Saturating IT Industry

The other day I was reading "India's IT Party is over. Reinvent yourself or suffer" by Ravi Venkatesan. He has touched upon some very interesting points.

The point on slower rise in incomes, slow hiring etc. I feel should also be looked at from another angle. Any new industry will typically have an initial high rise, high demand period and slowly in time it will saturate. About 40 years back, when the IT industry as an Industry started to pick up, it was like an ocean and anyone getting into it like a drop in the ocean. So there was plenty of demand but very less supply. Hence things moved fast for the initial players. They got good business, good rates, they rose very fast and expanded at a fast page. In nascent stage as the organization was growing, it needed more and more people, so ‘hiring’ was good. It needed more and more people to manage the growing work, so ‘promotions’ were good. Business was growing by leaps and bounds, so the ‘compensation hikes’ were great. It needed to put people onsite fast as there was demand and the laws weren’t that strict, so people got chance to go ‘onsite’ often and for long term. In time, the industry has got saturated and the law of diminishing returns applies.

With time, as the organizational seats get to fill up, and people don’t retire as fast, the hiring has to slow down. Many players have entered the space and hence the business has got divided. What seemed like an ocean earlier now seems like a small pond. With multiple worldwide slowdown years, every organization is tightening their spend and hence the prices are more controlled, even cut down in many instances and hence no way an organization can give hikes at the same rate.  

These are all signs of a mature industry. A century or so back when we had industrial revolution, many made their fortune in the initial years. In time however the industry saturated and the rates stabilized. The jobs were stable, pays were decent and while there were hikes, they weren’t double digit like the IT population got used, but would be typically hardly 4-5%. I recall when I had joined our IT industry about 20 years back, I had a small package, maybe about half what my father was earning in his Government job at that time. In just about 5 years, I was at par and in another 3-4 years I was earning almost double what he was earning. Those were the boom years. With saturation, things have slowed down and this is how the future is going to be. There will still be areas like possibly products where there is scope of non-linear revenue by way of licenses which may bring relatively faster growth, but then on the other side are mobile apps that bring bulk of the business today, but need to be offered for free for consumers to use it.

We often say for our IT industry that, change is the only constant. Today it is probably more relevant than ever. The technology landscape is changing so fast, that businesses are realizing that old strategies may not really work any longer, and we need to learn new skills to keep pace with changing world. Those who can do this will continue to remain relevant while others will fade out.


Ravi has also talked about different kinds of jobs people can look out for. This I feel is a very good point, but needs a basic change in mind set. Somehow for many of us Doctor, Engineer and now IT Professional are the jobs to crave for and anything else is looked down upon. If we start respecting every job and realize that job is finally at the heart of it, to make money to have a decent living, we probably will be able to leverage the many opportunities around us much better. At this time I cannot help but recollect a book I recently read "Screw It,Let's Do It" by Sir Richard Branson, where he talked about how he focused on having his goals and then work towards achieving them. It was never a debate on if this a good job or not. It was always how do I achieve it? 

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