Today one of my friend called me inquiring about the industry situation. He sounded worried. I asked whats the matter just to find he is worried about the lay off. Companies are in a spree of making employees redundant. But two questions Why? and Whom?.
Why?
The hyped Rupee appreciation against dollar has got the top executives off their seats leaving an weary feeling in them. Every one the industry critics, analysts and the laborers restlessly predicting the future scenario. But does it worth all? All these obsession and hype? I guess no. The rupee has been on its constant voyage of appreciation since quite a while. Most of Indian IT industry is service based. Hence the outsourced work is never as challenging. Its about the low quality software which does a lot but repeated work. India is the greatest factory for skilled labor. The 1200 technical(degree) colleges produce the mass skill to pack the supply-demand gap. This crowd is now on a rise and the industry leader have now realized that the IT infrastructure of India needs an additional blood line supply for survival.
Now with this back ground my views why I think the hype is not worth the hype:
point #1. The Indian market has got enough talent pool in its disposal. So as to leverage and normalize the demand.
Point #2. When I say demand it sounds conflicting as the demand is always regarded as the outsourced demand mostly dependent on US market. But if we see, who are the software meant for? The kind of service oriented software? These software are finally to be consumed by the non technical population of a targeted nation. The so called verticals like banking, Finance, Insurance, Aerospace, Biomedical, Telecoms, Broadcasting, Automobile etc.
Why we have been getting these jobs from outside giants? Two reasons:
a) India has the talent pool at the low labor cost and a relatively friendlier government with easy sounding foreign policies
b) Most importantly they have the consumer of the software there in those country. That is what matters; having the consumer. And it all started with the innovation in other technological areas, in the 80s and 90s. The escalation in Automobile and Aerospace demanded for new hitech softwares so the demand and the Aerospace and automobile software became overnight profit making verticals.
Same with Banking and Finance. The question is we are looking at the consuming market there in the west. But seldom we understand the fact beneath. Its not the software technology, its the appreciation of other industries that drive the service oriented Software market like India. Now if we take a peek at our own domestic market why Rupee is gaining appreciation against Dollar, we find its due to the enlarged and appreciated market in the other sectors. And that is where you get the consumer of your software. With such an growing market now the service industry should look for domestic clients and avoid the dependency on the west market. We have more than 1.2 billion consumer out of which there must be some .5 billion people who are affected by it. A consumer base of .5 billion is giant! The potential lies here.
In turn the foreign investment in India would increase resulting in more demand for quality service. This will give the Indian IT industry a giant opportunity to have a long term stabilized version.
So the depreciation of Dollar against Rupees is not something to get worried about but something to think about. Just to realize the consumer base is slowly shifting from west to the land called India. Hence resulting in an independent industry driven by own economy.
Just think.
Truly
Abinash
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