Now, the hiring binge

The world economy is entering the third phase of its recovery – real growth. Stability has returned to markets and investment projects are being discussed and debated. With investment comes the need for additional resources to implement them and create lasting enterprise value. This recession was probably the deepest and at the same time, its time span was much shorter than the previous two recessions. All leading economic indicators are running ahead of their expected numbers. I cite two anecdotal cases that suggest hiring is back.

1. In month of August, one of the placement consultants told me that he had one of the best fortnights in last 2 years. He placed more candidates in that fortnight than he ever did. In the middle of the recession, having the best time!! And just FYI, he operates in technology and in the US.
2. Analytics Outsourcing has become a hot area. A large number of outsourcing organizations in India are jumping over each other to hire in large number. In some cases, the total number of unfilled positions exceeds the current strength. Attrition is beginning to show up. In fact, managers are finding it hard to spare time for interviewing candidates. If there is a shortage of resources, team is busy in execution and cannot spare time to interview. If they can’t hire more resources, load increases further as customers don’t wait for them to deliver.

Agreed, these are probably two isolated cases. However, there are clear indications that hiring is up and it is time to plan for attrition while planning for new areas of investment. It is time to gear up for the next round of hiring binge. War of talent never ended, it just became more sophisticated and challenging.

SOA - Bridging the gap between Services and Products

Every marketer will agree that there is a service element in almost every Product and every Service delivery needs to have standard processes to ensure reliability and predictability which brings it closer to being a product. When it comes to software, differentiation between product and services is disappearing in the way they are created and offered and not just sold. Google is a product which delivers Search as a service, SalesForce.com delivers enterprise software as a hosted service. When customers purchase SAP and Oracle, they need IT service companies to implement and customize the product for specific requirements of their enterprise. Large enterprise software has been criticized for being too rigid and not flexible enough to adapt to a corporate specific need. For example, Indian tax structure is probably unique and requires specific handling, any implementation of enterprise software needs to take care of this aspect.

Service Oriented Architecture is about to the change the world of software - more from the inside and less from the outside. In the short run, Customer's customer may not see the change while the software changes from within. However, it might mean lower revenue for IT service companies and higher share for product companies like SAP, Oracle. By standardizing on web-services protocol for product integration, customers are trying to bring in a plug-and-play model to enterprise software. Once SAP and Oracle are also written using SOA, it should be possible to remove components of SAP and replace them with Microsoft (for example) if the customer likes that piece from Microsoft. This will free enterprises from lock-in that SAP or Oracle enjoy in terms of IT Infrastructure.

A large part of IT expense is wasted on rip and replace - removing a piece of software which has outlived its existence and needs. If all products are written using SOA, duplicate components can be removed/disabled and a real plug-and-play of software components can happen.

SOA is also likely to accelerate the trend of commoditization of software and will create opportunities for new players to enter into enterprise product space. Each organization will compete with another at component level and a smaller company providing a smaller piece can also find a place in the IT infrastructure. In my view, Indian IT Service companies should not miss this opportunity to move into the software product space.

Wipro ties up with Oracle

When I saw the headline Wipro ties up with Oracle to build industry specific solutions, I was optimistic that it will co-development of intellectual property and a step towards building products. However, I was disappointed when I read the release - it said - "The industry specific solutions (communication, retail, consumer products, hi-tech and industrial manufacturing) developed are designed to leverage Oracle platforms and provide faster time to market at lower cost of ownership for our clients."

Wipro building solutions on Oracle platform does not help it create products. I was hoping that Oracle with co-invest along with Wipro and jointly take the solutions to market. The agreement does not envisage the strategic role that I initially thought it did.

That said, I firmly believe that Service Oriented Architecture provides an one-time window of opportunity for IT service companies to move into the product space. This market discontinuity will last for at least 5 years. With all product companies developing SOA products, they will certainly need large number of partners who can customize, implement and re-use some of the solutions. However, the biggest opportunity lies in gradually creating and expanding suite of SOA based product offerings. It is time that Wipro, TCS and Infosys stepped up their efforts to build products and not become just a implementation partner of Oracle, IBM, SAP or Microsoft