Thought Garage

There was so much pressure on Indian IT Services firms for a long time to enter product space and they refused and insisted that Services is the key. After all, their strength and  innovation is in creating market driven and efficient service delivery models. 

They not only succeeded with flying colors in delivering services, they influenced the entire world to turn to services. So in more than one way, there were right on about services. 

Some key milestones that indicate the strong inclination towards services just the way Indian IT Services headed all along:

• IBM once synonymous with PC sells its iconic PC Business and rebrand itself as IT services (or emphatically Smart Solutions for the planet)
• HP buys EDS and says it is critical to enter Services business as profits drop in all other directions.
• Dell buys Perot Systems, seen as following HP.
• Xerox, the iconic innovator buys Affiliated Computer Services, citing exactly the same reason of survival due to dropping profits every where.

Now, will Indian IT Services companies get the true credit they deserve in the market place?

Its pretty unusual for many otherwise very successful Indians to write books, about anything. Be it sharing what they have mastered or what they have thought about, leave alone preaching something. I was thrilled to see Kishore Biyani unveiling ‘It Happened in India’ a couple of years ago.  And I recently came to know about Nandan Nilekani touring in USA promoting his own book, ‘Imagining India’. It is another of those aha moment to cherish. 

I was surprised the book cover appears different for the version that will be sold in India vs. the one that will be sold in US.

The website of the book, ImaginingIndia displays the cover page (left) with seemingly thoughtful Nilekani on the cover. Where as the one I saw on Amazon has cover page (right) displaying a busy train station.

Did Nilekani think, it would be embarrassing for foreigners if he had put his own face on the cover? Just like Infosys thought it would be embarrassing to foreign nationals to sing our National Anthem (and decided to play an instrumental version instead a couple of years ago).

Watch this video on TED appears to be a good summary of the book delivered by Nandan Nilekani himself.

When I watched this video on TED, I was far from impressed, by the content or the presentation itself. I was rather infuriated by Infosys leadership as a whole. I lived in Bangalore for about 5 years, working right next to Infosys campus. And have many friends have been working for Infosys. We as a group together never understood, why Indian media is so crazy about Infosys and Infosys alone. While I respect Infosys as a business and what they could achieve and for being a role model in some aspects, I hate it for its hypocrisy and lack of social responsibility (not charity).  I feel the contribution of Infosys to Indian economy and entrepreneurial ecosystem as a whole has been highly overrated. 

A few comments I left on the TED video page.

 

Nandan Nilekani just demonstrated once again that Talk is cheaper than deeds. Infosys leverages all incentives Indian government provided to build a great business, but consistently refused to build and contribute to the very infrastructure he mentioned in the talk. The only infrastructure it ever built was its own campuses.

While taking advantage of the very demographics and social fabric to create today’s Infosys, it want to move away from its social obligation and dreaming about labor reforms that will allow it to hire and fire at will.

Unfortunately media around the world gets carried away with the dazzling stories of Infosys, it never got a chance to feel the real nerve of India and true entrepreneurs that created and empowered the democratic India. Hope, the world will see India beyond this fog someday.

Mean time, many Indians and rest of the world alike take pride in hypocrisy and ‘honor’ that never belong so much to Infosys.

By all standards, its a pretty heavy book, 528 pages and digressing. So definitely takes a while to read it and understand what he has to say.

There is a silver lining to the economic turbulence in Indian markets. Net effect of the economic turbulence is that top 10 firms in fact notched up their market valuations.

Breaking its six-week long losing trend, country’s top 10 club added over Rs. 20,000 crores to the combined market valuation in the past week, even as Reliance Industries and Infosys suffered losses.

The top 10 companies together gained Rs. 23,273 crores in market cap last week, while country’s most valued firm Reliance Industries alone lost Rs. 24,063 crores from its valuation. Also IT bellwether Infosys’ valuation declined to Rs. 6,371 crores in the past week.

At the end of Friday’s trade, the total market value of the 10 most valued firms, comprising six from public sector and four private sector entities, stood at Rs. 10,15,150 crores, up from Rs. 9,91,877 crores a week ago.

…

As per the elite list of top 10 firms, RIL is followed by ONGC (Rs. 1,58,619 crores), NTPC (Rs. 1,24,671 crores), Bharti Airtel (Rs. 1,23,379 crores), SBI (Rs. 79,312 crores), Infosys (Rs. 72,728 crores), BHEL (Rs. 68,782 crores), MMTC (Rs. 68,726 crores), ITC (Rs. 65,908 crores) and NMDC (Rs. 61,810 crores).

Source: Top 10 firms gain over Rs. 20,000 croress in market cap

Does it mean, more investors are moving to stable and large firms from volatile small and medium stocks?

Top 25 Consumers of H1B in 2007 (that account to almost 20,000 Visas) now have to speak up about how they use H1B applicants.  Senators Dick Durbin and Chuck Grassley have sent letters to these companies seeking answers to an array of questions that will reveal how these companies use H1B petitions. Click here to view a copy of the letter.

I guess, this is particularly relevant in the wake of two new bills submitted to increase the numerical limitation on H1Bs.

Senators Dick Durbin (D-IL) and Chuck Grassley (R-IA) sent a letter  today to the top 25 recipients of approved H-1B visa petitions in 2007, seeking detailed information on how each firm uses the visa program. These firms were responsible for nearly 20,000 of the available H-1B visas last year.

1. Infosys Technologies Ltd.,
2. Wipro Limited,
3. Satyam Computer Services Ltd.,
4. Cognizant Tech Solutions,
5. Microsoft Corporation,
6. Tata Consultancy Services Ltd.,
7. Patni Computer Systems Inc.,
8. US Technology Resources LLC,
9. I-Flex Solutions Inc.,
10. Intel Corporation,
11. Accenture LLP,
12. Cisco Systems Inc.,
13. Ernst & Young LLP,
14. Larsen & Toubro Infotech Ltd.,
15. Deloitte & Touche LLP,
16. Google Inc.,
17. Mphasis Corporation,
18. University of Illinois at Chicago,
19. American Unit Inc.,
20. Jsmn International Inc.,
21. Objectwin Technology Inc.,
22. Deloitte Consulting,
23. Prince Georges County Public Schools,
24. JPMorgan Chase and Co., and
25. Motorola Inc.

Source: United States Senator Chuck Grassley of Iowa

Numbers don’t lie

It is quite evident from the numbers that, a very significant number of those companies are from India and as I understand the nature and intent of their H1B applicants is to come and work for US clients and coordinate out sourcing efforts and in most cases moving more jobs to India.

Another interesting issue is, as Microsoft Chairman Bill Gates said in his testimony that companies like Microsoft may loose edge as they fail to garner global talent. In short, they are not getting enough H1Bs as other Indian counter parts are consuming a lot more and becoming a direct competitor for H1Bs.

So, what will happen now?

So how this problem is solved? Will Increase in H1B  solve this issue? Or restricting Indian counter parts will reduce the impact?

If USCIS just increase the numbers, what is the guarantee that non-US companies won’t consume a higher number again and leading to the same situation as today?

Can Indian companies offer a justification that stand a chance?

It is quite interesting to see how Indian companies defend their high numbers with reference to Competition and innovation argument in USA. Lack of such a justifiable explanation could definitely lead to restrictions imposed on these companies that may restrict if not prevent these companies getting such a high number  of H1Bs.

Update: Full List of H1B Consumers of 2007 can be accessed here in an excel sheet at Information Week :  Excel File