Tech trends and business ideas

All things that motivate entrepreneurs

Thursday, April 19, 2007

Boy, do I have a sixth sense….

Hey, hey, hey….get a load o’ this…! Just last night did I make this post on the changing IT services landscape, I am looking at this article in Economic Times today. [it's US time shown here and I am writing it from India when it's 11:08 a.m, April 20]

Infosys planning new biz models….” screams the title. Hmmm, what would you call that ? Intuition ? Horse sense ? Just don’t bother, may be it’s just an incredible coincidence. I would’ve rather gone to town with it, but instinct tells me not to let go off the opportunity to display my rare brand of modesty for a change :)

My previous post had touched upon the need to rethink IT service delivery models since large corporations are increasingly micro straining their IT needs with a fine filter. Threat from smaller SaaS vendors and the capability of large clients to break down large scale requirements into modules for assigning to multiple vendors have all been cited as reasons in there. ISVs have been of late, feeling the heat despite co-location companies, managed services providers, systems integrators, and consultants all sense an opportunity to help them build the data center and hosting infrastructure they need to deliver their applications through a web-based services model, as well as advise them on their pricing, billing, and go-to-market strategy.

The latest article is a rant from Nandan Nilekani of Infosys that talent crunch and high attrition rates in the domestic IT industry has prompted Infosys to look at creating new business models that are not all that people-intensive

Quote –

We are looking at creating other business models as not all business models need to be people-intensive. But the new models will take some time to evolve. These could be more about products and price points and not necessarily the number of people you use”, said chief executive officer and managing director of Infosys Nandan Nilekani.

The $3 billion technology services company employs over 64,000 people worldwide. Responding to a query on whether the company would continue to hire employees at a scorching pace, Nilakeni said that Infosys will look at other models that are not people intensive. “We will leverage on our new assets like brand, intellectual property, customers, technology and presence”, he said.
IT companies in India directly employ around 1.3 million people and the number is expected to touch 2.6 million in the next three to four years. However, over the couple of years, domestic IT firms have been facing s talent crunch. Compounded with this has been the problem of high attrition — estimated at around 30%.
According to a Nasscom-McKinsey report on IT and BPO sector (2005), only around 25% of technical gradutaes and 10-15% of general college graduates are suitable for employment in off shore IT and BPO industries. India needs around 2.3 million IT/BPO workforce by 2010 to retain its current market share.
End -----

A couple of more coincidences (oh boy, I hate that word) and I will switch my profession to that of full time fortune teller. Intend to restrict my services only to hedge funds / Investment Banks that may come sniffing for new strategies to beat the market :)

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