Your observation is correct. I attribute this to many reasons:

1. Indian companies are not genetically wired to take advantage of retained IP. There is no mgt focus on it. There isn’t enough deep domain to know how to assess the market opportunity for it.
2. The teams that negotiate the deal are so focused on thwarting a competitor and getting an acceptable bill rate, that they don’t want to add another wrinkle to the negotiations.
3. Offshore outsourcing began with the biggest global companies like GE. These companies will never give away IP. Perhaps, it has conditioned Indian companies to ‘Work for Hire’. They know no other way.

Had a question, I manage a lot of IT services vendor relationships for my company, including one of the IT Majors. Now, when we get these IT services companies to build software solutions for us, we have never received a request on ownership/IP. Is this a new trend and how does this model work? Would appreciate your response.

Thanks!

thanks for pointing out the missing links. I think I have them right now.

The IP imperatives, I think are the same for smaller services startups, if not more important. Focus needs to be sharper since you have fewer resources.

Can you comment on what opportunities may exist for companies starting from the ground up in this environment.
btw, Some of the links to your prev posts (here) are not linked !! Can you fix it up ?

Multi-tenant SaaS might be a good idea for a product company (or rather they had better, or have their lunch eaten!). But it is too far from the comfort zone of an IT Services company.

The ‘big three’ of Indian IT average at over $4 billion. But with 100K employees each, the earning per employee averages $40K/employee. Five years ago, revenues averaged at $800-850mil with about 20K employees. [Earning/ employee the same magical $40K/employee]

On the surface, global ‘competitors” in the services space seem to be faring better Accenture with about $23 B and 170K employees can show about $136K and EDS (22B, 139K) about $156K. However the fuzzy math here may be because these are not pure-play offshoring firms and hence comparing revenues streams may be like comparing apples and oranges (?)… and not really manpower-vs-solutions.

Whether the 20% growth (for offshoring firms) comes from adding another 20% (staff) per year or “moving up the value chain” is anyone’s guess.

R&D expenses should cease to look like rounding errors in IT company balance sheets.

Now that IBM,Accenture and EDS are in our own backyard, learn the art of snatching meals from under one’s nose!