More and More, Made in India

My friend Shailaja Neelakantan has a nice little article in Far Eastern Economic Review which highlights the changes in the Indian economy go beyond outsourcing and off-shoring of software and call centers. She highlights on the trend of how companies are now developing software and selling it in the global markets.

bq. iCode is among a growing number of Indian companies that are now developing and selling original software, instead of just supplying code-writing and other IT services to corporate clients. Until recently, many of the most popular software products from the likes of Microsoft and Oracle were made by Indians labouring in obscurity. But increasingly some of the world’s best-selling software products are being made in India by Indian companies.

I have long talked about this trend, and have argued that the biggest threat to Silicon Valley is not outsourcing but those H-1 B visa types who were sent back as downturn roadkill. They went back with a skill sets that can be easily forgotten. First they went back with the knowledge of what American companies and customers really want. Remember, if you know the customer, then you can build the right product. But more importantly, these folks went back with a complete lowdown on the problems facing the implementing ERP systems, CRM and other corporate IT crap.

Only last weekend I spent time with an up and coming venture capitalist Asheem Chandna and posed him this theory. He told me about ICode. And even before I could follow-up, here comes this wonderful article. With some more names. This is a trend Silicon Valley needs to watch out for.

bq. Meanwhile, a protectionist backlash against outsourcing is gaining momentum in America and Europe, and competition remains fierce in the offshore IT-services market. Indian companies have already cornered 60% of that market, worth $16 billion a year. But with competitors slashing costs and margins in services shrinking, companies are realizing that the high-margin products business–where Indian companies have only tapped 0.2% of a $180 billion global market–is the way to go.

Read the article from Far Eastern Economic Review


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