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Why I Have Become Pessimistic About Indian I.T.

Source | LinkedIn : By Vivek Wadhwa

When Wall Street Journal and Forbes published articles, a few years ago, predicting the demise of Indian IT, I responded in BusinessWeek that they were dead wrong. I said that the outsourcing market had a long way to go before it peaked; rising salaries and attrition rates were not a cause for long-term concern; and Indian IT would soon become a $100 billion industry. I was, of course, right.

Now I am ready to declare the end of the line for Indian IT. There are new $100 billion opportunities that could revitalize this industry. But from what I’ve seen, Indian executives seem incapable of steering their ships in the right directions.

It is not that Indian outsourcers have become less capable of servicing Western needs. It is that their customer base—the CIO and IT department—is in decline. With the advent of tablets, apps, and cloud computing, users have direct access to better technology than their IT departments can provide them. They can download cheap, elegant, and powerful apps on their IPads that make their corporate systems look primitive. These modern-day apps don’t require internal teams of people doing software development and maintenance—they are user-customizable and can be built by anyone with basic programming skills.

It takes decades to update legacy computer systems, and corporate IT departments move at the speed of molasses. So, Indian outsourcers have a few more years before they suffer a significant decline. They certainly won’t see the growth and billion-dollar outsourcing deals that have brought them this far.

The same advances that are changing the IT landscape are also creating new opportunities.

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