There are few hidden aspects that are in my opinion affecting the Indian IT eco system. Everybody talks about automation making the jobs redundant, I think there are more factors affecting it.
I remember back when I graduated, only options I had was to work for these outsourcing companies. That is no longer true. India has a rich ecosystem of startups that definitely pay better than the outsourcing companies. I often compare the indian IT eco system to multi-level marketing, where older generation of employees would recruit newer generation to keep the costs low. Now, with rich startup ecosystem, talented younger generation have become expensive and scarce for these outsourcing companies.
Secondly, most of these outsourcing company's ethics and principle were derived from IBM, which led to creation of long chain of hierarchical management. I remember when I worked in one of these companies, an approval of procuring a server (not the server itself) would take months. There would be unwarranted politics. Lot of these manager are essentially skill-less. This has led to a problem where attracting talent to these organisation is very difficult. Furthermore, to keep the costs low, these outsourcing companies would go to third tier colleges and cities. Talent from colleges and universities are basically unemployable, resulting in a poor client experience.
Thirdly, major clients have started realizing the cost of outsourcing and benefits of owning your own technology. In my opinion, these outsourcing companies were basically sweatshops masqueraded as technology companies. Attrition rate in outsourcing companies are really high. If these outsourcing companies would have controlled the attrition rates and built technology products, these companies would have been relevant. Before the financial crisis, these companies did have resources and talent to do so. Companies like TCS did try to build their products and did get sued [1]. However, you would be suprised how many banks use their banking product [2].
Having said that, most of the outsourcing companies have very cash rich. I wouldn't be surprise if they start acquire smaller product companies to stay relevant.
I remember back when I graduated, only options I had was to work for these outsourcing companies. That is no longer true. India has a rich ecosystem of startups that definitely pay better than the outsourcing companies. I often compare the indian IT eco system to multi-level marketing, where older generation of employees would recruit newer generation to keep the costs low. Now, with rich startup ecosystem, talented younger generation have become expensive and scarce for these outsourcing companies.
Secondly, most of these outsourcing company's ethics and principle were derived from IBM, which led to creation of long chain of hierarchical management. I remember when I worked in one of these companies, an approval of procuring a server (not the server itself) would take months. There would be unwarranted politics. Lot of these manager are essentially skill-less. This has led to a problem where attracting talent to these organisation is very difficult. Furthermore, to keep the costs low, these outsourcing companies would go to third tier colleges and cities. Talent from colleges and universities are basically unemployable, resulting in a poor client experience.
Thirdly, major clients have started realizing the cost of outsourcing and benefits of owning your own technology. In my opinion, these outsourcing companies were basically sweatshops masqueraded as technology companies. Attrition rate in outsourcing companies are really high. If these outsourcing companies would have controlled the attrition rates and built technology products, these companies would have been relevant. Before the financial crisis, these companies did have resources and talent to do so. Companies like TCS did try to build their products and did get sued [1]. However, you would be suprised how many banks use their banking product [2].
Having said that, most of the outsourcing companies have very cash rich. I wouldn't be surprise if they start acquire smaller product companies to stay relevant.
[1]https://timesofindia.indiatimes.com/business/india-business/...
[2]http://sites.tcs.com/tcsbancs/