Demise of Indian I.T. Industry???

Last week a business daily (Economic Times of India) published an article proclaiming Indian IT industry (age 25 yr.) has died..

Many naysayers, doubting Thomases (of course including politicians)lapped up the news & began fear mongering. It soon began trending on social media too.

What is the reality??

Indian IT industry (rather, to be precise, we should call it ICT) a $150 Billion industry behemoth, provides 2.5 million jobs through direct employment  & services almost 90+% of Fortune-500 biggies to millions of small and medium enterprises worldwide. Call it world’s back-office or the neuro-network of world, Indian industry achieved the hallmark within a matter of two decades, which is absolutely praiseworthy!

The Big-fours of Indian IT Industry (Wipro, Infosys, TCS & HCL – I call it 'WITH') grew almost 30% YoY for so many years and thereby set the pace of the entire Indian IT industry. They perfected the art of offshore Delivery, managed the scale of operations , managed language/culture/time zone issues & went on and on globally.. In the heat of meeting market expectations of QoQ growth & profit, they put so much thrust on services part & neglected the path of product development/ innovation. Only recently, when there is no enough head-wind (due to recessionary pressures worldwide) with an ailing Europe, Brexit and a slowing dragon, they're realizing the hard way to move away from linear model (i.e. revenue should not be dependent on headcount).

They all were in cushy comfort zone.  In fact, many of the companies are sitting on a huge pile of cash (and companies like Infosys put it in fixed deposits, besides some acquisitions), but nobody is putting their money on inventing some game-changer product/ disruptive innovation.  Why India couldn’t develop a product like Windows, Linux, SAP or salesforce.com or Kindle or iPhone? Why Facebook, Twitter, WhatsApp (& almost entire social media) have to come from the US of A? And if we have the huge pile of cash, why our IT companies are not using it to gobble some of them? If Tatas could acquire Jaguar Land Rover, why can’t Indian IT biggies think of acquiring, even say, ailing giant like Yahoo? Are our ambitions audacious enough? Did we invent any new industry like what eBay did? Why didn’t we come up with the likes of Uber, Tesla or Airbnb?  When the young Bansals are making noise in mobile commerce, why aren’t the biggies interested? Everybody knows SMAC (Social Media, Mobile, Analytics, Cloud) but nobody is envisioning how to leverage it or rather, how to spot the next trend.

It could be the middle-class roots / risk-averse nature or too much structured thinking of engineers (how many of the IT employees are with Humanities or literature or economics background?) or a combination, but if Indian IT Industry has to put a stop to the slow-dying  and leap to the next orbit, it MUST think beyond the services and the linear model.

So while I may not be very gung-ho on the future of Indian IT Industry, it is too early to write its obituary note. In my humble opinion, it will not die for sure for at least next 10 years. The ICT services piece is a too big pie to be over (or to be serviced entirely by some other country/countries). But yes, the era of explosive growth (with handsome margins and huge hikes in salary packages) is over. Get used to single digit growth rate unless some of them traverse the path less-traveled and invent revolutionary products, bring in paradigm-shifting innovations, invent new industries & thereby a new future..!  

Are the super-Gods of Indian IT Industry listening??





*Note - The views expressed are solely of your truly & they don't represent views of any organization/institute/NGO.