Given the negative impact that the slowdown has had on the training business, training companies, across the spectrum, tried in their own ways to spur growth. For instance, the big players tried to find new markets, mainly outside India. Companies such as NIIT and Aptech, were getting more revenues from the global markets. NIIT in line with this strategy made inroads into newer markets like Russia, Cambodia and Mexico, while Aptech was setting up shop in Russia, Columbia, Mexico and other countries. Both the training majors already have been success-full on this front and made revenues from already-established bases like in China. Incidentally, at least 20%-25% of the training revenues of major companies came from international sources and China contributed the major chunk. So much so that Indian training companies are either at the number one or the number two position in many countries. According to IL&FS, Aptech and NIIT were leading companies in the Chinese market.

Most of the smaller ones started looking at corporate training, given the continuing slump in the admission rate for the run of the mill long-terms courses. It was a tough time for relatively smaller companies, and many had to bite the dust.

In spite of uncertainties in software training, strong brand identity helped the big companies to ride past the downturn better than the smaller companies. There was some growth for the bigger companies despite the downturn. While training giant NIIT managed to grow by 1%, some other big players like Tata Infotech and CMC showed negative growth. Moving quickly into emerging options was another strategy. Given the burgeoning BPO training market, NIIT stepped up its offerings for the BPO industry with new products for individuals, as well as in the delivery of customized training programs for employees of ITeS players. In fact, a lot of small and mid –sized players have emerged in this area.

On the domestic front, the demand for training has continued to grow in the areas of BPO, hardware, networking and third-party global certifications for technology vendors such as Sun, Cisco, Microsoft, and Oracle. The big players as well as the smaller one's, are getting into this business.

Catch 'em Young
Unlike the previous few years, the last year saw a new strategy being adopted by training companies. Going back directly to where the students were–colleges and universities across the country. What has also helped the training companies in getting into these state level markets are the initiatives by various state governments to attract IT and BPO players to their respective states.

With the trend continuing, more students are expected to opt for degree courses in IT, coupled with courses by CDAC and DOEACC that are recognized by the government. Even for smaller study centers like Priyadarshini and Uptron, government- and university-led courses (from Panjab University, Maharishi Dayanand University) provided some relief to an otherwise dull market market. Aptech, for instance, is bullish about its B.Sc. programs that it offers in association with Sikkim Manipal.

This has turned out to be a winner for both private and distance learning educational institutes. Apart from such tie-ups, Aptech also ventured into setting up a full-fledged University in Raipur, Chhattisgarh, making it the first private training player to get the status of a full-fledged university.

With people increasingly realizing that global exposure is vital for a successful career, the last financial year also witnessed more and more students opting for globally-recognized certifications from Oracle, Sun, Microsoft, Cisco, among others. Other than these certifications, the software skills in vogue were Microsoft .NET, Oracle 9i, SQL Server2000 and web-based applications. Animation, multimedia and special effects were the other areas that showed immense potential, what with the entertainment and media industry always willing to absorb more creative professionals. In training, e-learning showed promising signs of becoming an essential tool for imparting education. One of the reasons for this was the reduced time and money spent on university campus learning.

Hardware Moguls
Hardware education companies had a party, while the software players continued to fight for the numbers. Companies like IIHT, CMS and Jetking recorded good growth, which can be attributed to the growing desktop and other hardware sales in the country, which leads to need for higher support and maintenance services. Plus, massive requirement of hardware specialists in BPO sector (tech support and IT helpdesk processes) helped. Hardware training institutes were actually offering 100% employment guarantees and placements in large enterprises. Here too, the international certification market was red hot, with Microsoft, Red Hat, Novell, CompTIA and Cisco holding sway.

According to a survey by Ernst&Young, there were 2.4 lakh hardware and networking professionals at the moment and the requirement was likely to grow tenfold in the years to come. Network security, WAN, and wireless network administration were popular courses in 2003-2004 and indicated potential for further growth too.

BPO Holds Strong
Revenues of BPO and call center companies grew 46% to $3.6bn in 2003-04, according to Nasscom. The demand for BPO professionals spawned a host of training companies. Unknown names in BPO training companies like Akiko, Megamind, and Candor came up like bolts from the blue. Most of these companies started smalltime and then gradually began splashing half-page advertisements in newspapers. While Nasscom maintained that BPO sector would grow to be a Rs 81,000-crore industry in India and generate 1.1 million jobs by 2008, the confidence and growth of BPO companies also saw increased demand by these companies. Middlemen recruiters have been advertising for training and placements in the BPO companies. The major focus is on enhancing soft skills-communication, language, and domain-specific skills.

Biotech, the New Star
Biotechnology is gradually emerging as the next best expanding opportunity for IT education players. Another Ernst&Young report indicates that India is expected to generate $5 bn in revenues besides creating 1 million biotech jobs in 5 years. With biotech industry growing in leaps and bounds, and the major players investing heavily in IT, Amity School of Biotechnology, STG, Bioinformatic Institute of India along with big boys Aptech and NIIT have also jumped into the field of biotech education. Another hot area was content development, which is poised to grow as more and more telecom players are looking for content to add value to their Broadband services.

Lessons Learnt
Training companies were still unenthusiastic about setting up more institutes in rural markets, especially because of reduced demand, lack of trained faculties, and uncertain employment opportunities. However, the usual migration of students towards A- and B-class cities for IT education has seen a rise. Students believed that acquiring domain-specific skills was the way to go. Certifications like CCNA, MCSE, Red Hat Linux, Oracle 8I and 10g were the major crowd pullers. These third-party certifiers made more new partnerships and connections with other institutes, while opening very few institutes of their own. By the last financial year, Oracle had already networked to aound 600 institutes in 37 cities. IT trainers started aiming at schools and colleges other than expanding further into corporate training.

Corporate training also saw a steady shift from the third party training software vendor provided training. Here the cost of training was clubbed with the cost of the product, leading to savings for corporates and also an assurance for the training being provided by certified specialists.

Technology courses were popular, but enterprises hit air pockets on the applications side, where 80% domain-specific knowledge has to be clubbed with 20% technology. For example, a financial institution, where the core domain of work is financial, the technology acquired for working on it would require a major understanding of the domain and less of technology per se, unlike in the case of a software development professional in a software development firm.

Positive Outlook
Even though the last financial year did not see the market getting bigger, it is poised for a growth in 2004-2005. Training companies will continue to look for a bigger percentage of profits from institutional and international avenues. The new initiatives sector, which sees a deviation from the traditional software training and is more domain-specific, is another hot property. With manpower issues remaining in the focus, as in 2003-04, BPO training will continue to make hay in the current fiscal. Hardware companies are also upbeat and there's been a positive swing in the industry towards networking in all scales of operation.

Hopefully, the optimism that has been built around the Indian education industry will see the pie growing bigger.

TEAM DQ