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The king is dead-Long live the King! - Seems a bit odd - but that is what is happening to the tech industry these days. But instead of the old paving the way for the new, it is the other way around - the new giving way to the old.

There is a crazy story as to how this tech mania started. The Net stock boom really exploded after Netscape went public in 1995, before it had earned a dime or had any idea when it ever would. Yet the offering was spectacularly successful, clearing the way for hundreds more Net companies to do IPOs far earlier than companies ever had done them before--with disastrous results for many investors. When Jim Clark, Netscape's co-founder, who had been advised strongly against taking the company public that early was asked why did he do it? The answer, as cheerfully admitted by him was that, he had to make a payment on Hyperion, the megayacht he was having built. If he missed the payment, the Dutch shipyard that was building the boat would give his slot to someone else, and he wouldn't get his yacht for years.

So from such motives, among others, grew one of history's great stock manias and a new model for venture funding. No wonder that then it all came crashing down!. However all is not over - The Internet boom is going through a painful period of transition. Gone are the days when an investor bought a tech stock, kicked back, watched its value double.Today the scenario is completely different : Buy a tech stock, fret, and watch its value fall by half - if you're lucky. But here's the news : Tech lives. The long boom of the Internet is just going though a period of transition. Last year P2P and B2B stood for peer to peer and business to business, two hot trends that haven't delivered all that much; this year they stand for path to profitability and back to basics. Back to basics--that's the prevailing theme of our Tech Trends this time around. Pundits always underestimate the amount of time it takes for a new technology to become widely used.

In an era of rapid quantum changes, globalisation (access to global resources & markets and increased competition), deregulation (mainly in telecommunication and financial sector) and consolidation (biggest mergers and acquisitions taking place) are changing the fundamental chemistry of the way businesses will henceforth be run and managed. Internet technologies and resultant e-commerce opportunities are likely to exceed US $7.3 trillion in B2B and US $184.5 billion in B2C in year 2004 (according to studies made by Gartner group and Forrester group). High-speed ADSL and optical fibre are providing higher bandwidth and WAP technologies will only go to further facilitate mobile business. As a result of convergence of technologies, web appliances are expected to proliferate and non-PC devices will outnumber connected PCs in the near future. Under these circumstances, IT is increasingly becoming the central nervous system of businesses. Software companies are now required to deal with a quantum change and new business models with high degree of creativity & innovation and be able to provide the quickest response to extremely complex requirements of customers.

But as of now the news from NASDAQ is that Tech today is all about, back to the basics-instead of looking far out into the future, focus on the here and now. What's hot in wireless data? Plain-vanilla e-mail, not WAP, 3G, or Bluetooth etc.location- based applications. Back to basics also applies to the so-called business models of technology. Web portals, for instance. They helped launch this strange new medium, but the winners—rediff.com, Satyam, Yahoo, etc--look a lot like an industry we're very familiar with, broadcast television: big networks with mass audiences, mass content, and tons of services. Companies having traditional business models which are less e com exposed like Infosys, Satyam etc. will continue to grow in the new era of the net.

India already enjoys significant competitive advantage (but other countries like the Philippines, China, Mexico and some CIS countries are also increasingly gaining ground) for software outsourcing (at US $5-6 billion, accounts for roughly 1% of global outsourcing market), a phenomenon that is set to grow rapidly, as it is an effective tool for corporates to cut down costs to remain competitive.

Infosys for instance, which has emerged as a world leader in providing IT consulting and software services to the finest global organisations, mainly in USA (77%) and Europe (14%)has a fairly traditional model of growth. Software development accounts for 44%, followed by re-engineering 29%, maintenance 10% and 15% from other segments. Software products accounted for only 2% of revenues. The company’s clients too are varied -major clientele are from manufacturing (23%), insurance, banking & financial services (30%), telecom (15%), retail (11%) and other industries (21%). The company is expected to record more than 85% growth for FY 2001. The current market price is discounting FY 2001 Earnings at abysmally low levels. The below mentioned table reveals how this company is planning to face up to the challenges of the changing environment.

Aru Srivastava

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