An Old Order Changeth

It was early 2002. We were all in the office cafeteria, sitting across a television set that was tuned to a business news channel. Mr. Narayana Murthy was on a show, speaking of how India should claim its rightful place as a leader in economic growth. He exhorted young engineers to go out and build the best factories, world class bridges across rivers and achieve feats that will serve India’s cause of creating world class infrastructure. “In that case”, scrowled one of our colleagues, “his company should be the first to stop hiring civil engineers by the truckloads and make them support T-SQL code”. I was merely weeks into my career as an IT Consultant and that was, in a way, a mug of cold water to wake up my senses. The line and this incident has stayed with me ever since

A couple of years back I stayed a few days at the Infosys campus at Mysore (my apologies if I overtly use Infosys as a bellwether in my article. This is for a couple of reasons. One, for better or for worse, Infosys IS the bellwether of this industry. Two, this is one company I know a little bit having engaged with them on a few initiatives. I should make it clear that what applies to Infosys applies to other IT Services firms in the country for all of them have me-too business models at the core). Now back to Mysore. After one is done putting one’s lower jaw back firmly in contact with the upper after taking a round in the campus, dotted with a gothic structured training institute, a full sized cricket stadium, shopping mall, movie theaters, auditorium and a fantastic restaurant, it becomes clear that this is where mint fresh Infosycians are moulded to belong. This elaborate finishing school makes the young graduates learn skills that are valuable to Infosys (a cynic friend once said this is where the engineers are “finished”, complementing the words with a horizontal movement of the index finger across the throat). These are not skills of building roads that dry quickly and last several monsoons. Neither are the cohorts taught the basics of building next generation telephone networks that can reach rural India quicker than the traditional ones. They are not challenged to think of solutions to provide clean drinking water to citizens of this country. In all likelihood they are taught how to write T-SQL code

Once I was asked to take a basics of finance or some such session for a bunch of engineers – fresh from campus and working with our firm. I finished up the session early and asked the bunch of young kids ask me any question they’d wish. One young boy asked how quickly after the training is over would they ship him for a project to the US. Now ours was a product company and I thought the youngster was better served building products in Bangalore than supporting some UNIX server in Boston. When I asked about his motivation to go on a project there was uncontrolled laughter in the class. “Sir, meter chalu”, shouted a voice from the backrows. I understood. The fifty odd US Dollar of per-diem he would receive from the assignment was much more valuable to him than building the next generation software product in Bangalore. A friend of mine took up mechanical engineering even when his IIT entrace test rank allowed him to take up Electrical, which in my days had a higher pecking order. It was, he reasoned, because he had made up his mind at twelve years of age. Their khatara fiat car had broken down on the road, his father and he were pushing it out to a side and the entire road honked their displeasure. “I wanted to make cars that won’t put their owners in that spot”, he said sealing the issue of his choice with finality. Sadly, they do not make them like that anymore

That is why when last week Infosys announced a shrinkage (shrinkage, yes, from a company that in early 2000 was valued at a market implied yearly growth rate of 25%) of US Dollar revenue by 1.1%, I was happy (full disclosure: I do not hold Infosys stock but I am an investor in TCS, which announced a mere 3.4% increase of US Dollar revenues the same day). I was happy because this trend, if continued for a decent time in the future will decrease the relative attractiveness of IT Services as employment for young engineers. Companies like Infosys, Wipro and TCS will continue to make money from existing projects that are mostly into maintenance – something that will not be attractive for a large talent base. The network effect also should nicely kick in the dual impact of less attractive salaries and even less attractive work content permeating through student networks. This I hope – and at this point we can just hope – turns the needle in a direction that it ought to point for a country that is in serious need of infrastructure execution and sustainable innovation across the board

Infosys (and again, I use this company as a mere example) has minted several millionaires from its laudatory generous stock participation schemes. The wealth effect created by the IT Services companies certainly deserves praise. One can only hope that the now dwindling fortunes of IT Services companies serve as a reminder to these individuals who wish to risk a part of this wealth in entrepreneurial ventures – a reminder to not mimic services as a business model and focus on breakthrough innovation in the software engineering space. It has been oft repeated that India needs a vibrant start-up ecosystem – where there are thousands of ideas starting up, of which a few hundred survive and from within that mere handful comes the next Twitter or the next Facebook. May that be the other side – the sunnier side – of the dark clouds that currently hover over the Indian IT services industry. May the smart engineer coming out of school make a conscious choice – and no longer an irrational choice – of responding to his true calling than submitting to mediocrity for a few dollars more

Post Script: The very often quoted line to poetically herald change is the one I have used in the title of this post. Lord Tennyson’s words that followed the line, as uttered by the moribund King Arthur but much less frequently quoted in literary circles, would have made a great sub-header too – “lest one good custom should corrupt the world”

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4 thoughts on “An Old Order Changeth

  1. Subrata – Definitely one of the best perspectives I have seen on this subject. At the new startup we grapple with this problem on a daily basis. Talent being sucked up by the service majors, the handful of skilled people being priced out of range by deep pocketed firms with castles built on speculations and so on. That is just the short term issue. Long term only a really small percentage of these services firms gain skill proportionate to their experience further poisoning the skills available in the country.

    The solution you hint at attacks root of the problem. I only wish it happens sooner!

    • Changes such as these are fundamental and take time, Mahesh. I am sure there was a time when good scientists/engineers went to work for Bell Labs while the more enterprising sector wrung their hands.

      On their part, the startups also must pool their means to collectively invest in both skill promotion and also evangelizing the long term benefits of careers outside such tech factories. At their current state of evolution, startups cannot dictate employment but can surely work to change mindsets – catalyze the process, if you will. You know the drill!

      • i am not related to software industry at all,i am working as a medical representative. sir by the above blog i get the feeling that entire infosys,or entire software industry is a sinking ship. is it so? please tell me its not. because my sister is getting married to a software engineer and i wouldn’t want them to suffer later. please provide me more insight if possible. thanks in advance.

      • Vijay, assuming your future brother-in-law is a proper software engineer (that is, one who can build software systems, understands algorithms, can architect systems and write code) you don’t have to worry. The profession will not go away. Perhaps neither will Infosys (and its likes) but they will need to relook at their business models. The salad days of the software services industry (note the word “services”) is over though – the days of guaranteed double digit salary hikes, assured onshore stints and ESOPs are a thing of the past

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