Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Software: The suitable boys - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Apr 6, 2001

    Software: The suitable boys

    The figures released by ITAA (Information Technology Association of America) have projected a demand for 0.9 m new technology workers in 2001, down approximately by 0.7 m (44%) compared to the figures for 2000. However, the talent gap still looms large. The shortfall of skilled workers is expected to be in the range of 0.4 m workers. The shortfall has dropped almost by 50%. These figures to a certain extent would make the Indian software community a bit happier. A lot of news about Indian engineers being benched has been doing the rounds recently.

    The message is quite clear it is the unskilled workers who have been at the receiving end. The tech slowdown in the US has severely affected those into the body shopping business. Most of these firms do not have strong brand names and therefore, are not able to attract quality talent. It is the lack of quality that is hurting these companies.

    Function Change in
    Programmer/software developer NA
    Enterprise information systems integrator 62%
    Database administrator/developer -59%
    Interactive digital media specialist -62%
    Web administrator -25%
    Technical writer -73%
    Network systems specialist 13%
    Computer systems support representative -65%
    Source: ITAA  
    Figures for programmers not available  

    Another very interesting point to note is the fact that the number of IT workers employed by non-IT companies is ten times more compared with IT companies. A lot of people leaving for the US are fresh graduates with only IT skill sets. Due to the lack of functional experience it is difficult for them to shift to non-IT companies. Therefore, we could be looking at a demand for people who have both technical and functional knowledge. This is supported by the fact that the demand for enterprise information systems integrators has gone up by 62%.

    According to ITAA, skilled technology workers are still a highly desirable commodity to IT and non-IT companies. What has changed is the hiring practice of these companies as the companies have become very cautious. This pressure has come undoubtedly from the customers, who are today asking a lot of questions. The scene has changed quite a bit from last year when people were willing to pay any price. The primary drivers for this change in attitude are, firstly the expectations from information technology have become more realistic and secondly with time even the clients have now a much better understanding of the industry and therefore the pricing. However, the simple fact that the 2001 numbers suggest is that hiring has by no means halted for IT workers, rather, demand still far exceeds supply in this market.

    The writing on the wall is very clear. Information technology as long as it services other businesses is not an end in itself but a means to an end. To quote Mr. Jerry Rao, Chairman Mphais BFL, “First of all, we are very very committed to understanding our client’s business strategy and we are committed to the revenue side of the clients P&L rather than the costs side. We do not go and position ourselves as someone who can reduce your development cost”. Most of the software companies are yet to realize this. The services business is not about cheap labour and about giving the client value for money. Those companies that have not realized this simple fact are going to face very tough times ahead as they find it difficult to explain their value proposition to the customers.



    Equitymaster requests your view! Post a comment on "Software: The suitable boys". Click here!


    More Views on News

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    Ankit Shah's First Five Insider Recommendations (The 5 Minute Wrapup)

    Aug 5, 2017

    How to get exclusive insider recommendations from Ankit Shah.

    TCS: Currency Volatility Plays Spoilsport (Quarterly Results Update - Detailed)

    Jul 14, 2017

    TCS starts FY18 decently despite an adverse currency impact.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE IT

    Aug 16, 2017 (Close)