Saturday, October 20, 2007

The end is near

for Indian IT services. Why?

The Wall Street Journal wrote on July 4 that firms such as Riya of San Mateo, Kana Software of Menlo Park and Teneros of Mountain Lakes have wound up their Indian operations and are moving engineers to the US, largely because of frustration over rising wages for Indian engineers and difficulties in retaining them.

That makes it 2 companies. Meanwhile,

On October 30, Cisco chairman John Chambers will be in Bangalore to unveil the San Jose-based company's $50 million campus that sprawls across 14 acres.

The integrated high-tech facility will be the new home for 3,000 Indian workers across R&D, IT, sales and customer support teams.

That is not counting the recruitment plans of IBM and other companies.

The glass is half empty or half full depending on how you look at it, but in this case, it is more full than empty. So, to postulate and ask will jobs move back to US based on the above data, is, I would suspect, a little tricky. Between captives and offshoring partners, there is no one answer.

Look at China in manufacturing. There are outsourcers and there are company owned factories and both models have their own features and benefits. Just because Apple does not design its stuff in China or because or Mattel recalled many toys, how many questions were asked on whether the manufacturing jobs would move to the US? The answer there too is that there is always some movement in both directions.

Trees may or may amount not to forests...See this slightly dated TED video by Chris Anderson...

1 comment:

venu said...

Hi Ramesh,
The following article on the same topic sheds some more light.
http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4232

~Venu