Consolidation in the technology sector continues: HP is making a bid to buy Compaq. Earlier in the year, IBM bought Informix (databases). In fact, this highlights the maturing of the computer industry, as Peter Martin explains (writing in the Financial Times, December 20, 2001):
Most of the industry’s sub-sectors – huge industries in their own right – are settling down in effect as duopolies, with two leading operators clearly ahead of their rivals.
In databases, the battle is between Oracle and International Business Machines. In enterprise management software, it is between SAP and Oracle. If the HP/Compaq deal goes through, the leaders in big corporate systems will be IBM and the new HP, selling technology derived in part from Compaq’s acquisitions of Tandem and DEC. For corporate sales of desktop personal computers, the rivals will be Dell and the new HP. In internet systems, they will be Sun and IBM. In PC microprocessors, they will be Intel and AMD.
There are a couple of sub-sectors where the battle is three-way: mid-sized corporate systems, where IBM competes with Sun and the new HP; and network storage devices, where the new HP will take on IBM and EMC. And there are a couple of areas – desktop operating systems and office productivity applications – where there is really only one big operator: Microsoft.
An industry once noted for its breadth of competition is settling down into a pattern familiar in other mature businesses: two or three leaders in each sector and a number of also-rans. This process is accelerating in the industry downturn as companies merge, pull out of unprofitable sectors or drop behind the pace of innovation.
For India, it has been a year where the realization has become clearer that knowledge-based industries are our future. Satyam and Wipro (software services) along with Dr Reddy’s Labs (pharmaceuticals) listed on the US exchanges, emphasising that IT and BT (infotech and biotech) are the areas where India can attain leadership in the coming years. The dream of India becoming a back-office to the world inched forward as IT-enabled services seemed to the only ones attracting any kind of investment. Telecom rates finally seemed set to drop due to competition (especially in the long distance segment) and the legalisation of Internet Telephony.
As if it were a reflection of the harsh realities, the biggest movies of the year include 2 fantasies (Harry Potter and the Sorcerer’s Stone, Lord of the Rings: Fellowship of the Rings) and 2 animated ones (Shrek and Monsters). In India, the three hits of 2001 aptly sum up the year: Gadar (a throwback to the days of the India-Pakistan partition), Lagaan (a fantasy cricket match set in the late 19th century) and the aptly titled Kabhi Khushi Kabhie Gham.
