It began as the year of dreams, and ended as the year of the slowdown. But in the midst of the wreckage of some segments were highs in others, and the only cementing constant across the industry was cautious change. It was a year where the IT industry recorded its highest growth ever of over 50%, but also a year that some sectors recorded negative growth. It was a year of heady financials for the new DQ Top 20, with their combined turnover in 2000-2001 making up 94% of last year’s total industry revenues! It was also a period of huge numbers, with the total IT industry netting revenues of nearly Rs 50,000 crore… but it was also a time for despair, in the death throes of dying dot-coms and the collapsing B2C space.

As the US market battled its first-ever tech-led slowdown, most Indian companies realized the folly of having pinned all their hopes on one Big Brother. The result was a scramble to lay eggs elsewhere. Europe and the Asia-Pacific region emerged as the new darlings for software exports and services, but this did not mean an end to the affair with the US. If anything, the number of offshore outsourcing deals coming India’s way only increased. That India was a relatively cheaper market with a sound knowledge base was only ground home more vehemently. The result—IT exports jumped by a massive 64%. And while a major chunk of the exports still went to the United States, over a tenth went to other countries—another new high.

The bustle in a market flush with outsourced projects, meanwhile, led to the hustle of competition, leading to crashing prices in most segments. This was great news for the end-consumer on the lookout for cheaper buys, and the SME, SOHO and home-user segments multiplied manifold. The same price wars, though, led to a bloodbath in some segments as profits turned wafer-thin or negative. Printers, for instance, registered a negative revenue growth of nearly 9%, even though unit sales were up almost 10%.

Clearly, 2000-01 was one mixed bag.

The juggernaut rolled on

In the final analysis, much as India IT Inc groped into this bag, all that emerged was one signal—while the slowdown punch had India reeling for a bit, it had survived the rollover effect far better than any other country in the region. Also defying the slowdown were Indian enterprises, who stuck to their automation plans and implementation of e-business solutions. The government juggernaut also rolled on regardless, with the PSU computerization program dishing out massive orders along the way. Network integrators were part of the festivities, as they handled never-before orders from banks, financial institutions and corporates. Server vendors joined in too, recording an overall year-on-year growth of 76% and emerging as this year’s best performing segment.

It was also a year that ended in fear—as the US economy slowed and benchings began, as software professionals started returning home, as the impact of the slowdown started hitting Indian companies by the fourth quarter, as more dot-coms downed shutters, as Indian IT companies started sackings, as appointment letters issued to future engineering passouts weren’t honored, as salary hikes were frozen, as cost-cutting binge began… a long fear-list. Then there were companies that used the garb of the slowdown to lay off dead wood, sending out further shock waves across the industry with their get-rid-quick drives. The training sector, which was used to software hopefuls jamming up their doorways, was suddenly staring at empty chairs in classrooms… prospective students wanted job guarantees before signing up. Then these institutes started crashing, stories of students left with half-done courses, hopes belied, professionals with years of experience left with no upgrades and no jobs… a dismal picture.

The good, the bad, and the cuddly