NEWSMAKER: Som Mittal

Chip off the old block

The apex body of the software industry covered quite some distance under the leadership of its outgoing president, Kiran Karnik, who was primarily responsible for making it the institution it is today.

The industry has grown at nearly 30 per cent annually to touch almost $40 billion from just under $6 billion in 2000. "But it was time someone else stepped into my shoes. Renewal, and with it a new vision, is always good for any institution," is how Karnik puts it.

This time around too, Nasscom will be in safe hands now that Som Mittal will be in the driver's seat from January 2008. Mittal is currently the head of the services business of Hewlett-Packard (HP) for the Asia-Pacific and Japan region. He will be quitting HP to work at Nasscom for a fraction of the salary.

"It demonstrates that Nasscom is not necessarily the next step in one's career. It is for people looking for a bigger canvas," says Karnik.

The industry too is elated over Mittal's appointment. It's for the first time that someone from the industry will hold the position of president at Nasscom. Generally, the post of chairman and vice-chairman is held by industry members.

Mittal has over 32 years working experience, of which the last 18 years have been in the IT industry. He has been managing director of Digital/Compaq and chief executive with Wipro.

Besides being actively associated with Nasscom (he was even its chairman in 2003-04), he has been closely associated with other industry bodies like MAIT and CII. He was directly involved with the formulation and implementation of Karnataka's IT policy.

He has been on the CII National Council for several years and on the chief ministers' IT Task Force.

He is also the founding member of the IIIT, Bangalore and the Board of IT Education Standards. These credentials should help him lead Nasscom in driving and collaborating with the industry efforts to make graduates "employable".

Mittal, however, has many hurdles to overcome. IT companies made hay while the stock markets favoured them. Today, they are being treated as outcasts, primarily due to the rupee appreciation (almost 12.5 per cent annually) that has eaten into their rupee-term profits.

Then there is the Software Technology Parks of India (STPI) extension issue which remains a sore point, not to mention the fringe benefit tax (FBT) on ESOPs and minimum alternate tax (MAT) to be levied on IT firms.

Mittal, though, is undeterred. He says the rupee appreciation "has prepared the industry to be more efficient, and with companies paying more attention to cost-saving measures, it is pushing them to increase their productivity".

He explains: "The industry is mature enough to address such issues, however with greater cost pressure, it's the small and medium enterprises that will suffer. The business process outsourcing (BPO) industry is also prone to a greater impact as most of their costs are in rupees while earnings are in dollars. We have to extend the STPI scheme if the industry has to overcome such problems and grow," he adds (Karnik has often reiterated this line of thinking), concluding: "In the long-term, the industry will have to operate in the global world. But we need some time to adjust."