Asian IT in 2007

IDC’s John Gantz, chief research officer and senior vice-president, in an interview in The Far Eastern Economic Review replies to a question on “What will Asian IT companies be focusing on in 2007?”:

I think they’ll be most active in the simpler things–they’ll be making servers, not just PCs, but they’ll be making low-end servers, they’ll be making appliance servers, they’ll be making all the chips . . . I think they’ll still be doing that, but at the same time building up indigenous software and services organizations along the way Israel has done. I don’t think they’ll be exporting intellectual property, exporting a lot of software packages or multinational services firms unless they acquire their way in. But every other geography is looking to Asia to grow . . . it’s like the last great frontier for IT vendors and it’s the indigenous vendors who have the best shot at taking advantage of that. So I think Asians should be looking at Asia first and Europe or the U.S. second. There’s a whole regional second tier that we think is going to build up . . . Globalization has gone pretty far. Now it’s time for regionalization to happen.

Agree with him on most points except the part about Asian cos. not exporting IP. This is in fact the real opportunity. Asia has about 70% of the world’s SMEs. Let’s start creating solutions for these companies. Its a big market, running into millions of companies. Over time, move upwards to disruptively target the bigger enterprises. Unfortunately, most Asian companies are only looking at outsourced manufacturing and services — that mentality needs to change.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.