A part of my work profile is to meet with executives from small to medium sized software companies which are into providing software services to companies in the US, Europe and other developed nations. It is a joy to say that I have learnt a lot in this process - about running these companies, their positives and the problems faced by the respective management teams. Since my company Tekriti also has a profitable software services arm, I could connect even more with these positives and the problems. Without going into the listing of the above mentioned positives / problems in this post, I will first talk about my classification of these software services companies and their characteristics and touch upon the problems in a later post. It is important to understand the various tiers to be able to create different solutions for IT industry.

Tier 1 IT Outsourcing company - These are the big guys of IT outsourcing in India and responsible for putting India on the map when it comes to IT outsourcing. Infosys, TCS, Wipro, Polaris, Cognizant are a few and notable examples. But, overall, any IT outsourcing company which typically has more than 2500 people on their rolls is classified under this category. These guys have very strong processes, from generating and capturing sales leads to closing of leads, delivery and employee training and performance appraisals. From a client’s perspective, these companies make a very strong fit for somebody who needs process excellence more than the product excellence. Testing and maintenance projects are the best fit here.

Tier 2 IT Outsourcing company - These are typically the companies who have focused on 1-2 verticals and have developed strong expertise in these domains. They thrive mostly on the testing and maintenance projects from companies who find Tier 1 companies too big for their comfort and budget. Obviously, if your contribution to a company’s top-line is very insignificant, there are chances that you will not get the necessary attention that is required. Most of these companies will have some certification, whether it is in the CMM series or ISO series. These will typically be between 350 - 4000 people strong. They will also be interested in taking development work, as long as it is not too small.

Tier 3 IT Outsourcing company: This is where the companies really starts becoming a company. The size typically range from 75 to 500 and they rely on the individual brilliance of a handful of people rather than the processes. The company has figured out that to move to Tier 2, they need to have stronger processes. These companies thrive on the new product development projects and most OPD (outsourced product development) companies define their strategy when they were still in the Tier 3 classification. In the Indian market, there is a lot of technology talent in the companies in this tier - what they lack is the expertise in sales and marketing and bandwidth for project management. Only those companies who are operating in certain niche segments here (instead of doing everything), move from Tier 3 to Tier 2.

Tier 4 outsourcing company: These are either the entry level startups or your mom-and-pop shops. More than a company, this acts more as a partnership firm. Every founding member will be involved in active project delivery and the company has not even gotten a chance to think about the processes. They are struggling to find people, retain people and unless they move fast and reach a critical mass - they will either cease to exist or convert themselves to a mom-and-pop shop. They are good for projects where the client need certain number of people on retainer for some time.

A small graph representing the classification is shown below (you will notice that the membership of these tiered companies is fuzzy instead of being discrete).

Next on, I want to talk about where Tekriti currently is and also a few possible business opportunities in this sector.

If you believe that Robert Scoble is the most powerful geek blogger in the world, you will agree that having a popular blog will increase your ‘market value’ in a recruiter’s eyes beyond one’s imagination and will get you almost any job that you want. Not only Scoble, a lot of people / companies including Tekriti have immensely benefitted because of the blogs that they maintain.

But is there a flip side to it? I contributed my thoughts to a Financial Express article by Banasree Purkayastha which talks about the fairness of judging a prospective employee based on his / her blog or another online journal.

I think the article covers the subject very articulately. When I am hiring somebody, particularly a senior team-member, I do a quick google search on the person or read up few of his / her blog-posts (if there exists one) to know the mental make up of the person. I can live with a few incapabilities or technological short-comings in a person but the attitude is something which cannot be compromised. For one potentially brilliant guy who doesn’t have the right attitude, I will not let the company culture be affected. And the blog lets me get that information quite easily / accurately.

As I said in the article - the fact that a employer can find out about a prospective employee through his / her blog works well for both the parties. The advantages for an employer are pretty obvious. For an employee, it’s even better as they are likely to perform best in a place where they are hired after knowing that his / her mindset and of others in that company are aligned.

From the article:

More and more recruiters and employers are checking out the online profiles of potential candidates in a bid to filter out the ‘not-so-fitting’ employee. According to a recent survey by ExecuNet, an executive job search and recruiting network in the US, 35% of executive recruiters said they dropped a job candidate because of information uncovered online. That is up from 26% just one year ago. Another 77% of respondents said they use search engines to learn more about prospective employees. And the trend is making inroads in India too.

“I think blogs/online journals give a very good idea of a person. Blogosphere is built on the assumption that people, in general, are genuine and they write things that they really feel about, and the assumption is very valid. A blog tells us a lot many things about a person, like his mental setup, if he likes to work in a team or works better as an individual, etc. At times, it also gives information on anything fake the person might have written on the resume,” says Kumar.

Read the complete post here. I wrote a similar post at GoingOn and Syven made a good comment, which is copied below:

The recruitment industry isn’t today exactly the epitomy of perfection, but times change mindsets and what looks like an act of negligence today could transform ito wise cultural language tommorrow. It is true that the future is always looking backwards and I don’t want to paint bloggers as martyrs, but when a massive shift in public opinion occurs, recruiters will begin to hire those who show their hearts, rather than hide behind their glossy personal brand. Remember it was only 50 years ago a negro guy in America wasn’t allowed to use the same toilet as his white counterpart. Mindsets like that changes with experiences and time, don’t they?

Update: Chetan has a nice post on his views on the subject, which is opposite to mine. Though I don’t agree exactly (as noted in the comments on this post), he has some good points.

Something interesting, and unfortunate, that happened during Gnomedex 06 was the debate between Dave Winer and Blake Ross. It happened so that Blake was leading a discussion and talking about spreading software through grassroot means. By virtue of his association with Firefox, he mentioned how Firefox gained popularity and then showed a video - that was essentially mocking Internet Explorer.

At this - Dave stood up and said “I don’t care about what you think about Microsoft or IE - I would rather have you talk about future plans for Firefox and what are you doing for the users”. Blake mentioned that “this talk is not about Firefox”. Fair enough but seconds later, the discussion totally went into another direction with Blake mentioning that “You had written something against me at your blog sometime back and….” - and that was it.

I personally think that Blake should have stopped saying that the discussion was not about Firefox but the fact that he chose to use this forum to answer Dave was uncalled for. I don’t understand why even a small criticism or questioning of any Open Source Software is taken so seriously. Just because you are passionate for it and doing it for the love of it and benefitting a lot of others (and might not be making as much money (if any) as Microsoft or any other vendor with a proprietory product) - doesn’t mean that everybody else will be equally passionate and forgiving about that.

Software engineers build products and users use it not because they like the software vendor but because the product is more usable. Firefox is a great product and scores over IE6 - but I don’t see why will people not migrate over to IE again if IE7 indeed lives up to its promise (and Firefox doesn’t give enough reasons for people to stay with it). I, as a user, can empathize and appreciate with people creating open source software but that doesn’t mean that I will use it (or any other proprietory software, for that matter).

Read Blake’s post and Dave’s post on the same.

Tags: Gnomedex Gnomedex 6.0 Dave Winer Blake Ross

This is a live post of my impressions about Gnomedex 6.0 - straight from the Bell Harbor Conference Center.

I reached a bit late - mainly because I had to park the car a bit away from the venue.

1st session: Chris Pirillo - Opening remarks
I heard Chris the 2nd time - first one being at BloggerCon. Love the energy of this guy - good choice of the host. But the wi-fi is damn slow.

2nd session: Michael Arrington
It’s amazing to see a site being so popular in just a span of over 1 years - TechCrunch has become a must-read for anybody doing anything in the Web 2.0 space. Questions were raised on the business model of the various Web 2.0 companies - which was expected. Michael seems to think that there will be many micro-businesses coming up because of this space but there aren’t many that will become medium sized to big.

Damn! The wi-fi is so slow that I can hardly edit my posts. So - I will just go slow on live blogging unless I find something extremely interesting. Meanwhile - Senator John Edwards is on stage taking questions. There are a lot of people blogging live here.

Tags: Gnomedex Gnomedex 6.0

I was part of the group that participated in the group discussion on June 2nd that Dina Mehta referred to in her blog. The discussion was around our current communication habits and patterns, Skype usage and then thoughts on a new application that they demo’d. The application, in the current scope, is basically a plugin for Skype which adds a lot more features to the parent application and, essentially, tries to become your ‘personal assistant’.

I will resist the temptation of writing anything more about the application or the client (the company that Dina is helping out with the research) here as they are still in private alpha and it is not fair for me to write about something that might undergo a lot of changes in the coming months. And then my idea of writing this post is, anyways, not to talk about the application but thoughts around the importance of such group discussions and early feedback in the product development.

The group had 5 participants (a couple of business-men, a call-center employee and another software professional) and it was interesting to see the different perspective - some of which I could have never thought myself. I am not sure how much of the feedback will this team incorporate in the product but the exercise definitely helped me by emphasizing on the importance of early feedback in a product development - from a user’s perspective.

Early feedback and incorporating the feedback is always built into the schedule of most project (it also depends on the client, so it can’t be all) that we do at Tekriti. But engaging a professional like Dina to help you with the exercise means taking it to the next level. So, more than anything, I was excited because it helped me at my individual and my organization level.

And, yeah, did I say that I got a chance to meet and interact with Stuart Henshall of Skype Journal fame. That was another highlight, of course - particularly knowing that my thoughts on the future of the application (more than the application - I liked the concept behind it) was well aligned with his.

[Via Bernard] There is an interesting article at AlwaysOn by Dan’l Lewin from Microsoft on the subject Is India at the Tipping Point?

There are some very interesting quotes in the article, some of which are:

Mention India and most people think of outsourcing or offshoring. But it is much more than that today. In sector after sector, from business processes and models to technology, Indian entrepreneurs and companies are delivering breakthroughs in cost-performance. And it’s not just about labor cost arbitrage anymore; it is about disruptive innovation in technology and business models.

Another good one, from the same article:

India must move from renting IQ to creating its own intellectual property, and move from serving clients overseas to thinking about how it will leverage technology to improve its own large-scale societal problems. India must go beyond labor arbitrage to creating a real, sustainable innovation-based economy. It must move from innovation from India to innovating for India.

My take on the subject is very much similar to Dan’s. The primary reason for the boom in the Indian IT industry is undoubtedly outsourcing - and it has been discussed so many times before that it’s more than redundant for me to talk about the same.

I feel that India is moving in the exact same direction that Dan points out. And I believe that the logic applies not only to India but for any developing economy with a substantial lower cost of living than the developed countries. I feel that the move from ‘innovation from India’ to ‘innovating for India’ is trivial and will not even require extra effort. Let me present my case and elaborate it further.

It’s very natural for most of the people to do things that are easier - yet beneficial for us. Actually, it is in the other order - first it should be beneficial and profitable and then the tendency is for people to choose the shorter and the easiest route. And my claim is that it is much easier to start a software service company in India (note that I mentioned ’starting a software service company’ and not ‘running it’ - that is another discussion altogether), even now when the wages have increased a lot and there are already so many companies doing similar work. It is because of the availability of local talent, knowledge of English language, abundance of product companies in the US and Europe and the cost benefits that India has. So - it is very natural for Indian services companies to come up and fill the supply part of demand-supply chain.

To extend that further - let me go on saying that it’s easier in the US to create product companies - because of the returns associated, the availability of a broader and a more matured pool of investors, a more matured audience and the cost factor that makes it very unattractive for a startup to venture in the services space .

But now the situation in India is changing - the costs are increasing, there is a lot of competition in the services sector, the Indian audience has matured and are asking for new products and are ready to pay for it, there are lot more investors willing to spend in India - essentially making it much easier to create product startups targeting Indian market and increasingly the difficulties for services startups.

My bet is that the coming few years will see a lot more software startups - innovating for India - but will continue to provide services around not only their product but also in the space they specialize in. Jobs, Matrimonials, News and now Travel are the domains that is big with the software companies providing value in India - there is a scope for further innovation in a lot of areas including these four.

Nicolas Perrotta from OLX informed me about the free classifieds and auction site OLX.com. India is one of the first countries where they are launching the service.

Here are the details on the site.

To provide a better service we have decided to include:
· A city, neighborhood and zip code database so we can cover an entire country and not just pre-selected cities
· A distance field allowing you to see postings within a certain range of your zip code in the countries where it is possible
· Ability to post items in virtual worlds ( e.g.; SecondLife)
· Ability to comment on listings to create a stronger community
· Advanced search allowing searches at variable regional settings
· Auction and Buy It Now options and a rating system for the For Sale category
· Ability to post listings in any language in any country
· Ability to view the site in any country in any language
· Global reach
· Mobile version

I sent some questions to them and Alec Oxenford, the Co-Founder and Co-CEO of the company replies as:

FROM: NICOLAS PERROTTA - ALEC OXENFORD
TO: ASHISH KUMAR
**********************************************************

1. Why have you chosen India as one of the first countries to launch OLX? How did you guys do the survey of the Indian market ?
- India is big in terms of population, GDP and other relevant economic indicators.
- India grows fast.
- India is very technology prone.
- India is very close to other also attractive Asian markets.
To survey India we used:
- Public Sources (Internet, Google, Blogs)
- Market Research studies (JP MorganChase, etc)
- Interviews with other players

2. Have you guys tailored the site to suit the needs of people staying in India or do you plan to do that in future ?
OLX offers functionalities that exceed any competitive offer in India. We have decided to include several relevant features.

Already OLX offers (still a Beta)
• A city, neighborhood and zip code database so we can cover an entire country and not just pre-selected cities
• A distance field allowing you to see postings within a certain range of your zip code in the countries where it is possible
• Advanced search allowing searches at variable regional settings
• Auction and Buy It Now options and a rating system for the For Sale category
• Ability to post listings in any language in any country
• Ability to view the site in any country in any language
• Global reach

Soon OLX will offer.
• Ability to post items in virtual worlds (e.g.; SecondLife)
• Ability to comment on listings to create a stronger community
• Mobile Version

3. There are other popular Indian websites who also have their classifieds? How do you plan to compete against them ?
OLX offers unique product proposition, ‘a free local classified service on a global level’. A combination of a much better product with smart viral marketing, keyword advertising, affiliate management, word of mouth, partnerships with newspapers and portals, effective PR, mobile distribution, should allow us to get traction in enough locations to provide a great public service to our community of users.

4. Is there a revenue source other than advertisements ?
Currently OLX will be 100% free for users. OLX will only generate revenues via advertising sales.

Ian Landsman writes that the way to beat open source competitors is by increasing the price. He
says that money is not that important to many people. That goes with my belief that I mentioned in one of my old post, while I was talking about offshoring: If you are offshoring just for saving costs, you are only shooting yourself in the foot. Cost cut is really an attractive proposition but quality and domain expertise has to be considered before that.

I maintain that though it is important to work towards saving the costs, but it is foolish to do it at the cost of the product and its support infrastructure. After all, if one wants to create a multi-million dollar business or gain an equivalent productivity because of the technology / product, it’s perfectly fine to spend a bit on those technologies.

During the last Geek dinner, Rakesh Agarwal (CEO of Snapstream media) showed me the application Shozu which lets you do photoblogging and makes sending to Flickr very easy. He was clicking people and uploading the photos to his Flickr account instantaneously. That was cool - saves so much of effort in downloading the photos to the computer and then uploading it to Flickr / Buzznet!

Shozu’s homepage claims that they have 2 new great features: Recent comment activity viewed from your phone and backup of phone contacts. Didn’t we all read months back that there was another service which was letting you do the phone contacts backup thing only? Ah - I didn’t think it was important to bookmark it then if you build a service just around that. But if it’s just a feature, it’s worth checking out. I would have done that only if I had a more capable phone. But it’s a matter of time when I upgrade my phone!

Scoble has an article on the same here.

I had over 3000 items pending in my blog aggregator till yesterday out of which 1000 are still remaining. There are some good links that came out of the list that I am bookmarking here:

• Things people have accomplished by the age of 26: Shanti lists things that a few successful people had achieved by the time they were 26. This makes for an interesting read as well as gives me an opportunity to have my name entered in that list, only if we are able to take Tekriti to the next level
• Office Live domains spike: Small businesses are fast jumping on the opportunity to have Microsoft host Web sites for them under the week-old Office Live test service.
• Starbucks to pour 500000 free cups: I wonder if Barista in India will do that sometime. I am definitely in, if it happens!
• Ericsson buying Juniper: Oh no, Om Malik writes that Ericsson might buy Juniper Networks.
• India is 118th in latest FIFA world rankings: I was surfing the TV channels last night when this news flash came. I didn’t even think that the TV channel will even flash this news - I was just amused enough to mention it here.
• The greatest One day International match in the history of cricket was witnessed few days back: I was in the health club then and people stopped working out as they watched the match even though India was not involved. It can’t be bigger than this. Defeating Australia by breaking the just created world record is phenomenal. This point is worth a separate blog-post.
• My friend Paavani has started a blog: A student of design, she plans to write about design, products, craft, children & psychology. I personally think that she needs to spend a little more time and write up the ideas that she talks about. Keep an eye at her blog, there aren’t many who writes on those subjects.
• Microsoft claims world’s best search engine is on its way: Didn’t we all read a report that MSN and Yahoo search results are better than Google’s. It’s just the user experience that has given Google an edge.
• Atanu dey discusses Indian Economy with James Reese and Edward Hugh