Indias software firms, strapped for funds and infrastructure, will be wired to a sophisticated $12 million facility and get the much-needed venture capital to help them cash in on lucrative Year 2000 (Y2K) projects.
The government-backed Electronic and Software Export Promotion Council (ESC) is setting up an advanced mega mainframe centre for the execution of Y2K projects which aim to protect computer users from the so-called `Millennium Bug, ESC executive director R H Naqwi said.
This facility is specially for those companies which already have global orders but not the expensive facilities needed to execute them, he said.
To be installed by computer giant IBM and funded by the Union government and the Small Industries Development Bank of India (Sidbi), the New Delhi-based facility would be connected by high speed data links to software firms across the country, Naqwi said.
Indias computer software industry aims to capture a sizeable chunk of the multi-billion dollar market for Year 2000 projects but is crippled by the lack of sophisticated main-frame computers and a huge shortfall of qualified manpower.
Nearly 60 per cent of Indias computer software exports are estimated to be by medium and small companies.
The country has only eight main-frames, each costing nearly Rs 20 crore million ($5 million), which can be used for such projects. Only about 5,000 people are trained for the Year 2000 conversion work on main-frames, experts say.
Sidbi managing director Sailendra Narayan told a meeting of software industry captains organised by the Electronic and Software Export Promotion Council that he would place the proposal before the Sidbi board on November 3. The industries bank was planning other programmes for small and medium software companies with annual exports of up to Rs 100 crore ($28 million) which form the backbone of the countrys software industry, he said.
Sidbi is planning to set up three venture capital funds in the country to help small firms, he said. We are also discussing with the LIC (Life Insurance Corp) some sort of an insurance scheme for software manufac- turers...there is no reason these firms should not get insurance.
According to IBM India president Pawan Kumar, Indias Y2K conversion business will face a challenge from emerging computer software markets like the Philippines. There is a need to shed complacence...people think India is the obvious destination for software business, but powerful rivals are gearing up, Kumar said.
IBM and the ESC estimate that India is losing business opportunities worth Rs 500 million ($14 million) every day to global rivals for Y2K projects for these reasons.
We are in a hurry as there are only about 600 (working) days remaining for Year 2000...we will provide all possible help to software firms in setting up the centre, Brahm Dutt, a senior Industry Ministry official, said.
The firms getting connected with the Mega Mainframe Center would have to pay a one-time subscription fee of one million rupees ($28,500) to avail of its facilities, which include over 1,200 data lines. Sidbis Narayan said the bank would provide a matching loan to the firms.
Indias computer software industry, which grossed revenue worth $1.8 billion and exports worth $1.15 billion during 1996-97, hopes to ride a surge in Y2K business to become a global leader in software technology by the year 2015. According to industry estimates, India has already bagged more than $700 million worth of orders in Y2K projects.
The National Association of Software and Service Companies (Nasscom) recently estimated that Indian firms would tap business worth over $2.5 billion from the global Y2K conversion opportunities estimated at between $60 billion and $100 billion.
