Earnings season is upon us, with Infosys Ltd beginning the cycle of announcements on 15 April for the fiscal fourth quarter. There will no doubt be plenty of analyses post-facto (to add to the numerous consensus estimates already published by equity analysts).

Most equity analysts think that Infosys will lead—tempered of course by the fact they have now set a lower bar for earnings performance expectations than ever before. Other IT majors have also pulled off this trick quite successfully over the past several quarters. Dalal Street, as a whole, now expects much lower earnings growth—in the 11-13% range—compared with the heady expectations of 27-28% just a few years ago. And lest we forget, this is despite the fact that the rupee has depreciated almost a further 10% this year.

While analysts—and investors—will comfort themselves by comparing these peers with one another and making investment choices that discriminate among these peers, there is a larger question at hand. And it is simply this: are the large Indian players now no different than their large non-Indian competitors like IBM and Accenture? And yes, let’s not forget the behemoths of a few years ago—HP, EDS (Electronic Data Systems Corp.), CSC (Computer Sciences Corp.) and ACS (Affiliated Computer Services Inc.)—whom the Indians replaced.

If the answer is yes, which I certainly believe it is, then we are in for an interesting ride over the next half-decade or so.

When I ran a region (Europe) wide P&L (profit and loss) for IBM in the late 1990s, my performance goals were set on attaining a pre-tax income number of 11%. I have to believe that my then peers at firms such as HP, EDS and CSC had similar targets to achieve. The 11-13% estimates we now see for Indian majors is eerily close to that number.

In the decade that followed, we witnessed quite a lot of carnage. Essentially, the drop in telecom prices—and the throwing up of walls (not literally as planned by Mr Trump—but effectively by using visa regimes) simply led to the work being moved to where the workers were, rather than flying the workers out to the work. Despite the recent proxy war of words by two industry titans about Indian firms having been “immigration agents", the truth remains that India’s IT industry would not have taken off as spectacularly as it did had it not been for all the dark fibre laid undersea in the 1995 to 1999 period by giants such as Cable & Wireless and AT&T.

This fiber was suddenly “lit" as the telecom industry, led by investment and technological change, rapidly increased available bandwidth. The fact that it remained dark for several years was simply a timing error in capacity planning. The telecom majors had bet that the “e-commerce" majors would flower sooner than they actually did. (Remember George Sheehan, the CEO of Accenture who quit to found WebVan, a grocery delivery e-commerce business?)

This fundamental shift, which led to a plethora of work being done from India rather than from the US or the UK, contributed significantly more to the rise of Indian IT than the alternate loosening and tightening of H1-B visa regulations.

At the time, IBM, HP, CSC et al were the champions, and Infosys, Wipro, TCS et al were at best contenders, in most cases ignored by the champions. Well, those that ignored that revolution simply don’t exist any more as large independent IT services business. And we stand today at the brink of history being repeated, this time with different contenders and incumbent champions. I believe the next half-decade will be less of a battle among the champions over cloud, digital and analytics, and more of a battle between the slow (read some of the champions) and the fast (read the long reviled “tier II").

The opportunity for the “tier II" firms to now eat their “tier I" competitor’s lunch is greater than ever. The information asymmetry long faced by firms looking to outsource their IT work has since died off, and clients are ever more sophisticated and willing to try upstart IT services players to build bespoke and well-engineered applications in areas such as the “Internet of Things" and in large-scale data analytics—while simultaneously migrating their hardware and its maintenance to the now well established cloud players like Amazon, Google and Microsoft, while today’s large IT services firms keep talking about security concerns and the need for “private clouds"—run, of course, by them—instead of Amazon et al.

Many of the large players want to recast themselves as “product" firms in digital and other spaces rather than continue as services players. Time will tell whether this transition actually happens, since existing cash cows are difficult to ignore. Just a few weeks ago, the strategy head of one of these majors told me at a social gathering that his firm really wasn’t too exercised by the cloud since, (a) not all their customers would move to it, and (b) of the remainder who would, most would move slowly, thereby giving his firm ample opportunity to keep milking its cash cow hardware “remote infrastructure maintenance" business.

Ominous words. Tier II firms—move, and move fast. Many of the big boys are asleep at the switch.

Siddharth Pai is a world-renowned technology consultant who has personally led over $20 billion in complex, first-of-a-kind outsourcing transactions.

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