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software industry has set its sights is the e-banking, financial and insurance
market. In 2000-01, close to 36 percent of the country’s software export
revenues were generated from these segments. Here too, no slowdown or reduction
of business is expected.
We need to remember that one of the success mantras to cope with the slowdown
is to cut costs or outsource. Surveys by consultants such as Merrill Lynch and
Goldman Sachs based on responses of CIOs in US, have shown
that these companies will increase offshore outsourcing and that
many will come to India.
However, there are many US customers of Indian software companies
that are being hit by the slowdown.This is creating a ripple effect and
causing a reduction in the outsourcing business that normally comes to
India from these customers.
Therefore, if we place the positives and negatives face to face and analyze the
situation, we can confidently say that the Indian software industry will continue
to grow at a handsome pace.
There have been various media reports challenging this theory. We have been
reading articles about how thousands of Indians are coming back after losing
lucrative jobs in the US. While some of these stories are partially true, many are false.
What we have to realize is that over the last three months, it is the “body shopping
business that has been severely curtailed and not so much the legitimate on-site
services activity. Body shopping is not a part of the software industry. Body shopping refers
to the activity where recruitment agencies hire Indian software engineers, enable them to
get HIB visas, send them to the US and earn a commission on them.
The US economic downturn has drastically hit “Body shoppers” and
put them temporarily out of business. Even on-site services have
been struck, though the problem will not lie in bagging orders,
but rather in the elongating sales cycles.
Theother bit of encouragingnews is thatmanyUSclientswhowere earlier
going for on-site orders, are now converting these, owing to cost considerations into off-
shore assignments. While off-shore projects work out inexpensive for US companies,
they represent a lucrative business opportunity for Indian companies.
Derisive remarks such as B2B now
implying “Back-to- Bangalore” and
B2C now standing for
“
Back-to-Chennai” are not
really accurate.
