How new IT rules will change the internet in India

Source:, Mar 01, 2021

The Indian government has taken its first big step towards regulating big tech platforms. The government’s new Intermediary Guidelines for the Information Technology Act (IT Act) place certain restrictions on platforms and how they function in India. Mint explains.

What are these new intermediary rules?

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, are formed to regulate tech platforms operating in India. These will supersede the policies of platforms, which will have to comply with the new rules. These rules, along with the upcoming Personal Data Protection (PDP) Bill and an expected law on cybersecurity, will determine how the internet and internet-based companies function in the country in future.

They also indirectly regulate what you can or cannot do, see or access through internet. In essence, they will determine the future of the internet in India.

How do they affect users and platforms?

Platforms will have to review their own policies and ensure they comply with these rules, and more that may follow with the PDP Bill. In some cases, they will have to review their algorithms to ensure compliance, which could lead to higher research and development (R&D) costs. Platforms that don’t draw significant revenue from India could also choose to leave the country, instead of complying. For users, it would mean regulations over what they say or do on the internet. Their activities will be under greater surveillance, and there have been concerns about misuse by both platforms and the government.

Social media platforms continue to face criticism for invading users’ privacy

What are the rules written under these guidelines?

Social media platforms must put grievance redressal officers and trace content to first originator within India. A Code of Ethics and Procedure and Safeguards in Relation To Digital/Online Media has been put in place. Digital media will have to follow the Journalistic Conduct of the Press Council of India and the Programme Code under Cable TV Networks Regulation Act.

What specific rules are being criticized?

One of the primary concerns is that encrypted messaging apps will need to collect more user data to trace messages back to the first originator. This also conflicts with extraterritorial jurisdiction norms made in the IT Act. The new rules could get people into trouble even if they share a tweet/message that originated outside India, thereby shooting the messenger instead of the actual creator. Experts have said the IT Act should not apply to news media and putting them under the same norms could lead to unfair censorship of news.

Will messaging apps get access to chats? Not necessarily. While it does mean apps will have to collect more data, experts said there are ways to ‘fingerprint’ each text, by which you can reach the first originator of a text without reading its content. Think of it this way, the police lawfully confiscates a phone, reads a text and then asks an app to find the first originator of the text. The app uses the fingerprint of that message to see where it started. This is technically possible and apps can do so without needing to read the text.

IT sector to grow by 2% to $194 bn, add 138,000 employees in FY21: Nasscom

Source: Business Standard, Feb 16, 2021

Mumbai: The National Association of Software & Services Companies (Nasscom) has projected a 2.3 per cent revenue growth in FY21 for the country’s information technology industry despite the pandemic. Nasscom has pegged the Indian IT industry’s revenue during the current financial year at $194 billion, up from $190 billion in FY20.

Compared to previous years when the industry registered a growth of 6 to 7 per cent, the current numbers are subdued.

Although several players faced pricing pressure as the global economy contracted, the Indian IT services segment is set to grow 2.7 per cent to $99 billion, according to the latest numbers. Growth was driven by the e-commerce sector that grew 4.8 per cent to $57 billion, followed by a 4.1 per cent growth in the hardware segment that touched a revenue of $16 billion on a year-on-year basis. Exports are expected to touch $150 billion for FY21.

In terms of outlook, though Nasscom has stopped giving any revenue guidance, its CEO Survey for 2020-21 has indicated a better economic growth and increased tech spends.

About 97 per cent of the CEOs polled expect global economic growth to be better than 2020 and 71 per cent CEOs expect global technology spend to be significantly higher.

The IT industry accounts for 8 per cent of the country’s GDP, contributes to more than half of services exports and 50 per cent of the foreign direct investment.

“The year 2020 turned out to be stress test of our resilience. Many analysts were sure that the Indian IT industry will not be able to come out of this, but we have not only recovered but have also managed to stay relevant to our clients and have emerged as bellwether in an economy hit by Covid,” said Nasscom president Debjani Ghosh.

On the back of a strong recovery in the second half of FY21, increased digital focus and tech spending, the overall deal pipeline is at a robust $15 billion, according to the industry lobby group.

Despite the downturn, Indian tech industry continues to be a net hirer with significant focus on digital up-skilling. The industry is expected to add over 138,000 net new hires in FY21, taking the total employee base to 4.47 million. The digital talent pool is expected to cross 1.17 million, growing at 32 per cent over the last year.

The strategic review also pointed out that there has been a 10 per cent shift to outcome-based pricing, with about 4 per cent offshore shift in 2020 against 2019.

Nasscom chairman U B Pravin Rao said the hybrid work model was here to stay. “Even today, everyone is working from home. But what we have managed to showcase to clients is that though our worforce are working from home, we have not compromised on security and rather maintained all the parameters. That has given them confidence that work from anywhere can be worked out,” added Rao. The industry body is working on a framework on hybrid workforce including on tax implications for the people working from home.

As per a Nasscom survey, while 97 per cent CEOs anticipate a significantly better global economic growth in 2021, 95 per cent expect hiring to be more than last year. Further, 67 per cent CEOs believe the Indian technology industry would grow significantly higher than 2020 and 70 per cent expect to have higher prevalence of remote work along with boost in gig workforce in 2021.

“Digital transformation is the topmost priority for global corporations and in a highly connected world that will remain largely contactless for an extended period, there are shifts in business models, customer experience, operations, and employee experience,’’ the report said. Up to 28-30 per cent of the industry revenues was recorded for digital.

The Indian domestic market, driven by hardware-led demand, continued to show resilience, growing at 3.4 per cent in the year. With an increased focus on innovation, India witnessed more than 115,000 tech patents filed by companies in India in the last five years.

The industry witnessed 146 M&A deals in 2020, 90 per cent of which were digitally focused.

Companies saw a significant rise of 80 per cent in cloud adoption during the first half of this financial year against the second half of the previous year. Continental Europe and Asia-Pacific (APAC) emerged among the strongest growth geographies in FY21. In terms of sectors, banking and financial (BFSI) and healthcare were among the key growth verticals during the year.

IT firms set sights on large deals to boost revenue

Source:, Jan 27, 2021

Software services firms in India are hoping to win more large deals as they capitalize on growing adoption of digital technologies by corporates worldwide, following the business disruptions caused by the pandemic.

Some such as Infosys Ltd and Wipro Ltd have bagged deals worth more than $1 billion each in recent months, underscoring this growing trend.

Bengaluru-based Infosys achieved a record $7.1 billion in large deal wins in the quarter ended 31 December. Cross-town rival Wipro separately signed a contract with German retailer Metro AG for an estimated value of up to $1 billion across nine years to drive Metro’s digital transformation agenda.

HCL Technologies Ltd said it signed 13 new ‘transformational’ deals in the December quarter, aided by momentum in its digital, cloud, and products and platform segments. Among prominent large deals, Noida-based HCL Technologies won a $600-million contract for five years from Swedish telecom equipment maker Ericsson in July 2020.

The recent uptick in large deal wins by Indian information technology (IT) firms reflects the growing preference for cloud and digital transformation across sectors. During the pandemic, firms began investing heavily in digital technologies to cut costs and improve operational efficiencies. “Large deals are critical to drive revenue acceleration and achieve double-digit growth. The size and complexity of large deals will only increase in the days to come,” said Nitin Bhatt, technology sector leader at consulting firm EY India. “Large deals have a different DNA. They require a different risk appetite, investment ability, commercial construct and the need to leverage an ecosystem of partners to create long-term value for customers.”

Of the 22 deals Infosys signed in the past quarter, most were from the financial services sector, followed by a few in verticals such as manufacturing, energy utilities, resources and services sector, communication and hi-tech. Region-wise, 13 were from Americas, seven from Europe and two from other regions.

In December, Infosys signed a deal estimated at $3 billion with German automotive giant Daimler AG. That followed a $1.5-billion contract from US investment management firm Vanguard in August.

“We believe it is the largest in the IT services industry in India. This will continue to expand our strong presence in the Continental European markets,” Salil Parekh, chief executive and managing director, Infosys, said in a post-earnings call with analysts earlier this month.

“Our overall deal value for the nine months of this financial year is over $12 billion and the net new large deal value for the nine months of this financial year is over $8 billion, positioning us very strongly for the quarters ahead,” he added.

Wipro chief executive Thierry Delaporte has said that he will be appointing a chief growth officer, a new role focused on driving large deal momentum that has been missing in the company until now. Key large accounts constitute about 70% of Wipro’s revenue.

“Architecting large deals requires an intimate understanding of the customer’s imperatives, excellent track record at the account, trusted relationships at the CXO level, a differentiated win-strategy, and intense involvement of delivery leaders. Given the mission-critical nature of these deals, CEOs are often actively involved in these pursuits, which can even take six months to a year to close,” Bhatt said.

According to analysts at Nomura, the trend of large deals is likely to continue over the next 4-6 quarters, with clients looking to adjust their cost structures and lower their expenses on legacy IT to fund new digital investments.

“Digital offerings can be a key differentiator. For instance, some technology services companies have mandated the inclusion of hybrid cloud as a key component of all future deals. Also, fair and transparent pricing—which includes contingencies for potential uncertainties—are critical for building trust and crafting a win-win proposition,” Bhatt added.

India’s IT, business services market to hit $13 billion by December: IDC

Source: Business Standard, Nov 25, 2020

New Delhi: India’s IT and business services market is expected to grow 5.4 per cent annually to reach $13 billion by December this year, research firm IDC said.

The segment grew 5.3 per cent year-on-year (y-o-y) in January-June (H1) 2020 period as compared to 8.9 per cent growth in H1 2019, IDC said in a report.

Of the IT and business services market, the IT services market contributed 77.4 per cent in H1 2020, growing 5.9 per cent y-o-y as compared to 9.3 per cent growth in the year-ago period.

“IT services market will begin picking up momentum gradually from 2021 onwards and is projected to grow at a CAGR of 7.2 per cent between 2019-2024, to be valued at $13.4 billion by the end of 2024,” it said.

This reduced rate of growth in the IT services market in India is due to the COVID-19 pandemic, IDC added.

“During H1 2020, application hosting services and infrastructure hosting services continued to be higher growth markets on account of increasing adoption of cloud applications (majorly collaboration applications and video-conferencing) and cloud infrastructure,” IDC said.

Owing to increased demand for VPN licenses and requirement for higher network connectivity, network services witnessed higher adoption, it added.

“In H1 2020, the role of IT services vendors gained higher prominence, as organisations increasingly approached them to help ensure business continuity by putting in place various technologies, solutions, best practices and frameworks,” IDC India Market Analyst, IT Services, Garima Goenka said.

During these difficult times, organisations were investing higher in collaboration applications, VPN licenses, endpoint devices, cybersecurity solutions, cloud, artificial intelligence, and automation.

“Apart from just ensuring business continuity, the role of IT service providers have also been towards helping organisations to achieve a higher degree of tech resilience, adaptability…,” she said.

Goenka noted that vendors have launched AI-based applications to help the government and healthcare sectors to provide citizen services and answer COVID-19 related queries, and for organisations to ensure safe and secure return of their employees to the workplace.

“IT investments across all the major sectors such as BFSI, healthcare, telecom, IT/ITeS, government and manufacturing increased considerably to improve overall experience and maintain business continuity and resiliency,” IDC India Senior Research Manager, Enterprise Software and ICT Services, Shweta Baidya said. She added that the government also relaxed some of the stringent guidelines that provided increased flexibility with respect to work from home/anywhere policies.

Indian IT firms strengthen Cloud practice as digital adoption picks up

Source: Business Standard, Jun 17, 2020

Bengaluru: Indian IT services companies are gearing up to cash in on opportunities in the Cloud services space as the Covid-19 pandemic pushes organisations to increase the pace of digitisation across the board.

Large Indian IT firms such as Infosys, Wipro and TCS are seen strengthening their Cloud offerings by forming joint ventures with global platform providers like Amazon Web Services (AWS), Google Cloud, Microsoft Azure and IBM Cloud, and growing their team of specialists in specific cloud platforms organically. Wipro, for example, has tied up with IBM to be able to provide hybrid cloud offerings to clients.

In March, Infosys had also announced a similar partnership with IBM.

Noida-headquartered HCL Technologies has set up a dedicated business unit for Google Cloud with over 1,300 professionals. The company has plans to expand the team count to around 5,000 professionals. Companies such as TCS and Infosys are also learnt to have set up specialised cloud teams for various platforms.

“Cloud related service offerings contribute around 10-15 per cent of the revenues at tier-I IT services firms. The current pandemic is accelerating cloud migration among enterprises, opening up fresh opportunities for IT services firms,” said Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting. In its latest estimate, global research firm Gartner has said that even though global IT spending in 2020 is expected to decline 8 per cent, “sub segments such as public cloud services will be a bright spot in the forecast, growing 19 per cent in 2020.” It also said that cloud-based telephony, messaging and conferencing will also see high levels of spending growing around 9 and 24 per cent respectively.

H-1B move to hit Indian IT firms

Source:, Jun 14, 2020

Bengaluru/New Delhi: Companies such as Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd will have to hire more American citizens if the US proceeds to suspend new job visas, a move that would substantially erode their margins.

According to a Wall Street Journal report, the Donald Trump administration is planning to bar new H-1B visa holders from coming into the country until the ban is lifted. Visa holders already in the US are unlikely to be affected.

Indian IT firms widely use H-1B visas to transfer highly skilled workers to the US, and the country accounts for 70% of the 85,000 annual H-1B visa cap, as per immigration data. The news about the planned visa suspension comes even as H-1B visa rejection rates for Indian IT firms have risen to 24% in 2019 from just 6% in 2015.

Industry body Nasscom said on Friday, “We seek exemption for technology workers as essential workers, from any restrictions that may be imposed in a second White House Proclamation. Priorities established by Department of Homeland Security’s CISA (Cybersecurity and Infrastructure Security Agency) that designates key categories of ICT workers as essential service, should help define the types of essential workers.”

For TCS, which operates in more than 50 countries, the US is the largest market in terms of revenues. “Visa regulations will continue to change and evolve. TCS focuses on adapting and complying with those regulations,” Tata Sons chairman N. Chandrasekaran said at the company’s annual shareholders’ meeting on Thursday.

Staff costs form 60-65% of total operating costs for large IT services firms.

“Operating margin may decline 30-80 basis points for the sector in FY20 as local hires, who cost 25-30% more than H-1B counterparts, increase for onsite jobs,” rating agency Crisil said in a 2019 report.

As part of its localization efforts, Bengaluru-based Infosys hired 78% of its US senior management locally in FY20. “We are committed to strengthening local hiring practices and continuously increasing the proportion of senior management hires from the local regions,” Infosys said in its Annual Sustainability Report 2020.

Analysts said greater local hiring is the way to fill up roles if job visas are suspended.

“However, I believe this is just an election rhetoric. The US will continue to have programmes to bring in skilled workers,” said Siddharth Pai, an analyst and venture capitalist.

Prasanto K. Roy, a consultant on technology policy, said US trade bodies will strongly object to the proposal. “Shutting off H-1Bs would bring a lot of services to a halt. Projects that are affected because of lack of talent will cause a bigger local pushback in the US,” Roy said.

Software startups stare at mixed fortunes

Source:, Apr 08, 2020

BENGALURU: India’s software startups are seeing rising demand for collaboration and employee productivity tracking tools, as well as data protection services, as most corporate employees work from home amid the covid-19 pandemic.

However, Indian software-as-a-service (SaaS) startups are expecting a decline in revenues as companies reduce their overall spending even as some services, such as video conferencing provider Zoom and collaboration software Slack, witness a surge in users over the past few weeks.

Vertical SaaS companies that sell to speciality sectors such as hospitality, food and travel have been hit the most, said Girish Mathrubootham, founder and chief executive of India’s most valuable SaaS firm Freshworks. Horizontal startups, which cater to companies in diversified sectors, have seen a relatively lower drop in growth so far, he said.

Mathrubootham warned that this quarter will be worse for SaaS companies.

“While SaaS businesses enjoy some advantages over other industries—they are delivered over the internet and maintained in the cloud, they are easier to deploy, manage and support—they are not immune from impact. SaaS businesses should expect to see both new and existing revenue affected in (the current quarter). As such, all companies should look to conserve cash and reassess their hiring needs and growth plans given the current uncertainty,” he added in an email.

While Saas startups face tough times ahead, there are newer channels of demand opening up.

Freshworks, for instance, is seeing increased demand for products that enable companies to serve their customers remotely like a chat and call routing services. Another SaaS firm Zoho Corp has seen an increase in usage of products that boost productivity and facilitate collaboration.

“During the current virus outbreak, we have seen a spike in those products that specifically boost employee productivity and facilitate collaboration across remote locations,” said Rajendran Dandapani, director of technology at Zoho. “We even packaged them together into an easy to use suite (Zoho Remotely) that we are offering for free until this virus threat passes away.”

In the current situation, critical business data is at risk to potential security threats, according to Milind Borate, co-founder and chief technology officer of SaaS unicorn Druva.

Druva is now offering Microsoft Office 365 and endpoint data protection services free for six months to new customers.

“It is clear that malicious actors are trying to leverage this situation for their own gains…Teams need to ensure data remains protected from malicious actors, and we are working to support businesses of all sizes, including non-customers, to minimize exposure of business-critical data. This has resulted in a wide range of discussions with customers and prospects about how to combat this new business environment. We’re seeing a large number of them seeking additional support to protect their now largely mobile workforce and expedite cloud migrations,” he added.

Neeraj Sharma, vice president – human resources of FourKites, a SaaS-based supply chain visibility solutions startup, said collaboration tools have reached “a new high in utilization worldwide.” “SaaS products have the inherent advantage of ease of adoption by being successfully deployable – training and getting the products to production mode can be done remotely and in a very short period of time,” Sharma said. He added that a recent virtual summit the company hosted had 1,039 participants from across geographies and verticals.

Flat or negative growth for IT sector in 2020 due to Covid-19: Infosys CFO

Source: Business Standard, Apr 04, 2020

Bengaluru: India’s information technology sector is expected to post either flat or negative growth in 2020 due to the impact of the Coronavirus pandemic globally, an IT industry veteran said onSaturday.

“Look at the economic activity (globally). Worse than what you have seen in 2008 (global financial crisis).

So, clients (of Indian IT companies) are not going to increase spending (on IT) or even maintain the current spending,” the former Chief Financial Officer of IT major, Infosys Ltd, V Balakrishnan told PTI.

There will be cut in spending, and could be pressure on pricing because all the major industries including retail and financial services have been adversely impacted, he said, also noting surging unemployment rate in the US.

“Economies are doing badly. Spending is not going to happen. I think this year is going to be tough for the IT industry,” Balakrishnan said.

The Coronavirus pandemic is like a force majeure, and no amount of business continuity planning will help in this situation, he claimed.

“They (Indian ITcompanies) have to work closely with their clients, figure out how much they can extract; at the same time, they have to keep the cost under control, and manage the current year because in current year if they have a positive growth, that will be a surprise.” “It will be either flat or negative growth this year because everything is happening in the first two quarters, when growth is always good. This year is going to be very tough.

They have to plan their costs in such a way that margins they can (hold on to) so that they can reduce the impact,” he said. Even in 2008 after the global financial crisis, Indian IT companies had some growth because at that time, recovery happened very fast. “This time nobody knows because unless you find medicine for this, this is going to keep coming back; look at Singapore, initially they managed and now they are saying full lockdown. Even US is similar; nobody knows how long this is going to prolong; economies are like titanic ship, everything is frozen now, for you to restart and start the engine kicking is going to take a long time. This year is going to be very tough for IT industry,” Balakrishnan added.

STPI looks at double-digit growth in IT exports

Source: The Hindu Business Line, Feb 17, 2020

Hyderabad: India is targeting revenues of $70-80 billion from software products by the end of 2025. The country, which has emerged as a major player in software exports, is yet to tap the $500-billion software products market.

“We are currently getting revenues of $80-90 billion from software products whereas the global opportunity stands at $500 billion. It is going to grow to $1 trillion by 2025,” said Omkar Rai, Director- General of Software Technology Parks of India (STPI).

The country has launched a policy to increase the software product segment. To make this happen, tier-II and tier-III cities too should contribute.

He said exports (from STPI registered firms) would grow by double digits in the current financial year. “We will compile the figures in September. The STPI exports for the year 2018-19 stood at ₹4,24,000 crore,” he said.

Citing the numbers released by Nasscom (National Association of Software and Services Companies) recently, he said the figures compiled by the IT association pegged IT exports at $147 billion in revenues in 2019-20, an 8.1-per-cent growth over last year’s numbers. The IT and electronics sector as a whole registered revenues of $191 billion as against $177 billion in the previous year.

India’s IT sector to grow 7.7% in FY20: Nasscom

Source: The Economic Times, Feb 13, 2019

BENGALURU: India’s information technology and back-office sector is expected to grow 7.7% in fiscal 2020 to $191 billion, with exports touching $147 billion, the National Association of Software and Services Companies said on Wednesday.

The industry body said the sector added 2,05,000 jobs in the ongoing fiscal year, up from the 1,85,000 jobs it added in FY19. The sector is still ‘cautiously optimistic’ about the next financial year starting April, officials said.

Nasscom president Debjani Ghosh said it was a “good” performance by the sector. “Any industry that delivers more than 7% growth is a strong industry. We cannot tell if this is the new normal, but when the world economy is growing at about 3%, then this is good growth,” Ghosh said.

Nasscom senior vice-president Sangeeta Gupta said the industry added $14 billion in new revenue, a significantly higher amount than in the past. “It is important to look at this as the (revenue) base increases,” Gupta said.
Since last year, Nasscom discontinued issuing annual growth forecast before the start of the year. Instead, it shares a survey of global CEOs on their confidence in spending on technology. According to the latest survey, 57% of CEOs expect FY21 growth to be similar or better than FY20.