The Rise and fall of IT Services Companies
“Unto dust we shall return” … We begin from dust and to dust we return.
It started off well in early 2000s when I was in my undergrad when a company announced 1000 stock options worth 8 lakhs that time for every person invited to join the company. The same company is under tremendous pressure (as quoted in certain areas) to address its attrition rates, after its controversial HR policies in the making. Known as one of the pioneers of the industry, this brings us to a question of maturity cycle of the industry: The Invisible Hand that governs the maturity of an industry by laws of nature.
The question is that after a certain limit of saturation has been reached in the utilization of the industry, it starts to decline. Is it the same for the Indian IT Industry? Meantime, the Big Blue has announced that 75% of its employees will be on contractual basis after 2017, enabling cuts in costs, and greater margins.
The geographies are limited, so are the deals across the verticals. If we create a 2-2 matrix on the deals vs. geographies, we will find out that Africa is the most wanted destination of many IT Services companies to crack the new deals. What if the no more new development deals are made, but only in existing tools for maintenance? Deal Makers in the USA and UK are facing a small dilemma: how secure are our jobs now?
Consider this; BFSI vertical actually gives more revenues to any IT Industry firm than others. With Goldman executives being grilled, and UBS getting a cushion from the Swiss Government, when Lehmann already went bust, there would seem to be cut in the revenue stream for the BFSI vertical, which In turn affects the IT industries.
Concepts like EA, SOA and BPM are ruling the minds of CIOs of the West. The ASEAN countries are more introspect and speculative in their IT spending on their names. In this light, perhaps, only a new transformation in IT concepts can save the industry from a further decline. For that, these concepts need to mature and grow. One cannot change the infrastructure of the existing operations to create a new mature ROI concept, one has to reuse components for use. And that is again, the main concept of SOA.
I wonder if this is just a buzzword to retain the dying maturity curve. Only time can answer ?
In any case, there has to be a transformational approach to the concepts of IT for the new curve to grow. Or else it will decline to bits and pieces with new employee policies turning out to be in the disfavor of the insatiated employees.