Intel 4004. We can do the same now for the convergence of 2004-2005, and give it a name – Internet II: The Great Global Grid.
Can we create products and technologies which can position Indian companies at the heart of this New Internet? This will require not just entrepreneurs to take the plunge (or re-position their existing businesses), but also Indian venture capitalists to stop shying away from early-stage investments. Many of the Indian software companies are also extremely cash-rich (the top companies have cash in excess of USD 100 million) and continually generating cash from operations. So, can the next Microsoft come from India?
Like the way the US and its allies have united, Indian companies and entrepreneurs need to come together to leverage the opportunities. If we can imagine a world beyond the next two years, there are manifold opportunities. But they cannot be captured by a single company alone. What is needed is a coalition to take advantage of the opportunities and magnify the efforts of single companies. In that context, perhaps, the right question to ask in not if the next Microsoft can come from India, but can the Indian IT companies create a pool of companies that match the likes (and clout) of their current day counterparts in the US. India has the talent and the money. What is needed is the vision to imagine a different future.