Western IT giants ignored the Indians too long

I met up with Ashok Soota on Friday. He is the executive chairman of tier two Indian service provider MindTree.

I will write more about MindTree in due course because they are an interesting supplier.

But it was great talking to a man who was at top of the Indian IT industry way before they were famous. While Ashok Soota was the president of Wipro in the 80s and to late 90s, some of the senior executives of the big Indian players today were out in the field.

I enjoyed his story of how the Indian companies were able to rapidly get to where they are today.

It is a story of missed opportunities for the Western IT giants.

This is what he said:

“The suppliers in the West only started to feel threatened by us in 2000.”

But there were missed opportunities for the Western companies to keep more business for themselves.

“Before 1994 Western IT companies were not really noticing us because we were mainframe maintenance.”

“Then client/server came they thought we could not do it. But we were.”

“Then Y2K came along (millennium bug) and they thought we would go away afterwards. But Y2K gave Indian companies entry into big global companies.”

“Then they did not think internet work could be done offshore, because of the need for a quick turnaround. But distance can be an advantage because you can work around the clock.”

Obviously the internet played a role.

“The internet reduced transaction costs. Before this big players had dedicated pipelines. Now it became possible for a mid sized company to communicate with a mid sized company.”

“It was 2004 by the time the big Western suppliers became anxious.”

So what did they do? Well obviously they all moved to India.

The saying don’t underestimate your competitors springs to mind. But also from a customer perspective it shows that just because a supplier isn’t an enormous global brand does not mean they cannot equal or better the services of the IT outsourcing giants.