Americans beat Indians at their own game? BW got foot in the mouth!
August 29, 2007 10 Comments
BusinessWeek carried an article about IBM’s success in India, it’s ramping up of operations in India very quickly to 53,000 employees, and winning big in the IT outsourcing deals in the subcontinent, especially from telecom operators — which is a gratifying read. However, the email from BW in my inbox had a line that completely pissed me off:
IBM once looked like a lumbering giant next to India’s agile tech upstarts. But in scarcely five years, Big Blue has come to dominate the Indian market, with a staff of 53,000 in the country and huge R&D centers in Bangalore and New Delhi. Read this edition of the Asia Insider to learn how the Americans beat the Indians at their own game.
The article never said anything to that effect! My best guess is that some guy in the PR department at BW who was responsible for the uninteresting, mundane and morbidly boring task of sending out spam suddenly suffered from a bout of foot in the mouth.
First of all, I don’t think anybody has beaten anybody in this game of outsourcing. The money has come following the talent, and it’s not just IBM, but Accenture (India’s the second largest Accenture operations), EDS (which acquired Mphasis – here and here) and all other IT biggies are making bit bets on using Indian talent to fight Indian vendors like Infosys, Wipro and TCS who have been snapping at their heels. However, I am not sure if that can be termed a win of Indian talent or of the American business acumen. (Actually, I would not prefer an argument about winning and losing at all — since it is too early to predict anything — the Indian IT vendors who used to be mere outsourcing outfits earlier now want a larger piece of the pie, become consultants, and go after bigger money. For example read this, this, this — I didn’t try to get the best articles in the area, but just some of the recent news).
<!– Digression begins
Another interesting aspect, is the comparison of the Revenues, Profits, Market Capitalization and the Price/Earnings for some of the biggies. [‘b’ indiacates a billion US Dollars and ‘m’ a million US Dollars. Data taken from Google Finance today.]
|Company||Revenues||Profits||Market Cap||P/E Ratio|
It seems obvious that Indian companies are far more profitable than their western counterparts for every penny (or cent perhaps) of revenue that they make — and the markets reward them accordingly. If you look at the MCap column, you would realize why the biggies are unable to try their luck at acquiring some of the larger IT companies in India — because they are bigger than the western counterparts! (IBM of course, has many divisions, and it might be difficult to get data on their software services division). So much for winning and losing.
end digression –>
Until recently, I thought that foot-in-the-mouth was not a very communicable disease and spread only on contact with a creature named George Bush. I have, obviously, been proven wrong. Ronen Sen recently caught it, and now BW! Looks like its spreading faster than I imagined. Is somebody aware of necessary vaccination which I can take?