March 9th, 2009 - Where is the money?
The whole IT and the ITES industry is facing a tough time currently.
Few days back Ramadorai (CEO of TCS) mentioned that TCS is going to cut the incentives, salary and ofcourse the workforce. Today I saw the official news that TCS is reducing it’s workforce. Every company is trying to curtail cost with the same or reduced revenue so that they can tide over this crisis.
Is this the first downturn for the IT industry? Nope, It is not. We have seen the Dot.com burst followed by the September 11 attacks which brought the industry to a grinding halt. What did we do then that we could not replicate now?
To recollect our knowledge, dot.com crash brought all newly created startups that setup shop for doing two things 1) Y2K solution or 2) Creating flashy Websites. With the dot.com burst and Y2K problem, the industry prepared for the next set of options. Everybody were talking about products instead of doing consulting service. So, how much product companies did we had? We had quiet a few which were great in their market. For example, we had iFlex (now Oracle Financial Services) which had the birst in class Core Banking solutions. Next we had Finacle from Infosys. There were other great products from AdventNet (also Zoho from the same company).
So did we had all companies as Product companies? No. Had all the product companies have become BIG.. No again except for iFlex and Infosys. Ofcourse Infosys became the second largest IT company in India not because of Finacle but with majority of consulting.
So for this downturn where will be the money come from??