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Nasscom is in the process of identifying small and medium information technology companies that it can strengthen and help grow, Ganesh Natarajan, chairman, Nasscom SME Forum (western region), said.
In the first stage, which is likely to last for a couple of years, the companies will be identified and given support and training with other bigger companies, Natarajan said while speaking at a 'Spot the Star' programme, where 12 IT-enabled services companies from Gujarat made a presentation on their spheres of activity.
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In the second, Nasscom will assist these companies in working jointly with the government and also marketing their products elsewhere, Natarajan said.
Speaking to the entrepreneurs, Natarajan said it is necessary for them to have a formal tie-up with Microsoft as this facilitates better transfer of technology.
"About 60 per cent of all ITES companies in the country are in the small and medium category with a turnover of Rs five crore to Rs 50 crore (Rs 50 million-Rs 500 million)," he said.
There are between 1,200 and 1,300 small and medium ITES companies in India and 40 per cent of them are in the western region, he said.
It makes good business sense for promoters of smaller IT companies to sell their firms to bigger players while retaining the areas that they have gained expertise in, Natarajan said.
"Promoters in India are generally reluctant to sell their company. But this concept is quite common in other countries. I have a Jewish friend in the US, who has so far set up and sold as many as 14 companies, making huge profits in the process. We need to change our mentality to a certain extent if we want to graduate into a higher league in the IT sector," Natarajan said.
He said while cost-effectiveness is the single largest criterion that clients look at while assigning tasks to IT companies, it is also essential that companies develop a core area of expertise.
"This will help the company grow and when the company is sold, other branches and products can easily be offloaded," he said.
Other experts including Madhu Mehta of Anjaleem Enterprises, B H Jaoo of IIM, Ahmedabad, and Vishnu Varshney of GVFL, said the small and medium companies need to achieve a turnover of about Rs 150 crore (Rs 1.5 billion) before selling them off to big players.
The experts said with most state governments allotting huge amounts for e-governance projects along with other IT programmes, the scope of working with the government is increasing in a big way.
Nasscom has already arranged a formal tie-up with five IT companies and the Maharashtra government and hopes to replicate the experiment in Gujarat as well.