The tiger has landed

Now India is looking towards South Africa and with trade between the two countries continuing to grow p from R6 billion in 2002 to over R14 billion today - and memoranda of understanding signed between the two countries in the ICT field, Indian influence in the local IT market is set to rise fast. Notable Indian investments in the local ICT market already include a 26% shareholding in the SNO by the Tata Group, one of India`s best-known global brands. "South Africa has been on Indian companies` radars for a number of years," says Harish Lala, head of the local office of Zensar Technologies, a joint venture between Fujitsu and Indian corporate group RPG. "Most companies investing here see it as an expansion of markets. The US is the predominant market for India, followed by Europe, Japan and Australia."

Lala, whose company has been in South Africa since 2001, says the country has a number of advantages.

"South Africa has both the infrastructure and the quality of education, it`s closer to European time zones, as well as being somewhat closer culturally to Europe than we are, and the government and economy are stable."

All of which adds up to opportunity for Indian companies willing to send staff to our shores. Sumit Garg, head of business development at Aptech Computer Education in Johannesburg, says although South Africa is potentially a very lucrative market, any company looking to enter needs to have a model.

"We usually look at various models and see where we can be competitive. One of the first factors is a labour factor; wherever there is some kind of shortage of expertise, then we can be competitive. The second factor is the internal demand within the country. South Africa has a huge internal demand for ICT because it is the most developed economy in Africa. The third one is: what kind of competition exists? I would say that the competition here is not yet mature. It`s still a relatively new economy and it hasn`t seen global competition yet. When it does, competition will become fierce."

Based in 52 countries and part of parent company NextGen, Aptech has trained over 3.5 million people and has consulted on some very large-scale projects. Garg says the company`s international experience stands it in good stead.

"We can bring in the capabilities at the high end and we can play in the volume market, whereas most South African companies can`t. We also have a wide range of products. While many local competitors will compete in specific technologies, we can offer training from kindergarten level, through school curricula, to high-end technology training. Many of our local competitors focus on Microsoft training only, but we offer Java, Open Source, Perl and PHP training as well. Whatever we have done in India, we will do here. South Africa is becoming a kind of second-level operational base."

Werner du Plessis agrees. As business development manager at Via for Africa and the Middle East, with a particular focus on emerging markets and currently based in Bangalore, he has a unique insight into both the Indian and South African IT industries.

"In my opinion, India is looking at the next level or market segment for their expertise," he says. "With low ICT roll-out and high IT growth figures in Africa and with South Africa`s ICT leadership position in the continent, South Africa has great potential to be used as a catalyst into the rest of the African market. I think India recognises this potential and is willing to contribute to and work with South Africa to ensure the export of their skills."

Du Plessis says there are attitudes South Africa would do well to emulate.

"India is an extremely service-orientated country and this can be seen in business dealings in anything from software customisation and integration to suit specific customer needs, to employer relations and corporate cultures. Further to that, the high importance given to education is reflected in all levels of government and private sector involvement and plays an important role in the local culture."

One major problem locally is bandwidth. According to Lala, cheap bandwidth in India has been the major factor in enabling India`s status as a global outsourcing powerhouse.

"That was one of the good things about the dotcom boom - a large number of the fibre networks were installed in India. After the dotcom crash, they were under-utilised and the outsourcing and support industries were able to use them to connect to their overseas clients. Bandwidth here is a big concern for Zensar. If I were to connect one of my global clients from South Africa it would cost $2 million per annum. The same cost in India is $400 000 - 20% of the price here."

But even on that front, co-operation between South Africa and India may make a difference. The two countries are due to discuss merging two undersea telecoms cable projects: the East African Submarine Cable System and a similar Indian project linking India and Europe. The future of EASSy looks unclear due to internal squabbling and some political hijacking, but if the two projects are completed and can be linked, both countries would benefit from the direct link, particularly in call centres.

"One of the rising markets in South Africa is the one for call centres," says Du Plessis. "This is a very good example of where South Africa could capitalise on its inherent core competencies: a skilled workforce, good language skills and the small time difference between South Africa and the major European markets."

Things that need to improve are a better focus on education and an increase in computer literacy as an integral part of this focus, not only from government, but NGOs and the corporate sector.

"Also required is a greater understanding of the global and regional requirements and how South Africa can expand on its potential (or develop new potentials) in order to capitalise on these needs. A more strategic outlook, determined roadmap and long-term planning are essential to develop the human capital alongside the fiscal investments," concludes Du Plessis.