Calling the NIITs and Aptechs to US

This thought crossed my mind while reading a recent jobs report about nearly 16% US unemployment and also an  article about India based IT services companies hiring US residents.

While it is good to know that Indian companies are increasing their local hiring, I feel there is one dimension that remains largely unexplored when it comes to addressing the growing US unemployment.

And that is for the India based training institutes like NIIT, Aptech and others to set up shop in the US.

It is a lesser known fact but it wasn't only the IITs that led to the Indian software revolution. A lot of credit goes to the training institutes that made it easier for chemical, civil, mechanical and other engineers and also science and commerce graduates in remote towns of India to  become computer software engineers in 3- 9 months. This engine delivered when the world required hordes of engineers to fix the Y2K problem and in many ways launched the Indian software services boom.

So the thought goes that with the high unemployment rates in the US, there may be an opportunity to do a reverse flow.

Train the large number of unemployed but English speaking population especially in the US heartland states and export them to countries like India, China, Brazil  which otherwise have a shortage of skilled white collar workers.

One important thing has to happen though.  These countries need to become attractive enough for US nationals to relocate there.

The US government can help here. They should work with India, China and Brazil to make these countries attractive destinations , much like US made itself attractive to immigrants from these countries.

Combine that with the prowess of the Indian training institutes we may have a good deal going..

Bigger than the Dot-com

Silicon Valley's vibrancy is truly unparalleled in the world and it is back and humming once again. 

We moved to the valley back in Dec 1999, when the dot-com boom was at its peak. I recall the energy in the discussions with colleagues and customers in those days. Companies were mushrooming up all around Highway 101, trying to build websites. The Nasdaq was threatening to touch 5,000 points and the valley was truly a “Happy Valley.” 

But then in early 2001, the bubble popped. Almost like someone stole the valley’s magic harp. The place started resembling a ghost town right up until late 2004. 

The good news though is that the magic harp seems to have returned to the valley and it feels like a happy valley all over again. While most of the country (and the world) is still coming to grips with recession and unemployment issues, Silicon Valley is buzzing again.   

The key difference though is that this time around the boom just seems bigger than the dot-com. Here are some reasons why the valley seems so upbeat to me-

• Most publicly traded valley companies are reporting great Q2 results, beating expectations by a big margin. 
• The IPO market is hot again- like LinkedIn and Pandora have already gone public. Zynga, Facebook and others are lining up for block buster IPOs.
• Last and perhaps the most important, there is not one but 4 different technologies fueling growth, Cloud, Social, Mobile and Big Data Analytics. These technologies will converge in many ways but each of these can individually drive market momentum. Back in the dot-com days, it was only the Internet driving all the growth but now the effect is quadrupled.

These 4 technologies will fundamentally change our way of life.How we collaborate with others will change. Mobility won't be a fad but a fact of life.Millions of new application ideas will come out of these technologies. Moreover, almost all the software out there will be re-written, creating/sustaining jobs.  It is exciting to be in the midst of this all. It's fun time again in the valley.

CIO or CCFO

The concept of Utility computing has existed since the 1960s and was taken further by IBM in the 1980s and 1990s. It has taken a few decades and our computing still doesn't feel like a utility service but we are surely getting there with virtualization, cloud, web services etc. etc..

With these changes there is a fundamental change that's going to happen in the role of the Chief Information Officer or the CIO.

a) the notion of anyone being the chief of "information" in any organization big or small makes little sense and has to go away.

b) secondly, if we do achieve all that the cloud or utility computing promises, enterprises will need a Chief Computing Facilities Officer (CCFO) and not a CIO.As long as the computing facilities, including the required hardware, software and tools, are in place much like the buildings and other facilities, employees will be able to take care of the rest.

So the aspiring CIOs of tomorrow should probably start preparing along these lines. I don't think it will take more than a decade to get us to the point when we need CCFOs and not CIOs.

The IT Services Disruption is here

In my post of December 8, 2008 I had predicted a disruption in the IT services landscape.
Back then though I had little clue on what could cause the disruption and what it would look like. I was predicting changes in the pricing models. However, the last 10 months and in fact the last 10 days have seen a lot of change in the IT services landscape.

Dell bought Perot, Xerox bought ACS this morning. This combined with Oracle’s acquisition of Sun and Cisco’s entry into servers, makes one trend very clear.

We are in many ways going back to the 1980s when Digital Equipment Corp (DEC) was the single source supplier from Hardware to OS to Applications for its clients. Vertically integrated solution providers (VISPs) are the new wave, and that’s what IBM, Oracle, HP and Dell want to be.

So how does that impact the IT service providers? With Dell’s-Perot and Xerox’s- ACS acquisition just like that we are down to just a handful of independent IT service providers. I can only think of Accenture, CSC, Capgemini, Deloitte and the India based providers. And these independent ones now have reason to worry.

The VISP trend is clear and will become stronger over the next few months as customers start accepting it. So the independents will have to think deep and hard if it really makes sense to remain independent. Their boards will be under tremendous investor pressure to sell to the next set of buyers, which according to me will be the likes of Cisco, EMC, Microsoft or SAP.

Once the next few deals are announced the remaining service providers will be forced to sell themselves cheap. So don’t be surprised if there are some fire sales out there after the next few deals.

The trends above lead me to one more question. Why is no one buying the large India based IT service providers like Cognizant, Infosys etc.

Is it because-
a) The cultural integration between US and Indian companies is more difficult
b) The Indian companies have higher market caps making them unattractive
c) India has lost its cost advantage and that one can get work done in North Dakota for the same cost as Bangalore.
d) Questions remain on the financial and corporate governance issues at India based service providers given the recent troubles at a major.

With President Obama vowing to bring jobs back to the US and also the proposed tax breaks for US corporations, it is possible that the cost advantage (or lack of) can in fact become a reality. All it will take is easing up of immigration to import talent from other countries.

Clearly the next few months will be interesting to watch as we start seeing more announcements. The disruption is here.. the services landscape is changing and will look a lot different in the next 18-24 months. Stay tuned...

IT Services- Ripe for disruption??

We are witnessing SaaS models disrupting the Software license business, utility computing disrupting the hardware business, but the IT services business has been the same old for the last couple of decades now… Yes that's true it has been 20+ years and vendors and customers alike are still discussing the onsite-offshore model, the dollar arbitrage etc.

I believe the IT services industry is ripe for some disruption along the same lines as the software and hardware businesses and soon...The outsourcing and offshoring demand still remains strong and more so in these troubled economic times, but something's got to change for this industry as
it moves forward.

One thought I have is that IT services will become pay per use. And some may argue that the current $/hr model is pay per use, but I mean something different. The unit of measure will not be an hour of service but really the deliverable from the service. So for example, the service card from an IT service provider will read-

· 500 function points delivered for $10,000
· 5 CRM apps with pre-defined functionality delivered for $250,000
· etc. etc...

Thoughts/comments, welcome….

My Taare Zameen Pe connection

Like all other Hindi movie fans, I enjoyed watching Amir Khan's latest movie Taare Zameen Pe. It is a touching story of a dyslexic child's struggles with the world.

However, I was even more delighted to discover a connection with the role that Amir Khan played in the movie. He played the art teacher, Ram Shankar Nikumbh.

Ram Shankar Nikumbh (known as Nikumbh sir) is not a fictional character. He was an art teacher at Hansraj Morarji Public School (HMPS) in Andheri, Mumbai. I have great memories of Nikumbh sir teaching several unartistic students like me to draw and paint. A great artist and a humble individual, Nikumbh sir was a great man and an outstanding teacher. While he did not dance and sing with students like Amir Khan did in the movie, Nikumbh sir was known for being enormously patient with his students. He would never raise his voice leave aside yell at anyone.

The movie is a tribute to a master.. I wish he had lived to see this movie.

Thanks to Amol Gupte for writing this story and thanks to Amir Khan for bringing it to life.

Selling IT Consulting Services in the US

I have spent the last 8 years selling IT consulting services(the onsite-offshore variety) in the US market. My previous experience was selling hardware and software solutions to the Indian IT market.


Certain client characteristics that stand out in the US market are:


1. Relationship oriented customers- Clients in the US like to trust their vendors and feel very disappointed when vendors don't live up to committments. Clients are willing to take risks with lesser know companies as long as they can trust the person representing that company. Contrast this to clients in India who tend to be more conservative in their choices and would typically pick the bigger and well known names.


2. Clients know what they are talking about- Almost all the time, US clients are well aware of technologies and solutions that can solve their business problems. That said they are always looking for vendors that can teach them a few things more than what they may already know.


3. They like people who push back and hate order takers- They hate vendors that are "order takers", and this is where most Indian companies trip. For most Indian professionals being an order taker is almost like some hard wired instinct. While they only mean well for the customer, the attitude is to do as the customer says even if they know the customer is wrong. However, that is not necessarily appreciated. US clients like to hire "true consultants" who can be proactive in their thinking and deliver over an above what's been told.

If you are a sales person selling IT consulting services in the US, here are some tips that may come in handy.


1. Speak clearly- Clients love people who can demonstrate clarity of thought, i.e. think and speak clearly. Most people have a tendency to stutter and stammer.. use words such as "you know", "like", "maybe" while speaking.

2. Write to the point- US clients hate long winded sentences. Sentences where one has to dig through the sentence, read it multiple times to understand what the author is trying to say. Direct and to the point communication is always appreciated.

3. Listen - One cannot over emphasize the need to listen. I've seen a lot of sales people walk into meetings with their laptops half-open. These sales people are ready to start a presentation about their company and its services even before people have settled into their seats. Obviously, such sales people eat the entire meeting time, just talking about themselves and their company. The right approach would be to listen to the customer first and talk about yourself later.

4. Prepare- Always spend sufficient time researching the company and the executive you are meeting. These days there are several tools that can help you do the same. Information sources like Hoovers to business networking sites like Linkedin. All are great ways of doing research. If you walk into the meeting, having done your research, trust me you will do well 9 times out of 10.

5. Network-Last but not the least, it is extremely important to network effectively in order to succeed in the US market. Remember, I mentioned relationship oriented customers. Your chances of making a sale are greatly enhanced if you know someone who knows your prospective client and can speak highly of your services. It is equally important to network with your competitors, industry analysts, venture capitalists etc. etc. Meet more people, build your network and that will pay in the long run.

Happy selling...