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Sunday, July 18, 2004

Can china challenge India as a low-cost home for software development via NYTimes

It is clear today that India has the leadership, in terms of market share, for software development and outsourcing. The reason for that is that they had an early jump start. They began by being more Westernized and having more English speakers. A lot of guys who came over here from their institutes of technology and got trained here have now gone back. A lot of the start-ups during the Internet bubble were Indian, and a lot of the resources here in Silicon Valley were the holders of H-1B visas, who also transferred back after the bubble burst.Over the past couple of years, we've seen China really put the pressure on by bringing their skills sets up. They have the language barrier.Between the two cultures, there are some distinct differences. One is that we see more and more services going into India, the complete service, everything from consulting services to a full customer center where you have your phone systems set up with people answering them. It's all tied together. Having been established for a while, the Indians have a methodology and a process that's very familiar to those of us in the Western world. China hasn't really used that and is just now beginning to adopt it.India has processes and methodology from the 90's. It's old. China gets to look at all the mistakes of the Indian outsourcers and learn from them. And China gets to use the new technology that we and others have developed over the past year, but India is handicapped. China did the exact same thing with wireless technology. They were so far behind that they said: "We're not going to lay copper lines all over China. We're going to go wireless."So they are closing the gap. They will catch up. They are three to five years away. My take: Considering the size of the opportunity, advances made thus far and the dynamics of the industry - India should maintain leadership for next 10-15 years - But that requires very different mindset in investments, marketing, branding, superior infrastructure and more professionalism by Indian software company managements - India is there - but need to be more alert and responsive to emerging challenges. The current advances that Indian companies have is really substantial.I do not agree that chinese can challenge India in this space in the near future.

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