Sabeer Bhatia, the founder of Hotmail said in a recent interview that Bangalore, the hub of the Indian IT industry is right now more of a Services Valley rather than a Silicon Valley because:
"I think the reason for this is that many of the large Indian companies
have not been entrepreneurial. Take all the big ones like TCS, Wipro
and Infosys- they are not entrepreneurial. They have stuck to a
business model, but they really haven’t innovated on that – they
haven’t created new products."
Similar comments have been made earlier by lesser names in India,
who think that the services and cheap labour model will not serve India
well in the long run. However in the current excitement of making big money, quick, innovation has taken a back seat.
Some small companies in India are actually doing better and more innovative work than the big ones. The reason being that the smaller companies can’t match the giants like Infosys, TCS and Wipro when it comes to delivering cheap yet quality services. So they have to innovate to survive.
The approach of the IT giants has so far been very disappointing. Not only have they not come out with any innovative products but they also are not making the noises required for innovation to thrive.
This is surely a cause for concern as the companies have recruited thousands of skilled people but don’t have much intellectual property (IP) to boast of.
What do you think? Will Indian IT survive and thrive with just the services model or is a serious rethink required?