Wednesday, April 23, 2008

A crash in TCS stock underlines end of Indian indigenous IT outsourcing superpower

Source : Click

Indian companies have come a long way it providing IT outsourcing services. The golden era of IT outsourcing empire is coming to an end for Indian companies. The global clients are bow demanding quality products and services not just “programmer bodies”.

The management of Indian IT companies hardly find any difference trading spices versus software bodies. They hire cheap Indian cyber labor and sell them for a hefty hourly profit to American and European companies.

It is an easy business model. The inefficient American and European corporate management are eager to cut cost by any means to hide their inability to expand revenue and total incompetence in creating innovation. The cost cutting is easily served hiring TCS, Satyam, Wipro and Infosys type companies to perform the same tasks for pennies on the dollar.

The easy life for the Indian body shoppers like TCS, Satyam, Wipro and Infosys type companies is coming to an end. The western companies has built their own shops in Bangalore, Hyderabad, Mumbai and so. They are also demanding cut in outsourcing costs. In addition, talented Indian programmers are leaving the Indian companies in seek of better opportunities with Microsoft, IBM and so on.

TCS slumped 10.6% to Rs 887. Wipro and Satyam plunged 5% each to Rs 431 and Rs 436, respectively. Infosys shed 2.8% at Rs 1,599. At the same time Sensex touched a high of 16,854 - up 256 points from the day's low. The Sensex finally ended with a gain of 45 points at 16,784.

It signifies end of Indian indigenous IT outsourcing superpower. It is the result of India’s failure in creating world-class software products instead of just supply programming bodies.