Sunshine days return for software training industry

Just a year ago, only die-hard optimists expected the software training market will ever look up. After it shrank 35 per cent to Rs 1,600 cr...

Just a year ago, only die-hard optimists expected the software training market will ever look up. After it shrank 35 per cent to Rs 1,600 crore in 2002, a holocaust took care of the smaller fry 8212; Wintech, Zap and a brood of others vanished in no time.

But that was the past. In the carnage and reorganisation since 20008217;s dotcom bust, the mighty in IT education have more than survived. There8217;s now talk of making a killing 8212; beginning with a war over market share.

8216;8216;There8217;s no space for fly-by-night operators in the software and IT training market,8217;8217; says Pramod Khera, MD of Aptech Ltd.

8216;8216;In the last three years, the focus has been to offer unmatched value to customers.. And we have seen sentiments turn positive over last year in terms of enrollments,8217;8217; says Rajendra Pawar, CMD of NIIT Ltd.

The IT education business went through its paces since 2000, when bottomlines and toplines first plunged, but revenues hit dirt only in 2003, leaving no option but a difficult reinvention and reorganisation.

Industry associations and analysts promised growth from specialisation, formal education tie-ups, foreign ventures and entering new segments.

Nasscom said the BPO business, growing at 60-plus per cent which could employ more than a million by 2008, will have immense training needs.

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In fact, early signs of the gamble paying off for IT training majors are on the horizon. The largest IT training company, NIIT Ltd and its subsidiaries reported consolidated operating profits of Rs 14 crore in the second quarter of 2004: 233 per cent more than the Rs 4.2 crore reported in last year8217;s quarter.

Aptech Ltd also reported yearly growth of 8 per cent in net profit in Q3 2004, at Rs 4.22 crore. Total income was down 6.2 per cent to Rs 25.25 crore, but the company says it had turned its learning business Rs 6 crore revenue into a wholly-owned subsidiary, making the two years incomparable.

And neither is talking about a shrinking market size.

8216;8216;The Indian IT training industry had revenues of around Rs 1,100 crore in 2003-04, which is poised for steady growth,8217;8217; affirms an analyst.

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		nbsp;	8226; Industry bodies, analysts assure growth from formal education tie-ups, foreign ventures and new segment forays 8226; BPO business to have immense training needs, says Nasscom	nbsp;

Industry is not averse to the logic. 8216;8216;The Indian IT education market itself is not growing 8212; but we8217;re growing fast in the CIS, China and Latin America,8217;8217; says Khera, who hopes to have 20 per cent revenues from abroad next year.

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The strategy is old hat at NIIT. 8216;8216;Going abroad takes our education and training to newer countries, and helps us penetrate deeper in regions we are already strong in,8217;8217; said Pawar.

Though the rivals were forced willy-nilly into new areas like Aptech into voice and accent training, non-voice call centre training and non-IT training to broadbase revenue streams. NIIT, too, had its days of judgement with the dotcom bust, slowing US market, attrition, and loss of image.

But it banked on academic tie-ups, new products, corporate training and hived off corporate training from education and consultancy businesses. NIIT is certain the moves will pay off. 8216;8216;New product launches supported NIIT8217;s market share plans and the results are rewarding,8221; Pawar said.