Comments on: How Will IT Services Fare in the Coming US Recession http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/ Basab Pradhan's weblog about business and life in a 'flat world'. 6 AM Pacific is the best time for a global conference call. Sun, 14 Mar 2010 03:02:52 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: 6 AM Pacific » Blog Archive » The IP imperative for IT Services or How to Beat the Recession http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-13436 6 AM Pacific » Blog Archive » The IP imperative for IT Services or How to Beat the Recession Wed, 16 Apr 2008 15:42:03 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-13436 [...] The Indian IT Services industry is going to feel the pain of the US recession which is likely to spread to other major markets as well. This recession is going to be different as I have said before. [...] [...] The Indian IT Services industry is going to feel the pain of the US recession which is likely to spread to other major markets as well. This recession is going to be different as I have said before. [...]

]]> By: Basab http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-12579 Basab Sat, 08 Mar 2008 20:06:17 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-12579 Scott, No plans to advertise on this blog. btw, there is a Contact form on the blog. thanks Scott, No plans to advertise on this blog. btw, there is a Contact form on the blog. thanks

]]> By: Scott http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-12458 Scott Mon, 03 Mar 2008 22:51:01 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-12458 I am contacting you through this contact form as there was no email address available. We would be interested in purchasing advertising on your blog http://6ampacific.com/ . Please get back to me using the email address I have entered if you would be interested in discussing this further. I am contacting you through this contact form as there was no email address available. We would be interested in purchasing advertising on your blog http://6ampacific.com/
. Please get back to me using the email address I have entered if you would be interested in discussing this further.

]]> By:   Another Post on the Dollar-Rupee Race — Time and Again http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-10287   Another Post on the Dollar-Rupee Race — Time and Again Sun, 06 Jan 2008 08:18:12 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-10287 [...] cheaper workers”, how can we not talk about the Indian Economy? My analysis closely aligns with Basab Pradhan’s thinking in this regard. Like he mentions, the industry that is “in the eye of the storm” is the [...] [...] cheaper workers”, how can we not talk about the Indian Economy? My analysis closely aligns with Basab Pradhan’s thinking in this regard. Like he mentions, the industry that is “in the eye of the storm” is the [...]

]]> By: Another Post on the Dollar-Rupee Race « Time and Again http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-10277 Another Post on the Dollar-Rupee Race « Time and Again Sun, 06 Jan 2008 02:16:22 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-10277 [...] workers”, how can we not talk about the Indian Economy? My analysis closely aligns with Basab Pradhan’s thinking in this regard. Like he mentions, the industry that is “in the eye of the storm” is the [...] [...] workers”, how can we not talk about the Indian Economy? My analysis closely aligns with Basab Pradhan’s thinking in this regard. Like he mentions, the industry that is “in the eye of the storm” is the [...]

]]> By: Ram http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-9743 Ram Sun, 23 Dec 2007 08:12:51 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-9743 Folks, Although slightly off track, I feel, this time, the slowdown will have a difference due to the following factors: 1. I always felt, Top 10 service providers (IBM, ACN, TCS, Infy, Cap etc) will start "looking" (services, model, target customers..) the same by 2010 irrespective of branding. The slowdown will probably push that date ahead..i.e, it could happen within next 18 months 2. Once the "industrialisation" happens, innovation becomes key. Thus, the folks who will emerge out leaders out of the current slowdown will be those who have huge "innovation/R&D" budgets and ability to monetize IP or build these capabilities in next 18 months 3. The threat for Indian IT leaders is not as much about growth ( The share is only 3% and hence lot of money is out there..) rather it is on: - Margins - Without an innovation agenda and solutions forming a key component of revenue, indian IT leaders are particularly vulnerable. The 3 year window they had is reduced to 18 months due to this slowdown - Relevance: Once the Top 10 start "looking similar" quality of revenue and positioning for future becomes significant. Indian IT leaders are vulnerable here. They may continue to grow but they would have given away the leadership (for example, neither TCS nor Infosys are leaders in their own backyard !!. The transformation agenda in India is being driven by IBM, Accenture if you have been following media). Thus, there is a real risk of Indian IT leaders becoming irrelevant outside or at home. Folks,
Although slightly off track, I feel, this time, the slowdown will have a difference due to the following factors:

1. I always felt, Top 10 service providers (IBM, ACN, TCS, Infy, Cap etc) will start “looking” (services, model, target customers..) the same by 2010 irrespective of branding. The slowdown will probably push that date ahead..i.e, it could happen within next 18 months
2. Once the “industrialisation” happens, innovation becomes key. Thus, the folks who will emerge out leaders out of the current slowdown will be those who have huge “innovation/R&D” budgets and ability to monetize IP or build these capabilities in next 18 months
3. The threat for Indian IT leaders is not as much about growth ( The share is only 3% and hence lot of money is out there..) rather it is on:
– Margins – Without an innovation agenda and solutions forming a key component of revenue, indian IT leaders are particularly vulnerable. The 3 year window they had is reduced to 18 months due to this slowdown
- Relevance: Once the Top 10 start “looking similar” quality of revenue and positioning for future becomes significant. Indian IT leaders are vulnerable here. They may continue to grow but they would have given away the leadership (for example, neither TCS nor Infosys are leaders in their own backyard !!. The transformation agenda in India is being driven by IBM, Accenture if you have been following media). Thus, there is a real risk of Indian IT leaders becoming irrelevant outside or at home.

]]> By: Umang.D. Rathod http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-9376 Umang.D. Rathod Mon, 10 Dec 2007 16:42:30 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-9376 wel, to be frank enough a person shouldn't be dogmatic. as far as i am concerned u.s is not going into recession,majority of the venture capitalist funds and institutional investors are hugely invested in india and china. with a high gdp growth of 8-9% ,the likely chances of poor performance of those funds are negligible,due to the p/e expansion of emerging markets the major beneficaries are in u.s.according to me the jobless reports data which showed signs of recession in early july were solely due to severe outsourcing.higher.although the gdp growth of us will slow down to 1.4% from estimated 1.8% .. its still exceptable with sub-prime issues around it..? isnt it? its just that the standard of living in u.s has reached its peak, and due to less per capita income an individual might not be able to fulfill his luxurious desires, can this be termed recession..? the higher commodity prices will certainly effect the livelihood but still, it will be coped.some more rate cuts and u.s will be ready to bounce back ,which was even witnessed in data realeased after the previous rate cut. i m just 22, and the views are as of my understanding ,i someone wants to correct my views, he's welcomed i have participated in capital markets from last 3 years and i have learnt a golden rule-" the best bull market commences when the last bull turns into a bear". wel, to be frank enough a person shouldn’t be dogmatic. as far as i am concerned u.s is not going into recession,majority of the venture capitalist funds and institutional investors are hugely invested in india and china. with a high gdp growth of 8-9% ,the likely chances of poor performance of those funds are negligible,due to the p/e expansion of emerging markets the major beneficaries are in u.s.according to me the jobless reports data which showed signs of recession in early july were solely due to severe outsourcing.higher.although the gdp growth of us will slow down to 1.4% from estimated 1.8% .. its still exceptable with sub-prime issues around it..? isnt it?
its just that the standard of living in u.s has reached its peak, and due to less per capita income an individual might not be able to fulfill his luxurious desires, can this be termed recession..?
the higher commodity prices will certainly effect the livelihood but still, it will be coped.some more rate cuts and u.s will be ready to bounce back ,which was even witnessed in data realeased after the previous rate cut.
i m just 22, and the views are as of my understanding ,i someone wants to correct my views, he’s welcomed
i have participated in capital markets from last 3 years and i have learnt a golden rule-” the best bull market commences when the last bull turns into a bear”.

]]> By: Deepak Shenoy http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-9372 Deepak Shenoy Mon, 10 Dec 2007 14:51:55 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-9372 Uhm, but isn't the problem in the FS industry so wide and deep that it can be a serious inflexion point? We're talking hits of way beyond the $100 billion mark, which obviously will hit practically every other function of the industry. And Kris has to maintain that Infy won't be hit. There will be a run on anyone that admits to a problem = see what happened to WNS stock after their August 15 conference call. The issue unfortunately isn't short term, in my opinion. This is the return to innocence, the biggest nightmare of the financial bazaar. Uhm, but isn’t the problem in the FS industry so wide and deep that it can be a serious inflexion point? We’re talking hits of way beyond the $100 billion mark, which obviously will hit practically every other function of the industry.

And Kris has to maintain that Infy won’t be hit. There will be a run on anyone that admits to a problem = see what happened to WNS stock after their August 15 conference call.

The issue unfortunately isn’t short term, in my opinion. This is the return to innocence, the biggest nightmare of the financial bazaar.

]]> By: Krishna http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-9366 Krishna Mon, 10 Dec 2007 07:07:58 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-9366 I go unless there is a competing market with the consumption levels close to that of US, world economies can’t put up with a moribund US markets for long. Every one feeds off it and it tastes nice. It’s impossible to conceive another market like that, not the least in IT services. Some day, others may achieve its size on the supply side(?), but demand side metrics will be hard to replicate. That sustains the imperative - Help U.S get its act together, fast. If US doesn’t survive, others won’t fare much better either. Do anything. Drive economies, value add, scale up, squeeze margins, innovate, sell cheap, offer free – help U.S.clients hold their heads above water. Relying on untested European market is like letting go the proverbial bird in hand seeing two in the bush. Europe is full of (not just linguistic) prejudices and isn’t as origin agnostic as the U.S is, and in between the time taken to schmooze and adapt, the fixed maintenance costs of your large scale build-outs will kill you. That would be a catastrophe. In comparison, fixing US recession before it fully arrives seems a song. It is for global economies to be mature enough to rally around the US and get it out of trouble, if they have to stay in shape themselves. My hope is built around that (self-centered) altruism that fits very well with a flat world. Some day one of us can ask Kris Gopalakrishnan’s cardiologist about how many heart beats he may have missed while putting a brave face like that up. I am sure he too hears about many fresh billion $$ write downs and CEO ejections as much as I do. All of these were kept off balance sheets (and investors) and the traffic is only getting busier. Bravo, Kris…. I go unless there is a competing market with the consumption levels close to that of US, world economies can’t put up with a moribund US markets for long. Every one feeds off it and it tastes nice. It’s impossible to conceive another market like that, not the least in IT services. Some day, others may achieve its size on the supply side(?), but demand side metrics will be hard to replicate. That sustains the imperative – Help U.S get its act together, fast. If US doesn’t survive, others won’t fare much better either.

Do anything. Drive economies, value add, scale up, squeeze margins, innovate, sell cheap, offer free – help U.S.clients hold their heads above water. Relying on untested European market is like letting go the proverbial bird in hand seeing two in the bush. Europe is full of (not just linguistic) prejudices and isn’t as origin agnostic as the U.S is, and in between the time taken to schmooze and adapt, the fixed maintenance costs of your large scale build-outs will kill you.

That would be a catastrophe. In comparison, fixing US recession before it fully arrives seems a song. It is for global economies to be mature enough to rally around the US and get it out of trouble, if they have to stay in shape themselves. My hope is built around that (self-centered) altruism that fits very well with a flat world.

Some day one of us can ask Kris Gopalakrishnan’s cardiologist about how many heart beats he may have missed while putting a brave face like that up. I am sure he too hears about many fresh billion $$ write downs and CEO ejections as much as I do. All of these were kept off balance sheets (and investors) and the traffic is only getting busier. Bravo, Kris….

]]> By: Basab http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/comment-page-1/#comment-9361 Basab Mon, 10 Dec 2007 00:02:03 +0000 http://6ampacific.com/2007/12/09/how-will-it-services-fare-in-the-coming-us-recession/#comment-9361 Shashi, your point is well taken. 3% of the global services market should not present any growth issues, in the long-term. But in the short-term you have a much larger base in existing revenue that will see downward pressure and a somewhat smaller available market to grow into to compensate for that. All I'm saying is it might be different this time around. Shashi, your point is well taken. 3% of the global services market should not present any growth issues, in the long-term. But in the short-term you have a much larger base in existing revenue that will see downward pressure and a somewhat smaller available market to grow into to compensate for that. All I’m saying is it might be different this time around.

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