The headlines were swift and brutal in their pronouncements. On the day when Infosys announced its latest quarterly numbers, analysts and commentariat were quick to write the obituary of the Indian IT industry. The results were tepid and, more importantly, lowered annual guidance for the second time.
However, to paraphrase Mark Twain, reports of the industry's death are greatly exaggerated.
The story is by now familiar to most of us. For a decade and a half, starting in the late 1990s, Indian IT could do no wrong. From a mere $5 billion in exports in 1999/2000, last year Indian IT companies did $110 billion in exports. Like clockwork, quarter-on-quarter, the industry reported double-digit growth rates. In the process, it created billions of dollars in wealth and white-collar employment for millions.
For a number of reasons, including its much-storied founders' middle-class origins, Infosys caught the imagination of the nation and became the poster child for the sector. For a while the company walked on water, before shifts in the technology landscape, hungrier competitors and nepotistic tendencies of co-promoters taking turns at the top job in the company - among other factors - dented its vaunted reputation.
A little over two years ago, the company appointed its first outsider and non-promoter, Vishal Sikka, as CEO to boost growth. While it is early days, things seem to be looking up. For the first time in five years, Infosys grew at a faster pace than India's largest IT services company, TCS, though admittedly on a lower base.
While the avuncular Sikka, who is based in California, prefers to wear a round neck T-shirt and a jacket for his public appearances and flits in and out of India, the backend operations are run by a soft-spoken, buttoned-up three-decade veteran of the company, U. B. Pravin Rao. He pooh-poohs all talk of demise of the industry. "(IT) industry has been going through a structural change and this has been happening for the past couple of years. Pace of change has been faster than all of us have been able to reinvent ourselves. Having said that, it is premature to say that the IT industry is dead or dying," he says.
Rao, COO of Infosys, emphasises that of the 10 largest IT services companies globally, six of them are Indian. "Historically, if you look back, Indian IT industry has always reinvented itself from the time of Y2K to the dotcom boom and the subsequent (dotcom) bust to package implementation to various other challenges over the years. We are living in interesting times but I am confident that Indian IT will continue to stay relevant, " he adds.