Indian Aspirations and the Future of Outsourcing

Indian IT came into its own in the Y2K crisis, when enormous efforts were made to rewrite ancient code by outsourcing it to India’s so=called “code factories.” Since that time, the industry has significantly matured. It remains export-focused, and today includes India’s outsourcing giants such as TCS, Infosys, and Wipro; plus hundreds of innovation and coding centers operated by multinationals and taking advantage of the country’s skilled workforce and major center infrastructures.

Indian IT is now facing the demands of a new era, in which the traditional outsourcing model is under threat and technology is providing a range of new challenges and opportunities. Indian companies have adopted a number of strategies to cope with these changes, and are emerging from years of high growth with plenty of cash for acquisitions to broaden services. The Indian firms have also been establishing presences overseas for marketing, skills sourcing, and political reasons. They have also been working to build local markets in an expanding economy with a population that is likely to exceed that of China in just a few years.

Many multinationals are already operating in India, and there are significant opportunities. Cloud and advanced technologies, such as Big Data, provide opportunities, particularly among the country’s mid-sized businesses (small companies are still largely paper-based). India is also a significant global source of engineering talent.

For companies wishing to enter this market, there are some regulatory barriers. Issues such as market complexity (smaller firms and multiple local languages) can be a factor, as can growing concerns about external storage of data and reliance upon technology that may be subject to overseas spying. Opportunities here require local expertise, but there are innumerable success stories. Understanding the local market is, of course, critical.

India is a huge country that has remained out of the limelight due to the ascendancy of China next door. It has developed significant technology resources, and is more sophisticated in this area than its neighbor, but growth has been somewhat sporadic, and the focus upon outsourcing has created unusual market conditions. Companies have focused upon meeting the needs of global partners, so that provision of services such as local Cloud have lagged. This is beginning to change, however. As Indian companies move up to higher value activities, they are likely to have an increasing impact upon the global IT sector.

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BJ Dooley

About BJ Dooley

Brian J. Dooley is a Strategy Consultant and Associate Research Analyst with Saugatuck Technology. Originally from the US, Mr. Dooley now resides in New Zealand – providing global and regional insight and market analysis on a wide range of technologies, including business intelligence, collaboration, cloud computing, agile software development, as well as international telecommunications. Mr. Dooley is an author, analyst, and journalist with more than 30 years' experience in analyzing and writing about trends in IT. He has written six books, numerous user manuals, hundreds of reports, and more than 1,000 magazine features. Previously, he was a Senior Analyst for Datapro (Gartner), and a Senior Product Information Specialist for Unisys Corp. As an independent analyst, he has worked with many of the top firms in the research and analysis industry, as well as for industry clients around the globe. Mr. Dooley is a graduate of McGill University, with graduate work at the University of Pennsylvania’s Annenberg School in Cybernetics, Information Theory, Statistics and Communications. He initiated and is on the board for the Graduate Diploma of Technical Communication program at Christchurch Institute of Technology, and he was on the editorial advisory board for Faulkner Technical Reports.