The Dawn of E2K in India

Thomas L. Friedman, The Straits Times 9 Nov 07;

It's true, green is the colour of money

NEW DELHI - REMEMBER Y2K - the 'millennium bug' that threatened to melt down millions of computers when their internal clocks tried to roll over on Jan 1, 2000, because they were not designed to handle that new date?

And remember that the only country with enough software programmers to adjust all these computers so they would not go haywire, and do it at a reasonable price, was India. Also remember that it was this operation that launched the Indian outsourcing industry.

Well, remember this: There is a bigger opportunity than Y2K just round the corner. I call it 'E2K' - for all the energy programming and monitoring that thousands of global companies are going to be undertaking to either become carbon neutral or far more energy efficient than they are today. India is poised to get a lot of this work.

I first started thinking about this when I heard Mr Michael Dell declare that Dell Inc. would become 'carbon neutral' in its operations by the end of next year. He said Dell would take inventory of its total greenhouse gas outputs and then develop plans to cut, eliminate or offset those emissions.

With a carbon tax or cap-and-trade legislation looming, more and more companies will be doing the same thing. It is going to be the next big global business transformation. And it is going to require tonnes of software, programming and back-room management to measure each company's carbon footprint and then monitor the various emissions-reduction and offsetting measures on an ongoing basis. Guess who has the low-cost brainpower to do all that?

Some of the smartest Indian outsourcing companies are already positioning themselves for the E2K market. 'What did Y2K do?' asked Mr Nandan Nilekani, co-chairman of Infosys Technologies, a premier Indian outsourcing firm.

'It was a deadline imposed by the calendar and thus it had a huge ability to concentrate the mind. It became a drop-dead date for everyone. Making your company carbon neutral is not a date, but it is an inevitability,' he said.

When Y2K came along, some companies responded tactically, doing just the minimum reprogramming to keep their computers operational after Jan 1, 2000. Others took a more strategic path, saying: 'Since we're going to have to go through all our software anyway, why not just retire all the old stuff and upgrade to the newer, simpler systems that will make us more efficient.'

These companies went from seeing IT, or information technology, as a cost to looking for ways to make money from it - through data mining and using better information to cross-sell products, reduce cycle times for introducing new services and manage inventories more efficiently.

The key to winning E2K business for the Indian outsourcing firms, said Mr Nilekani, will be showing big global companies, like a Dell, how becoming more energy efficient or carbon neutral does not just have to be a new cost, but can actually be a strategic move that makes money and gives them an edge on the competition.

The strategic companies will use ET - energy technology - 'to reduce material costs, simplify logistics, drive down electricity charges and shorten supply chains'. As they start to do this, it will require a lot of data management, which companies will want to do as cheaply as possible.

'My impression is that there is certainly a significant opportunity for Indian outsourcing companies,' said Mr B. Ramalinga Raju, chairman of Satyam Computer Services, another top Indian outsourcing company, adding that the precise size of that business will depend on 'the speed and scale at which the carbon-neutral policies are adopted by the global companies'.

To better compete for such business, Mr Nilekani is installing solar systems and other efficiency technologies at Infosys' Bangalore campus. Satyam plans to do similar things at its verdant Hyderabad complex.

IBM seems to be moving into this space, too. Big Blue knows that even if Indian companies do a lot of the back-room work, there will be lots of front-end jobs nearer the customers.

So, mum, dad, tell your kids: If they are looking for a good, stable-growth career - green consultants, green designers, green builders are all going to be in huge demand. And if they can speak Hindi, all the better.

NEW YORK TIMES