A decade and seven years ago an Indian man hailing from the Indian capital enthralled the technology departments of global corporations with a ‘tale of a tempest’ many times more amplified and puffed up than the abundant crop of hair he sported. The latter was a wig while the former was mere bad science fiction gift-wrapped by consultants as a 600 billion dollar hair-raiser. However, Dewang Mehta, the chief lobbyist for India’s fledgling software services industry, successfully managed both with matchless self-confidence, convincing businesses that at the stroke of midnight of the novel millennium, their computer systems would crash as old programs measured years in ‘2’ digits instead of ‘4’. He persuaded them that the solution was to let a horde of techies from Hyderabad and Bangalore go through each line of code and fix the ‘Y2K’ bug.

1. Infosys, TCS results state the wrong in Indian IT sector
A decade and seven years
ago an Indian man hailing
from the Indian capital
enthralled the technology
departments of global
corporations with a ‘tale of a
tempest’ many times more
amplified and puffed up than
the abundant crop of hair he
sported. The latter was a wig
while the former was mere
bad science fiction gift-
wrapped by consultants as a
600 billion dollar hair-raiser.
However, Dewang Mehta, the chief lobbyist for India's fledgling software
services industry, successfully managed both with matchless self-confidence,
convincing businesses that at the stroke of midnight of the novel millennium,
their computer systems would crash as old programs measured years in ‘2’
digits instead of ‘4’. He persuaded them that the solution was to let a horde of
techies from Hyderabad and Bangalore go through each line of code and fix
the ‘Y2K’ bug.
Birth and death of India’s IT Sector:
That was the birth of our nation's magnificently successful software services
industry, which had its funeral on Friday after a short battle with novel digital
technologies. At the time when its funeral prayers were being offered, the
business was worth a 110 billion dollar in annual export revenue.
It was time to turn off the Ventilator:
The very first inkling that the end was near came on Thursday when TCS -
Tata Consultancy Services, the largest Indian software vendor by market
value, made an announcement of a virtual stalling of its business in the Q2 or
September quarter from the previous 3 months. And it was time to turn the

2. ventilator off when Infosys slashed its full-year revenue guidance for the
second time in 3 months.
A coroner’s Inquiry:
A coroner's inquiry uncovered three signs of decay, theD first of which
showed how Indian companies' cheap-talent-fuelled growth ran out of breath.
In the 4 quarters ahead of the collapse of Lehman Brothers, Infosys witnessed
a revenue increase of an average of 29% in constant-currency terms. Back
then, Accenture's growth was just half as high. However, there isn’t anything
exceptional about Indian companies' expansion anymore. All that the
investors have heard from managements this year is a depressing
commentary on how challenging it has become to get clients to open their
wallets. And the hilarious part is that nowadays companies only make it to the
newspapers for dodgy business practices, senior-level exits and regulatory
slaps on the wrist.
Old is not always Gold:
A slowdown alone would not have handcuffed the Indian industry if it had
been able to embrace social, mobile, analytics and cloud (smac) based
technologies. However, the vendors were too busy defending their legacy
business and thus failed to make a mark in the novel digital world.
A reliable data showed that the dominant trio of TCS, Infosys and Wipro
between them had 1.5 times more workers involved in digital stuff last year
than Accenture. However, the revenue they harvested was 40% less than what
the latter chalked up from novel technologies. That makes the typical digital-
tech employee of an Indian vendor 25% as efficient as his counterpart at the
global consultant. The clock is set back on Indian companies due to this gap
while it has taken years to narrow the productivity differential.
And the Mystery Continues…
Perhaps it's just banking clients and their inability to pay as they did once
upon a time. Or maybe it's a combination of feeble global growth,
protectionism, Brexit and Donald Trump's fickle stance on US visas for the

3. Indian technology workers. Hoping that ‘tempest’ is temporary, investors
continue to pay a hefty premium for future growth. They may be fortunate for
a while. However, a dead-cat bounce from delayed orders coming through
would barely count as proof of life.
Conclusion:
The millennium fright which got Indian software a foot in the door at global
corporations. However, now the shoe is on the other foot. Artificial
intelligence and robotics are putting the vendors' labour-intensive business at
risk. Even if the concern is as amplified as Y2K, with many growth candidates
in the Indian start-up world, atleast for some investors it may be time to back
novel horses rather than whip the dead ones.
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Article Written by
Salman Hashmi