Indian software firms made millions from fixing millennium bug problems. Now, as the millennium approaches, they say the death of the bug could bring down their profits. Over the last three years, Indian software firms have more than doubled their revenues by fixing problems relating to the millennium bug. But as the end of the millennium approaches, and the bug’s life nears its end, things are really slowing down. Large corporations all over the world are not spending on new computer systems due to a fear of problems from the millennium bug. And they are not spending much on solving millennium bug problems either, as that has been dealt with.
This spells trouble for many Indian software firms, which have been earning as much as of their revenue from Y2K business. India’s main software industry body, the National Association of Software and Service Companies (Nasscom) estimates that Indian firms have earned $2.3bn from the millennium bug. It says the figure could rise to $3bn by the end of 1999, but would fall to a few hundred million dollars next year. This will largely come from corporate spending on independent valuation and verification of their systems for millennium bug problems.
But this is not expected to slow down the growth of India’s software exports. Nasscom predicts that India’s software exports in 1999/2000 (April-March) will be a shade under $4bn, up from $2.6bn in 1998/99, based largely on the strategy of the three Es – electronic commerce, enterprise resource planning and euro conversion.
ERP allows managers to track all aspects of running a business on an integrated system. Euro-conversion refers to software that can help firms deal with the euro, which came into force on January 1 in 11 European countries.
Nasscom President Dewang Mehta says that after Y2K is dead and gone, products and services built around the three Es will move Indian software up the value chain and enhance its brand equity. He says it will also increase R&D and boost consulting expertise in India. Our target is to touch $6bn in exports by 2000/01 and $50bn by 2007/08. We could grow faster by stressing on the three Es.
He estimates that Indian software firms can corner a significant part of the global ERP software and services market, which is pegged at $15bn. E-commerce is booming and could potentially be the highest revenue generator, while Indian firms could earn $3.0bn from euro-conversion software. E-commerce is just making its beginnings in India, but Nasscom sees Indian firms playing a vital role in enabling businesses to get and sell their products and services on the web.
