Is Indian IT industry’s business model in danger?

Posted by jd
October 30, 2009

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Harsh asked in an email, “Is Indian IT industry’s business model in danger?”

While it maybe a somewhat rhetorical statement, all business models are in danger at any given point of time because there is always some company trying to figure out how to destroy a company’s or industry’s business model.

Having said that, in the near term (1-3 years) Indian IT sector business model is definitely going to be under pressure, because these companies have built their business around serving primarily the G-7 countries (there are some early signs of recovery but not strong enough to generate a lot of new business). In the long term, though, these companies are fairly well positioned because outsourcing is not going away (it outsourcing is going to become like manufacturing outsourcing to China); it might just face cost pressures.

Business strategy

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