Bangalore: Products vs. Services? Credit: Image credit: prasanthmj via Flickr
Outsourcing

Bangalore: Products vs. Services?

Bangalore and the IT outsourcing industry have been at the heart of the Indian economy for over a decade now. But as things finally begin to shake and falter, has the time arrived for innovation?  Kathryn Cave chats to Suchit Bachalli, Executive Vice President and Co-founder of Unilog Content Solutions, about Bangalore and the future of ICT.

“Bangalore is bursting at its seams,” Suchit Bachalli tells me over the phone. “It is half as liveable today as it was 10 years ago.” The housing is extremely expensive and “for those who can afford it; it is hard to ignore the fact you don’t have drinking water out of your tap, you don’t have 24/7 power and you step out of your house into a traffic jam – it takes an hour and a half to do 10 – 14 KM.”

Unilog is based in Mysor, which is about three hours further South because, as Bachalli explains, “it feels like the Bangalore of the 80s. [Now] the government and policy makers need to consider moving out of Bangalore. The infrastructure of the city cannot take it anymore.”  Yet Bachalli believes the problems with Bangalore run far deeper than simply overcrowding and congestion, they strike to the very heart of the ICT industry.

“The Indian IT industry is at an inflexion point,” says Bachalli. “I think that the model of providing job based services is in decline. That is my personal opinion and I’m sure there are other analysts who will disagree with me. But I believe it is [in] terminal [decline] because when the only value you offer is cost, systems are going to move to other locations where things are [even] cheaper and [even] better.”

The strain on the Indian outsourcing industry has been well documented.  Mike Magee concluded an article on Indian Outsourcing on this site back in June with the warning: “The fear is that at some point the drive to keep costs low will hit a brick wall, and in 10 years there will be nowhere left where labour is cheap, leaving eight billion people on the planet looking for work.” And it is true; there is a constant quest for ever cheaper destinations… which puts Indonesia and the Philippines high on many international companies’ hit lists and could leave many Indian organisations simply competing amongst themselves.

Bachalli thinks the real opportunity for Indian companies will to be to become innovative. “There are companies that are doing software development,” he says “but they are told what the solution is. Very few companies, in my opinion, are at the problem [solving] end of it and are actually designing solutions and implementing them worldwide. Yet many Indian companies are sitting on a goldmine of data.” This places them in an ideal position to offer truly unique solutions to unique business problems.

This loosely corresponds with a response to another piece on India we published at the start of July: “Personally, I think waning of outsourcing is good for local tech business. We have an army of experienced technologists and abundant technical manpower who will focus more on local tech if outsourcing companies stop hiring in large numbers. [The] easy life and good salary has prevented people from joining startups and taking risks. As outsourcing loses [its] sizzle, you can definitely expect more RedBus like success stories coming out.”

“I would like to see India considered as an innovator,” continues Bachalli. “The lack of innovation bothers [me]. Everyone seems to be very content with a desk job. In the west it’s the opposite fear. There the worry is that someone in India or China will take your job. But [I think Indians are] taking the wrong kinds of jobs.”

The change will necessarily be slow and based around mind set, but Bachalli is hopeful. “Yesterday I was at a conclave for Big Data in Bangalore. It was most heartening because [whilst] the average Indian’s reaction to any new technology is to [talk about] setting up a training institute… or [talk about] outsourcing services to the west. I did not hear any of that yesterday. The thought process yesterday was: this is a great technology, what are the applications we can build on it?”

“I was pleased to see that the whole conversation was about applications and what we can do with the technology rather than servicing people with what they want. I think that is a big shift in how we’re thinking. If that [thinking] gains popularity and momentum we’ll clearly have an edge.” However, he adds “[although] some companies are in a great position, they’ll need to change their organisation because running a product company goes against the grain of running a services company.”

Bachalli believes part of the overall problem is the way people are trained. “From a demographic perspective the average age is very low. The number of people coming on the job market [over the next couple of years] will be difficult to address short and mid-term.” It is easy to find a call centre person. But filling software development roles where people are required to think is a lot harder. In addition to which if people have been in a service job for five years, you almost have to retrain them to think analytically.  He is convinced a ‘rote education’ is partly to blame: “the vast majority of people entering the job market are essentially geared towards a service economy.”

“From an India perspective we’re doing ourselves a big disservice,” he continues. “I look around my house at the TV, fridge, microwave and fan and see these are all innovations which have come out of the west. How do we start building products and technology to reverse that flow of innovation? Those are the jobs we should be looking to take. We should be aiming for Mark Zuckerberg’s job not just call centre employees recording changes to flights…”

The real problem for India may well be highlighted in Bachalli’s descriptions of Bangalore. This is the Silicon Valley of India, it is an extremely expensive place to live, yet it still suffers from typical Indian problems.  The power situation for example is “better than other places - but it is still pretty bad.” And a lot of homes and businesses are run on private power fuelled by commercially available materials. This makes it extremely expensive and if the rupee continues to fall, and the cost of living continues to rise, it makes the situation on the ground all the more untenable. 

“Bangalore is not sustainable at this rate,” says Bachalli “It is hard enough for people who are already in the system, but what about today’s 14 year olds. I shudder to think what will happen when they get to be 24 and where Bangalore is going to be.” Bangalore does appear to be at a cross roads; the rupee is still falling; services are continuing to be outsourced to ever cheaper destinations. Maybe with India up against a solid brick wall the only thing for developers to do will be to innovate?

 

Kathryn Cave is Editor at IDG Connect

PREVIOUS ARTICLE

«The Growth in Mobile Malware

NEXT ARTICLE

Net Censorship: Indonesia Battling Online Pornography»
author_image
Kathryn Cave

Editor at IDG Connect

  • twt
  • twt
  • Mail

Comments

no-images

Thyagarajan on September 19 2013

I do not agree with the views. Bangalore is the best among the Indian cities.Yes the roads are not good enough but new bridges/flyovers are coming up all over the city to ease the traffic congestion. The Outer ring Road that houses most of the It companies is well served by AC Volvo buses. yes there is a shortage of Power supply but most of those working in these It companies are in the pay bracket of 6 - 25 lakhs and these people mostly live in Apartment complexes within a gated community. well equipped with the Power backups .

no-images

Sreenivas on September 20 2013

Come on Thyagarajan. Let's not get all that defensive about situation in B'lore. What Suchit says do ring true. We all wish the infra is in lot better shape and the living conditions are lot better. However, we are witnessing a growth of the city which the facilities are just not able to keep pace with. Nor are the folks in Govt addressing with any long-term focus. But with comments like this, we are digressing away from the main topic of the article – innovation. Moving from Services to Products is definitely a good thing. We are seeing this happen in small pockets, but still not enough. I feel it is a slow process – we need good designers, architects, product managers/marketing, VCs, – the whole ecosystem. Will take some time. We do need a mixture of services and products businesses to keep the economy going and meet the job aspirations of the engineers coming out of the colleges. The mobile industry has certainly provided a boost for thinking in terms of product development. I do hope that it will spur more interest in this line and we see some good work…

no-images

Dhamodharan k on September 21 2013

IT industry contributes only 7% to Indian economy, hence, it is not the backbone of Indian economy. Also, IT industry is not just Bangalore. Chennai, Pune, Delhi, Hyderabad has almost equal share as that of Bangalore. Indian economy is altogether a different ball game. Neither stock market nor IT industry can affect employment, trade so deeply. Because, people still lead their lives close to natural way of living. India's 70% of rural economy gives this immunity to its citizens. Also, we can not deny their living standard is far below any developed country. But, certainly, Bangalore is not India. It is only a tiny part of India.

no-images

Suchit Bachalli on September 26 2013

Thanks all for your comments. Both views are equally strong. A discussion that results in a call to action is most important.

no-images

Thyagarajan on September 19 2013

I do not agree with the views. Bangalore is the best among the Indian cities.Yes the roads are not good enough but new bridges/flyovers are coming up all over the city to ease the traffic congestion. The Outer ring Road that houses most of the It companies is well served by AC Volvo buses. yes there is a shortage of Power supply but most of those working in these It companies are in the pay bracket of 6 - 25 lakhs and these people mostly live in Apartment complexes within a gated community. well equipped with the Power backups .

no-images

Sreenivas on September 20 2013

Come on Thyagarajan. Let's not get all that defensive about situation in B'lore. What Suchit says do ring true. We all wish the infra is in lot better shape and the living conditions are lot better. However, we are witnessing a growth of the city which the facilities are just not able to keep pace with. Nor are the folks in Govt addressing with any long-term focus. But with comments like this, we are digressing away from the main topic of the article – innovation. Moving from Services to Products is definitely a good thing. We are seeing this happen in small pockets, but still not enough. I feel it is a slow process – we need good designers, architects, product managers/marketing, VCs, – the whole ecosystem. Will take some time. We do need a mixture of services and products businesses to keep the economy going and meet the job aspirations of the engineers coming out of the colleges. The mobile industry has certainly provided a boost for thinking in terms of product development. I do hope that it will spur more interest in this line and we see some good work…

no-images

Dhamodharan k on September 21 2013

IT industry contributes only 7% to Indian economy, hence, it is not the backbone of Indian economy. Also, IT industry is not just Bangalore. Chennai, Pune, Delhi, Hyderabad has almost equal share as that of Bangalore. Indian economy is altogether a different ball game. Neither stock market nor IT industry can affect employment, trade so deeply. Because, people still lead their lives close to natural way of living. India's 70% of rural economy gives this immunity to its citizens. Also, we can not deny their living standard is far below any developed country. But, certainly, Bangalore is not India. It is only a tiny part of India.

no-images

Suchit Bachalli on September 26 2013

Thanks all for your comments. Both views are equally strong. A discussion that results in a call to action is most important.

Add Your Comment

Most Recent Comments

Our Case Studies

IDG Connect delivers full creative solutions to meet all your demand generatlon needs. These cover the full scope of options, from customized content and lead delivery through to fully integrated campaigns.

images

Our Marketing Research

Our in-house analyst and editorial team create a range of insights for the global marketing community. These look at IT buying preferences, the latest soclal media trends and other zeitgeist topics.

images

Poll

Will Kotlin overtake Java as the most popular Android programming language in 2018?