Not fully geared to match the rising demand of IT professionals in the country, the education segment recovered gradually, doing marginally better in FY 2004-05 than the previous fiscal. Market leaders NIIT and Aptech led the pack, like every year. Retail continued to grow, but the real sustainer was corporate training, led by the government's investment on this end.

SME segment training is also increasing with the IT investments made by companies, to become more competitive. Earlier a high revenue generator, short term IT awareness programs showed decline in revenues because of the availability of these basic programs in schools and colleges as part of the curriculum.

A year after the spin-off of NIIT technologies as an independent identity, NIIT Ltd continued its home run. The company also issued foreign Currency Convertible bonds of $10 mn to Intel Capital to further its growth plans. Though revenues increased, the company reduced its total number of centres from 3,500 to 3,369 citing their uneconomic status as the reason.

International business contributed majorly for both the players. NIIT's international business contributed 53% of its annual revenues-operations in China recorded a 20% growth, and in the US, 16%. NIIT also increased its focus on its Knowledge solutions business in the US and Europe and moved to countries like Turkey and Peru. Aptech continued its progress in the Chinese market, where over 52,000 students enrolled for Aptech courses in 2004. Last year, Aptech also tied up with a Seoul-based firm to offer software-training programs to engineers in South Korea. The other markets where Aptech was present were Turkey, Vietnam, Nigeria and the Middle East.

Hardware & Software Trends
Technical Certifications continued to be in high demand among aspiring professionals. The market size here increased due to new students as well as earlier certified professionals looking for further skill upgradation. While Microsoft led the market, Cisco, Oracle, Sun, IBM and Linux certifications too kept a stronghold. As a consistent trend, Microsoft has seen an 18-20% growth in the number of students every year. Though Linux has generated a lot of interest, it is Microsoft's OS and applications that rule the roost. There is still a paucity of teachers trained in Linux.

Most of the players in this section offered training through training partners, while the certification tests were conducted through third party players like Pearson and Prometric. About 82% of SQL Star's billing was from Oracle training.

Hardware continued to hold strong and grew at a faster rate than software. Part of the reason was that computer hardware and networking were exempt from service tax because of being tagged as vocational courses. However, they would have to incur a 10% tax for 2005-06. Jetking, which leads in hardware and networking courses, grew by 38% and added 10 new centers. IIHT and CMS were the other players who continued to do well in the market.

.NET and J2E (A Java technology) used for web based applications, and web services drove the demand in the market. ICT and tech enthusiasts also opted for new and specialist technologies like Perl and Php. Certifications like MCSE, MCDST, Oracle, Java, A+, Red Hat Linux, Cisco networking and firewalls saw rising demand. Demand for security, hardware administration and project implementation skills also rose.

The BPO Momentum
According to estimates, approximately 100,000 people joined the BPO industry last year. The burgeoning BPO market has led many players to venture into the BPO training market providing services like training delivery, consulting, assessment and placement. The trainers in this segment impart skills in communication, sales, customer service, accent neutralization, computer operations and cultural sensitization.

Though there are more than a hundred small and big BPO training players, the market is still very fragmented. The big ones are concentrating more on association with corporates rather than retail training. NIIT, Aptech and Tata Infotech also attempted to carve their niche in this space. Jetking, a hardware course leader, realized that it sends 20% of the students to BPO companies. This prompted the company to introduce a 45-day course with special training for BPOs. Microsoft's free online course for the ITeS industry, Microsoft Desktop Support Technician, was launched three months back and saw was very well received.

Hero Mindmine was one of the leading organized players in this segment, providing corporate training as well as education and services through retail centres. Like most other software and hardware education centers, Hero Mindmine got affiliated with Madhya Pradesh University to offer students a diploma in BPO, along with a BBA degree. It opened six new centers in the last financial year.

Corporate Training
The traditional Individual vs Corporate ratio is seeing a shift. Though both sides continue to display growth, revenues from corporate training are increasing at a faster rate. Also, the corporate training market is not as fickle as the commodity market. Investment in training by corporates continued growth with a view to leverage their IT investments better. This is a rising trend both in big enterprises as well as SMBs.

In the corporate sector, the government emerged as a major spender on training. Other than CDAC and DOEACC, players like Oracle and Microsoft have been party to many PSU and State training contracts. There was high stress on certifications, not just training. While applications training continued to grow in corporates, database training grew substantially in the government vertical. The hot areas in corporate training were database administration, business intelligence, data warehousing and application server.

Even for Oracle, while all areas registered healthy growth, Enterprise training in Oracle applications grew relatively much faster. SQL Star earned 24% of and NIIT 46% from corporate training.

NIIT took institutional orders from Meghalaya and Assam, while Aptech won orders from Orissa and the Directorate of Delhi schools. Both Aptech and NIIT approximated a 15% to 20% growth in institutional business last year.

On the E-Learning Wave
The growth of e-learning, which heavily depends on PC penetration, is now picking up momentum in the country. While the pace of e-learning software development is increasing fervently, the adoption has been relatively slower, especially in the K-12 segment, a popular jargon for schools. Corporates in India are driving the usage of e-learning software, and in the long run, e-learning is poised to become a de facto standard in the industry, thereby becoming a major revenue generator for training companies.

The hybrid model (which combines regular classroom sessions and internet sessions in an approximately 70:30 ratio) has been adopted in schools and colleges, which have embraced e-learning. Some companies and institutes that have adopted this are Cisco, Wipro, TCS, ICAI, ICWAI, Mahindra BT, LG Electronics, the ICICI group and Dr Reddy's Labs.

Universities Galore
Seeing students' preference for university degrees, most private players have forged tie-ups with universities, big and small. The big boys, NIIT and Aptech, believe in having their own, on the lines of Aptech, which has launched its own university. NIIT Ltd is also in the process of opening a private university. It would invest Rs 25 crore in setting up a central university in north India and enter the formal degree IT education segment focussing on Masters degrees and PhD programs.

In February, Aptech University, among others, ran into troubled waters when the Supreme Court delivered a judgement asking many private universities in Chattisgarh to close shop. The manner in which the private universities had been created by the State of Chattisgarh was not strictly in accordance with the technicalities of passing the law through state legislature.

Keeping in mind the huge size of the IT education market, private universities like Amity and Rai are going to continue on the growth path. The trend of technology majors tying up with the academia continued.

What's in Store
Finally, biotech is emerging as another opportunity area for training companies. The Biotech market in India, which crossed the $1 bn mark this year, is poised for a bigger thrust, and generate revenues to the tune of $5 bn and create 1 mn jobs by 2010. Though private players exist in this market, their contribution is negligible; Government universities are still catering to the high demand for this segment, with 133 AICTE approved colleges offering biotechnology as one of the courses.

With Intel recently setting up a circuit research lab along with a microprocessor technology lab, which was set up in India last year, more international companies are likely to follow suit resulting in demand for specialists in this area. Government is going to come up as a major contributor in demand for corporate training and e-learning would steadily make its presence felt in the K-12 segment.

Jasmine Kaur