Is the Indian domestic market mature enough to attract IT biggies?

Off-late there's been a lot of talk of how the obsession of Indian IT companies with the western market is costing them business in times of recession. There are some who say that the Indian IT companies should have been more into the domestic market instead of eyeing the US for business. Some accuse the Indian IT companies of being anti-Indian. On a personal level, I feel that the sect which comes up with such opinion, either lacks knowledge about the industry or is simply too obsessed with nationalism.

Let me displace this hypothetical notion by providing an insight into the working of the IT Services sector. To begin with, similar to all other business domains, even the IT industry functions on the demand-supply model. However, what sets it apart from industries like manufacturing, FMCG, etc is that while most of the other domains look at the common public as their consumers, the IT service industry depends on an exclusive customer base as its earning potential. This exclusive customer base includes investment banks, eilte healthcare groups, automobile majors, telecom leaders, etc. In short, the elite corporations around the world.

Some would argue as to whether its necessary to go for such high-end customers instead of targeting the mid-range ones. Well, the answer is yes and absolutely yes and the reason is that these elite customers are the ones who desperately need to outsource their technology needs in order to cut down costs and bring in skilled labour. Moreover, only if an organization is large enough, it would think in terms of using technology in a big way in order streamline its core processes. This is where the the IT service companies with their attractive pricing model and unlimited skilled and cheap labour come into the picture. So the point is, where in India do we find these elite customers? How many investment banks actually exist in India? How many Indian automobile majors can claim to be amongst the biggest in the world? Where exactly do we find such customers if we target India? As per stats, only 6 of the global Fortune 500 companies are Indian. Just an SBI or a Reliance cannot ensure continous business to the IT services sector.

I can already see some fingers being pointed at me. There would be a few out there who would say that if the Indian IT companies can't find their market in the country then ain't they simply using national resources like manpower and land for their personal benefits. Well, I'm sure its a known fact that Indian IT companies provide employment to millions and millions of people out here. These days almost every single engineering graduate dreams of getting into an IT company and the reason is that not only does it provide a headstart to their career, its very much possibe to get through one of those. If we go by history, its the Indian IT sector that put India on the economic world map and changed the perception of India simply being a land of snake charmers.

For those who still feel that despite providing significant employment, the Indian IT companies are not doing much for the nation, well I'm sorry to say but there's a difference between NGOs and professionally run business corporations. It might sound a bit blunt and forthright but that's what the fact is. There are basically two stages of an evolving business organization. First, it needs to set its operating model in place and ensure a consistent inflow of revenue. Next, when it has established itself as a successful and stable business house, it can look forward to giving a part of it back to the society. This is something that we CSR (Corproate Social Responsibily). If I'm not wrong all the major IT biggies in India are focussing big time on CSR, be it by building schools and colleges for the underprevilledged or by doing welfare work in the lesser known parts of the country. Just beacause a particular company doesn't run a strong PR activity to highlight it social doings, it doesn't mean its ignoring its responsibilies towards the society.

On a brighter note, with India slowly but steadily gainig ground on the global economic scale and with Indian companies starting to get bigger day by day, the time many not be far when Indian IT companies can look for serious business within domestic shores. In fact most Indian IT companies, after having spotted a potenial domestic market, have already fastracked their domestic business consolidation policies. However, to be realistic, the Indian market is currently way too immature to be generating significant revenue for the IT biggies. Lets end this discussion on a positive note by hoping that India's economic upswing continues at a significant rate so that very soon we could have the majority of corporate domains looking inward for some serious business.