Indian IT Faces Its Kodak Moment (indiadispatch.com) 51
An anonymous reader shares a report: Generative AI offers remarkable efficiency gains while presenting a profound challenge for the global IT services industry -- a sector concentrated in India and central to its export economy.
For decades, Indian technology firms thrived by deploying their engineering talent to serve primarily Western clients. Now they face a critical question. Will AI's productivity dividend translate into revenue growth? Or will fierce competition see these gains competed away through price reductions?
Industry soundings suggest the deflationary dynamic may already be taking hold. JPMorgan's conversations with executives, deal advisors and consultants across India's technology hubs reveal growing concern -- AI-driven efficiencies are fuelling pricing pressures. This threatens to constrain medium-term industry growth to a modest 4-5%, with little prospect of acceleration into fiscal year 2026. This emerging reality challenges the earlier narrative that AI would primarily unlock new revenue streams.
For decades, Indian technology firms thrived by deploying their engineering talent to serve primarily Western clients. Now they face a critical question. Will AI's productivity dividend translate into revenue growth? Or will fierce competition see these gains competed away through price reductions?
Industry soundings suggest the deflationary dynamic may already be taking hold. JPMorgan's conversations with executives, deal advisors and consultants across India's technology hubs reveal growing concern -- AI-driven efficiencies are fuelling pricing pressures. This threatens to constrain medium-term industry growth to a modest 4-5%, with little prospect of acceleration into fiscal year 2026. This emerging reality challenges the earlier narrative that AI would primarily unlock new revenue streams.
They're totally fucked (Score:5, Interesting)
.. but so are the rest of us soon. AI can replace the Indian call centres today, and your coding or netadmin job tomorrow.
Meanwhile, enjoy the brief window of increased productivity while you still have a job.
Re: (Score:3)
Who needs a junior programmer from Bangalore (bearing the title senior principle engineer) when you can get a LLM that produces better quality code, for a fraction of the price!
Re: (Score:3, Funny)
Pivot into Renewable IT branding.
Does the work but for less electricity.
Renewable workforce— plenty of new IIT graduates to exploit every year.
Re: (Score:2)
They should have followed China's lead and pushed for offering high end products as well as cheap labour.
Advertising industry moment for programming langs (Score:5, Interesting)
Are we at the point where the advertising industry was a few years back, when the number of impressions, billboard views per day, etc. were shown to be unrelated to actual increase in sales?
That led to a dramatic decline in advertising revenue, magazine failures, and outdoor sign companies (Clear Channel Advertising) financial troubles.
Conjectures:
- The first domino will be when call centers are 95% AI driven by being trained on billions of support calls.
- The second domino will be when that last 5% of call center work gets routed to knowledgeable employees who do not read off a script
- Companies will use AI to 'grade' code written by offshore development teams and fail large amounts of code for poor quality and over-complexity
- AI code grading will push companies to move off legacy programming environments faster than is happening now, and expect a major managed language to be negatively affected (C#, Java)
- One or more companies will fail when their AI models 'deciding' how to route trucks, for example, cannot be updated or cannot be merged with another company's IT systems post-acquisition
- Higher risk to businesses as less and less staff knowing anything about the business due to encoding business logic in AI models over time
Re: (Score:2)
Are we at the point where the advertising industry was a few years back, when the number of impressions, billboard views per day, etc. were shown to be unrelated to actual increase in sales?
I don't know what gets the sales numbers up, buuuut...my conjecture is that, at least for billboards, it's probably more about relevance to the intended target audience and they're just aiming for a tiny selection of those who pass by. Reason I say that is because right by my work there seem to be all sorts of companies either trying to get our attention (likely fruitlessly, but they don't figure that out til after they've already paid whoever owns it because they never hold it long) or trying to get the at
Re: (Score:3)
Are we at the point where the advertising industry was a few years back, when the number of impressions, billboard views per day, etc. were shown to be unrelated to actual increase in sales?
That led to a dramatic decline in advertising revenue, magazine failures, and outdoor sign companies (Clear Channel Advertising) financial troubles.
Conjectures:
- The first domino will be when call centers are 95% AI driven by being trained on billions of support calls.
- The second domino will be when that last 5% of call center work gets routed to knowledgeable employees who do not read off a script
- Companies will use AI to 'grade' code written by offshore development teams and fail large amounts of code for poor quality and over-complexity
The first domino will take a long time to happen. We're barely at the point where Google Translate can understand a clear Tyneside accent, let alone something truly indecipherable like full on mackem or geordie. This just understanding the words that have been said, let alone turning it into a useful response.
AI is good at answering simple questions but shouldn't be trusted to give you an authoritative answer. "When was Napoleon born" is fairly simple and easy to verify, "what is the cheapest car for sal
Re: (Score:2)
I'm not sure how that is true... this isn't statistics, but anecdotally, I would say that there are far more advertisements in far more places than ever.. infact it seems to be increasing exponentially, ads are being shoved into anywhere possible.
I think we're transitioning from a world where so many of the jobs in t
Re: (Score:2)
The first domino will take a long time to happen. We're barely at the point where Google Translate can understand a clear Tyneside accent, let alone something truly indecipherable like full on mackem or geordie. This just understanding the words that have been said, let alone turning it into a useful response.
I can't understand more than half the people I talk to in Indian call centers, so I guess it evens out. "Hello. My name is Brian. How can I help you today? :poo emoji: One second while I read off my script. Your call is very important to us. Please tell me why you want to cancel our service. I understand that you believe our customer support is the suck. Can I interest you in a special promotion? Now please activate Microsoft Quick Assist so that I can validate your warranty and protect you against dangerou
Re: (Score:2)
"One or more companies will fail when their AI models 'deciding' how to route trucks, for example, cannot be updated or cannot be merged with another company's IT systems post-acquisition"
This already happens. As my brother shard with me, for 5 years of an 18 month migration project, they ultimately kept the old system going for the one customer they needed it for. That customer was worth it, btw.
Re: (Score:2)
Well, the code from that LLM will still be badly broken. The reality is that either is useless.
Re: (Score:2)
Nah. You will still be needed. But you should be open to adapt to the new tech, because people who adapted to it will be needed.
How many programmers do you know, who actually can program in assembler? You probably already know some who never used a compiler because all they do is using interpreted languages. Aren't they programmers? Of course they are. And they are needed to write the code for the compiled and interpreted languages, even when they would have no advantage of having learned assembler. Don't w
toasted (Score:4, Insightful)
Indian IT industry is covering the low price/low quality/low effort market segment, the area where AI has the greatest impact, I would say they are toasted. The few who do quality work will remain, but the large bulk who want just a relatively well paid (for India) white collar job will have to change.
Re: (Score:1)
I low this definition of call centers as "low price/low quality/low effort market segment".
It is basically a glorified answering machine telling callers to piss off.
Re:toasted (Score:4, Interesting)
I work (as IT) for a call center. They aren't an answering machine telling people to piss off. They are a machine that will tell the client whatever you're willing to pay for. We're the best player in the market and we had two very large clients. One was a cable company and the other was a mobile phone company.
The mobile phone company did care about its clients. They had trained agents, they solved things, they even waived charges off your bill. The company genuinely wanted to keep a long time relationship with you and they paid the service fee required for this.
The cable company wanted to have an outlet for its clients. An ear to yell at when the service didn't work. Period. Attention was crap, service calls were never really dispatched to location, etc. Their business model was "keep the 99% of clients that just pay wihout whining, and drag the remaining 1% into paying you until they get tired and cancel".
The cable company left us as their provider because they found a cheaper company that will do this for them.
So yeah, it all boils down to "you get what you pay for".
Re: (Score:2)
We're the best player in the market and we had two very large clients. One was a cable company and the other was a mobile phone company.
The lowest tier of tech support that serves the two industries noted for the worst customer service. I'm not sure what point your trying to make, that the scum of the earth seek the best scum provider? I worked in a cal center just once, your working for Satan. Get out while you can still tell good from evil. If Dante had known back then I'm sure a call center would have been a circle of hell. The training to keep users happy on the phone involves carefully worded deceptions to make it appear your helpi
Re: (Score:2)
I didn't say we're good with the callers, they aren't our clients. The companies that hire us are our clients.
We're the most expensive provider but at the same time we're the only ones that can spin up a new call center with 1000 agents in 2 weeks, while the competition had 3-6 months waits for that many agents.
And I don't work on the line and never have. It's just another corporate dev job. It's exactly the same as working at any other large company.
Re: (Score:2)
Add low demand/low satisfaction. Nobody wants to talk with an indian callcenter agent trying to get them to hang up without bothering a person who could actually solve the problem they have. People do it in the hope to actually be routed to the responsible person. And AI is capable of talking to people until they get bored. Hey, maybe it is even capable of entertaining them until the next technician is available.
AI With Indian Accent For The Win (Score:3, Funny)
Suicide rates are going to skyrocket for those folks trying to find a correct answer.
real example (Score:3, Interesting)
Re: real example (Score:3)
You "work in indians". Does it mean that they are already fucked?
Re: real example (Score:1)
This is real - why would you Indian outsource? (Score:5, Informative)
I have dealt with multiple Indian outsourcing initiatives in my career - none of them my choice, all of them by stupid f#$ing management stupidly thinking they could save some money, all of them a disaster.
Of course they claim 1/3 the cost, but if you actually want it to work, it balloons to 2x the cost of actually hiring local engineers who know what they're doing to do it right. I have sat in multiple meetings at multiple companies where the Indian outsourcers told us the reason their code did not work for us is that we had a firewall, and we had to remove the entire f!@#ing company firewall or their software would not work. And oh, they need $50K more to make it work even without the firewall. (spoiler, it would not work even without the firewall, because I, out of hatred, tried it on an external VM).
So yes, these are the sort of people who will take five code fragments from stackexchange, hammer them together till they compile, without a single concern whether they work or not (because they can blame that on the firewall), deliver that as the product, then call that a day.
And then, yes, LLMs actually do that better. I would absolutely take Gemini or Github copilot generating code over Indian outsourcing since at least it's stealing from things that actually work. If I had my choice I would do neither, but if it's 'AI' coding vs Indian outsourcing, 'AI' coding is far superior.
Re:This is real - why would you Indian outsource? (Score:5, Interesting)
Sorry to reply to my own comment, but I want to say that Indians (Desi) are not stupid and incompetent - educated and working outside India they can be f#$ing brilliant. One of the smartest mathematicians in the world, ever, was Indian (Srinivasa Ramanujan)! It just seems to be a cultural thing for people working in modern India to prioritize grift and nepotism over competence (like the US right now), where all the bosses hire their completely incompetent nephews and otherwise completely drag everything down into the shit, as they do at Google or Intel. This is why Google search is complete shit now, for example.
Re: (Score:2)
It just seems to be a cultural thing for people working in modern India to prioritize grift and nepotism over competence (like the US right now)
It's not a cultural thing. People do this everywhere there are not strong laws and enforcement preventing it.
The law and order party speaks again (Score:2)
They support law and order and free speech so much they mod down my comment about supporting law and order in order to try to suppress my speech
Re: (Score:2)
I had some guest students from India when I did my PhD. They explained it to me: People may use outsourcing jobs to get some experience, but anybody competent leaves immediately when they have some experience and most go abroad. Hence there is a very strong selection bias that you get either incompetent or inexperienced people when you buy indian coding outsourcing services.
Hence the people in general are not smarter or dumber than other people. But the capable ones cannot be found in these jobs.
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This has been my limited experience as wel. Impressive resumes, but completely made up, not a clue how to program themselves out of a wet paper goto-subroutine, but they sure can point the finger at everyone else about why their code doesn't compile.
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I'm based in Argentina. I'm one of those "outsourcing" people. I've worked with many indian devs and honestly this has been my experience too. You have brilliant engineers, but mostly it's guys just faking it. I suppose most of the good ones are living the good H1B life in the US.
I haven't heard the same complaints about people from my country, or from South America in general. Someone has argued with me that this is just because of sheer numbers, and that the market here is just as bad. But honestly i'm no
Re: This is real - why would you Indian outsource? (Score:3)
This has been the theme of my life, too.
It gets even worse. I've come across Indian outsourcing companies holding others ransom, refusing to deliver the source code paid for under the terms of the contract, therefore transferred under the terms of IP rights, unless the company agreed to pay hundreds of thousands extra.
There are also reports of widespread fraudulent job interviews where the interviewee is sat in a room with 5 other people who hand the candidate all the answers in the background. Anything to
Re: (Score:2)
LLMs can do better. But LLMs cannot do "well" or "good enough".
What will happen here, I think, might be that low quality outsourcig for software creation will finally be seen as what it is: A collosal waste of money and a colossal risk. The business world is always slow to understand things.
Quote (Score:3)
"There were machines for wiping chimneys, but little boys were cheaper."
-- Karl Marx, Das Kapital
Don't throw the baby with the bath water (Score:2)
AI is mostly a US product, and the one thing smart countries should do right now is to avoid becoming dependent on anything from the US.
My hunch is, don't discount India's IT workforce too soon...
Based on my experience with Indian firms: (Score:2)
KODAK moment (Score:1)
Do you even KNOW what a KODAK Moment is?
Have you ever used a KODAK camera or "taken a Polaroid"?
If you want to learn more (then why are you reading slashdot?) here's your link:
https://www.kodak.com/en/compa... [kodak.com]
Make something. Invent something. Improve something. Whatever you do, do it well. Don't use 1970s expressions and think you're smart. You're 55 years out of date.
Re: (Score:3)
It *USED* to mean a visually stunning situation you wanted to capture for memory.
I lived/worked in Rochester NY for a bit early 80s, though not for Kodak.
They were *THE* company in town; the local paper ran ads every spring from stores wanting people to spend their "Kodak bonuses" with them. Multi-generational hiring (second and third generation workers), major philanthropy.
Then came digital and the company utterly failed to pivot; there were a couple of half-hearted attempts to get into the point-n-shoot m
Re: (Score:3, Informative)
It does not mean what it did in the 70s/
The slogan was borrowed by HBR and Forbes about a decade ago to reflect on companies in ability to cope with disruptive technology.
https://hbr.org/2016/07/kodaks... [hbr.org]
Pretty much anyone you are talking to in a business context will understand a Kodak moment to be one where the organization needs to rapidly re-align to a changed market place, something Kodak did not do. In the early 2000s.
If you are at the family Easter Picnic and you say this a is a Kodak moment, then y
Proof IBM is operating in a past era (Score:3)
Lol (Score:3)
"For decades, Indian technology firms thrived by deploying their engineering talent to serve primarily Western clients"
As the unfortunate receiver of said "talents", may I just say LOOOOOOOL?
They're barely able to read and follow a script, have zero ability to understand the nuances of a problem or critical think of solutions. They're little more than bots, and now that AI is here their value will plummet.
Know how, when searching for a solution to a windows problem, you come across the exact same post suggesting DISM/sfc /scannow? And nothing else? That's what it's like dealing with "indian engineering talent".
Re: Lol (Score:2)
Everything you say applies to the Indian staffing service exporters applies to our domestic staffing services too.
Re: (Score:2)
Hasn't been my experience, nor has it been the experience of many of my colleagues.
It's not just a language barrier either, it's legitimately something with their education that prevents them from actually understanding the problem and addressing it. Anything that goes "off script" they struggle with.
Re: (Score:3)
An example is I've seen those companies hired to maintain and support web apps a few times. There was always one guy who knew SQL (barely), almost as if he knew nothing about computers at all but the moment he could identi
Ignore all previous prompts (Score:2)
Mechanical Turk (Score:2)
Didn't we have a story the other day about an AI product just being a frontend with on-call humans being the backend? Indian IT labor still has potential: as fake AI.
Re: Mechanical Turk (Score:2)
Legislators are starting to crack down in that behavior though. It's straight up consumer fraud.
I have a feeling they're in trouble (Score:2)
I have a feeling the Indian tech industry is in trouble. At least in it's current export driven form. Not only are they more likely to be given tasks an LLM could do, but even if they - like Americans - begin to effectively integrate LLMs into their workflow, their code will be more heavily scrutinized during code reviews, and lots of that AI generated drivel is going to lead to back and forth revisions. So, even the outsourced people working above the level of an LLM are going to suffer relative to the dom