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half a trillion dollars by 2003



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(see article below)

Is this more "hype", Dr. Roy?

Let me make sure I understand you correctly.

You want us to believe that the Indian software industry has
orchestrated
some kind of grand conspiracy involving Mckinsey, Bank of America, SG
Cowen,
Bill Gates, John Chambers, Jack Welch, Bill Clinton and numerous other
heads
of State, for the purpose of hoodwinking the Indian public into
believing
that India could become a major services exporting country?

Do you believe this analyst's claim that the global software services
industry could be half a trillion dollars by 2003?  Doesn't the $50
billion
export target for 2008 seem like peanuts in relation to the overall
market
size?

You not only do not believe the export figures put out by NASSCOM, but
you
also do not believe all the investment banks and consulting companies
the
world over,  that are projecting that the global software industry will
be a
multi-trillion dollar industry in the next decade and that India should
be
able to increase its share from one percent to 5 percent, given her
strengths in this area?  .

You would have Indian policy ignore the considered opinion of all of the

above?  And that too, without any counter argument to substantiate your
point of view?

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Europe, an attractive destination for Indian IT services




Focus on Europe could offset the slowing US market for the Indian tech
sector, says SG Cowan analyst. Europe has a huge market for Internet
services waiting to be tapped, apart from wireless technology and
security
services.

Reuters


Thursday, February 08, 2001


MUMBAI: Europe presents an attractive market for India's
services-dominated
software firms as it has maintained its IT spending growth. This is in
sharp
contrast to the US which has seen a slowdown, a leading industry expert
said
on Wednesday. "European growth is looking far more robust than the
United
States," Michael Finney, head of European Technology Services Research
of S
G Cowen Securities told an IT seminar in Mumbai. "And Europe as a market
is
far more attractive," he said.

India's software sector, which has been growing at annual rates of 50-60
per
cent, derives more than 60 per cent of its revenues from exports of
services. In 1999-2000 (April-March), the United States and Canada
accounted
for 62 per cent of exports, followed by Europe at 23.5 per cent.

While the slowdown in United States' spending on IT initially raised
some
concerns about the sustainability of this growth, realization has begun
to
dawn that India's cost-competitiveness could actually help attract more
business. Indian companies, lead by Wipro, are increasingly looking
towards
Europe to spread their markets.

Europe currently accounts for 28 per cent of Wipro's revenue. Finney
said
the important markets for IT services in Europe were France, Germany and
the
United Kingdom, adding that Spain and Italy were also growing fast.
India
currently has a very small share of the global services market but its
advantage was cost and it could use this competitive advantage to
increase
market share, he said.

Finney said the global outlook for software services were strong and the

industry could be worth half a trillion dollars by 2003. Things could
start
improving by the second half of 2001 and "we will start seeing decent
projects coming back on stream," he said. "IT spending is no longer
voluntary. If you want to stay competitive, you have to spend on IT," he

said. The trend for outsourcing services from countries like India will
continue and strengthen, he said.

Emerging trends
Finney cited IT services like security services, Internet services and
wireless technology services as the emerging and profitable segments for
the
industry. "All companies with exposure to security services have
exceeded
analysts forecasts," he said, adding that he estimated a compounded
annual
growth rate of 27 per cent over the next five years.

There was a big market for Internet services in Europe where spending
would
be higher than the United States as it was playing catch-up, he said,
adding
that a growth rate of 47 per cent over the next five years was quite
feasible.

Finney said that unlike the United States where Indian companies had a
fair
idea of the end-user, the European market was quite different and it
would
be better for companies to look for partners. He however cautioned
Indian
companies from pursuing the outsourcing model too aggressively lest they

lose sight of the end-user and his needs.

(C) Reuters Limited 2001.





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