Thursday, August 09, 2007

Party Over ?

For Indian ITES industry? That's the question Business Week is asking. It is citing issues like 1) H1B crunch, 2) need to move up the food chain 3) brand value 4) lack of innovation culture etc., as the reasons for raising this question. Interestingly, they also cite 'conceptual Brahmanism' as one of the gating factors..
But while India lacks a formal innovation culture, one would never know from the assumed superiority over foreign rivals. Indian firms are simply unable, culturally, to absorb a Western company. Industry analysts say Indian companies such as Infosys are hierarchical, and have an elitist view of their business and suffer from "conceptual Brahmanism," referring to the group at the upper echelon of the Indian caste system.
While the Indian IT companies themselves acknowledged some of these issues and are addressing them. Does it inherently mean the party is over for Indian IT companies? My answer is NO. Well, it may not be wild party like this for long.. but they will be around and transform.

From the Y2K days of software factories, Indian IT companies have come a long way in their offerings and their perception in the global stage. In the early days, Indian IT companies weren't even in the radar screen of large IT services company as a threat. Now, every IT services not only watch the Indian players very closely, they themselves have an India play.

From the Why India ? questions of 90s, every company must now have an India play and this often includes some kind of relationship with Indian IT companies.

Having said that, I also agree with several points raised in this article. Indian IT will not be able to continue grow at the same clip they have been doing for the past few years and their profit will continue to squeezed. Also, Indian companies need to reposition themselves to being trusted consultants not just going vendors.

What's your take?