New Delhi/Bangalore: Sixteen years after the SunGard group entered India to develop software for its global customers, the US firm is turning to the local higher education market.
The firm, which earns 10% of its $5.8 billion (Rs28,246 crore) revenue from the higher education sector, is set to sign a deal on Thursday with the Indian Institute of Management in Bangalore (IIM-B) to set up a data-driven learning environment in its campus using its Universal Digital Campus platform.
The timing couldn’t have been better.
Late in June, Union education minister Kapil Sibal presented the government’s 100-day agenda to revamp higher education in India. The government is contemplating a national entrance test for higher education modelled on the Graduate Management Aptitude Test (GMAT) in the US, as well as a Bill on allowing foreign universities into India.
And last week, finance minister Pranab Mukherjee increased the overall Plan budget for higher education by Rs2,000 crore to Rs9,600 crore, with an additional allocation of Rs2,113 crore for the Indian Institutes of Technology (IITs) and National Institutes of Technology and Rs827 crore for opening a Central university in “each uncovered state”.
“Our timing is fantastic,” said chief operating officer and country head, SunGard (India) Akila Krishnakumar. “We’ve done this for years (for 1,600 institutions across the world) even though the market is heterogeneous.”
Tech-savvys: A file photo of a class being conducted in IIM Bangalore. The country’s IIMs in April decided to tie up with Prometric of the US to convert their tests into a computer-based model in order to plug any Hemant Mishra / Mint
SunGard, which gets 55% of its revenue from financial system software, is also looking at primary and secondary-school level technology spending.
Analysts say education has become a larger and attractive field for technology vendors, who were earlier confined to technical institutes.
“Companies like IBM (International Business Machines Corp.), Sun (Sun Microsystems Inc.), HP (Hewlett-Packard Co.) and others have dwelt on centres of excellence from where they did not get good licensing fee but valuable feedback on their products,” said Asheesh Raina, principal research analyst at technology research firm Gartner Inc.
Now, with larger government funds and greater emphasis on transparency in governance, technology companies can be partners in this sector, Raina said.
Last week, IBM India Pvt. Ltd signed a memorandum of understanding with Indira Gandhi National Open University (Ignou), a distance-learning institute, and the Advanced Center for Informatics and Innovative Learning for certifications in open source medium, including in insurance, healthcare and retail.
More global firms are also offering testing services in India, corresponding with the rise in test paper leaks and other such malpractices.
In 2003, for example, the question paper for the Common Admission Test (CAT) to the premium Indian Institutes of Management (IIMs) was leaked, a first in the institute’s 28-year history.
IIM blamed logistical issues for the leak.
This April, the B-schools entered into a deal worth crores of rupees with US-based Prometric—which handles the graduate record examination (GRE) and the Test of English as a Foreign Language (TOEFL) for admission to universities and colleges in the US—to convert their tests into a computer-based model.
The number of test takers for CAT has jumped from 90,000 in 2003 to 250,000 in 2008.
British education and publishing firm Pearson Plc. is also investing $30 million in India to acquire stakes in two Indian education companies.
Of this, it will put in $17.5 million for a 50% interest in New Delhi-based Educomp Solutions Ltd’s vocational training business and $12.5 million for a 17.2% stake in TutorVista Global Pvt. Ltd, an online tutoring firm in Bangalore.
“It’s a huge opportunity for us in terms of scale. We will work with quite a number of individual customers, government, industry and individual employers,” John Mackinson, chairman, Pearson India, said over the phone.
The firm has pegged the talent assessment market in India at $10 million a year. Its testing arm, Pearson Virtual University Enterprises, was one of the bidders for the IIM tests.
After losing to Prometric, it launched an Indian version of the Law School Admission Test (LSAT) in May under a licensing pact with the Law School Admission Council of the US.
LSAT India will conduct tests for entry into law schools in India.