Three stages of Indian software industry

Indian Software industry has evolved through three distinct phases:

• Cost arbitrage
• Internet arbitrage
• Talent arbitrage

In the first wave, Indian companies sold cheap extra hands to US companies looking to fix Y2K bugs. It was crazy how fast computer coaching centers popped up everywhere. You had a job if you held an Aptech certificate, a flight ticket to the US if you could type faster than your colleagues, and an upgraded seat if you wore a tie and pronounced the letter “r” rolling your tongue.

As a result of rich dollars and the possibility of even more dollars, businessmen invested heavily in Internet infrastructure and demanded even more from the government. Every global company started offshore development center in India. If you wrote a hello world program in Java, you got a job as a developer; if you knew how to debug someone’s hello world program you became a senior developer. Products were designed elsewhere, we developed and delivered from here.

In the last two and half decades, Indians have developed, marketed, and sold every conceivable idea for others. The talent mafia in India is astonishing. Whether it is coding, UX, or marketing, there is no better talent than Indians. There are more unicorn startups in India than anywhere else.

Companies are still playing the cost arbitrage game. While they scramble for pennies, those engaged in talent arbitrage make mega profits.

Why is this important? If you are looking for a job or you are thinking of switching job it is important to find out if the company is playing the game of cost arbitrage or talent arbitrage.