NIIT to offer courses through cloud campus

In one of its most significant shift in business model, computer education major NIIT will offer courses directly on student's tablets and desktops, via what it calls a cloud campus. Besides, in the next three years, it sees non-IT courses like banking, design and social media marketing account for about one-third of its revenues. 

This branching out into an alternative medium, as well as diversification drive, is about both a pull and push. "We are using the slowdown opportunity to shift to cloud," says Rajendra S Pawar, chairman of NIIT. "It will redefine how education is delivered." NIIT will offer about 50 courses via the cloud. Among the new ones are social media marketing, which will train students on how to use Facebook, LinkedIn, Twitter and blogs for marketing. There's also digital media marketing, online marketing, business & financial services for commerce graduates to make them job-ready for sectors like banking and insurance. 

This shift also comes at a time when the core business of this 32-year-old company, IT training, is facing a squeeze. In an uncertain and changing environment, IT companies are hiring less and are looking to do more with fewer engineers, and there is greater resistance to outsourcing in the US. "IT sector hiring has reduced by 20% this year alone," says Pawar. "It's a volatile environment, reminiscent of the 2002 dotcom crash. IT has been a drag." 

NIIT's flagship IT course, the three-year GNIIT, which enrolled about 70,000 students a year till 2010, does 50,000 students a year now. "Some of NIIT's once popular courses like GNIIT, which was an equivalent of an engineering programme, are less attractive now," says Enayet Kabir, associate VP & head, education, Technopak Advisors, a consulting firm. Revenues from NIIT's career solutions business ( CBS), with IT training as it main component, fell to Rs 458 crore in 2012-13, against Rs 583 crore in 2011-12. At an overall company level, too, NIIT is under pressure, both on the revenue and profit front (See graphic). NIIT, which says it has trained 35 million people till date, has three other business lines: imparting computer training to employees of companies (like Wal-Mart, Philips and KFC), providing the same to school students and imparting vocational skills through 34 centres. 

The company hopes that cloud learning — with its anytime, anywhere appeal — will bring in more students and complement its 950 classrooms across the country. "It expands the market for us," says Vijay K Thadani, CEO of NIIT. 

NIIT has invested Rs 50 crore in a data centre for its cloud campus. It aims to enrol 5 lakh students at 300 centres via cloud by 2014. For content, it has pacts with institutes like the Digital Marketing International of Ireland and the Internet & Mobile Association of India for social media marketing courses. 

"The new areas that NIIT is getting into are not very scalable and won't be able to replace the loss from its IT business, as volumes are unlikely to be that high," says P Phani Sekhar, fund manager, portfolio management services, Angel Broking. "It's true that more banks are opening, but with more reliability on technology, they will need fewer people." 

Thadani doesn't think so. In banking, he says, the industry will need 500,000 professionals in the next five years. "The education system is not designed to meet that demand," he says. "We have to create a destination for students at end of school. In India, it is school to college and then a professional course for a job. A services economy needs to give options for jobs much quicker than that."