What is the trend among the investor community in the IT segment, post rationalisation?
It's clearly B2B (back to basics) and P2P (path to profitability) that is driving the investments today. While adequate capital is available in the market, plans written on a piece of paper are no longer attractive to the investor community. So the basics and the clear path to profit are the only two things that will ensure money for a business. Clear cut business plans, focused market plans, after sales backup and the entire service structure needs to be defined by the entrepreneurs. With the initial euphoria that the market faced, people believed that the normal laws of management did not apply. That was wrong. They still work.

What do you think about the valuations the market has witnessed in the recent past?
The markets historically tend to over-react. Given this situation, the initial hype in dotcom valuations was clearly absurd. This led to the crash in the dotcom industry. But the Internet does open up new delivery channels and business avenues especially since many business models cannot sustain without it. Therefore it would not be wrong to say that dotcoms are not dead, but the days of absurd valuations certainly are.

How long can the cost advantage location business model sustain IT growth in India, especially in view of competition from China?
Today the Indian market no longer operates on the cost advantage model alone, but also on the quality of work. It is now a question of delivering value for money and not just competing with countries like China on cost.

`Dotcoms are not dead, but the days of absurd valuations certainly are'IT outsourcing is a sensitive decision for companies to make and therefore not driven only by the cost benefit. Indian companies have built a fairly good brand image in the international markets so this is certainly an advantage for the country. One can also see that there are a number of product companies positioned higher up in the so-called value chain. There is, however, an inherent risk factor associated with product companies as they have longer development and sales cycles. And with technology changing on a daily basis, today's trends cannot be considered as final in determining a product's success.

Q: How is the concept of corporate outsourcing evolving in the IT industry?A: This is one area that will get more and more sophisticated as the industry evolves. Earlier, in a diversified business, each division made its own technology decisions and had a fragmented buying pattern. Now increasingly companies are more technology savvy and the corporate strategy for outsourcing is an integral part of their overall business strategy. While the projects outsourced will get bigger, suppliers and solution providers with good resources will see good growth levels.