Will it be the Web Services bellwether Google or Microsoft, IBM, HP, TCS, Infosys or a new entity we have not heard of as yet, that will breach the trillion dollar market capitalization mark? Will we have to wait till 2020 or will it be as early as 2015? Microsoft leads to race today as the world’s most valuable software technology firm with a market capitalization close to the $ 300 bn mark. Google has been the notional leader though, with its growth from the garage to $ 170 bn market cap within a decade. So will it be Google then?
Possibly, and possibly not. Google has rushed in to fill a void as a search engine pioneer and quickly grew into being a web services supermarket. It has you and me in its pocket. But does it have the rest of our known world, enterprise applications, infrastructure and the rest of the commercial software world eating out of its hands? Guess not, and but who are the leaders in this space? IBM, HP, Microsoft, TCS, Infosys, Accenture and their like. I will call them collectively as the “vendor” firms here.
I have theorized on this and I can say with a degree of confidence that the trillion Dollar Technology firm will execute significant hold on the consumer services as well the enterprise applications and technology markets. With organizations trying to evolve leaner means to succeed using technology as an enabler, providers will have to innovate and imbibe the global ethos completely. The Trillion Dollar organization will not be the so called “flat” organization of today, by its capability to execute from 30 different locations in the world. It will be truly global because, weaved into its 30 or more offices infrastructure will be a matrix based two dimensional or multi-dimensional excellence framework, across technologies, services, domains and functions, which will enable it to bring together a team across various geographies based on identified competencies to deliver on any project. It will not be like embedded work out of China, Software Engineering out of Ukraine and BPO put of India. This approach is not actually about going global, this is plain tactical and regional. It becomes strategic only when we can merge them into one seamless execution whole, leverage competencies from where they lie, and scale the model to a requisite size to deliver for a project.
With free float of all major currencies it is implicit that a correction will happen. Wage growth rates of companies that offshore will show a southward trend, while the same for vendor countries will see double digit growth annually. “Vendor” countries will see technology and infrastructure investments from “client” countries which will put an upward pressure on local currencies. Some of these inflows can be managed through macro economic policy making, but the days of nappy feeding technology exporters are far behind us. I will not extend this theory to conclude that outsourcing will stop. It will not. The “Vendor” countries will be the first movers still in the “level” playing field, because over the past 20 years of outsourcing they will have developed the scale and specialization to execute business out of any corner of the world qualitatively better and with a reasonable amount of value arbitrage. Enter then, the truly “Global Corporation”. By 2010, some major consolidation within the IT services niche will happen, and in-organic growth will see at the very least 2-3 IT “Vendor” firms breach the $ 250 bn cap mark.
Riding a parallel growth track will be companies like Microsoft, Google, Apple and a few others who will be doing great things with technology, wireless, web, robotics, bio analytics and generating newer revenue streams. Google and a few others will evolve newer ways of monetizing web assets that they have acquired judiciously over the years. Somewhere down the middle of this, the “vendor” firms, driven by growth pressures and shareholders will find themselves hurtling towards the technology leaders. The “quick on the feet” technology innovators will meet with the Globalization honchos. From the resulting big bang, one or perhaps two Trillion Dollar Megaliths will emerge, all encompassing, in your personal computer, phone, credit card, corporate networks and your grand child’s robot Barbie mate.
Interesting theory isn’t it? Meet me in 2020, and I will “I told you so” you.
This blog is also featured at http://mglunplugged.wordpress.com/
Possibly, and possibly not. Google has rushed in to fill a void as a search engine pioneer and quickly grew into being a web services supermarket. It has you and me in its pocket. But does it have the rest of our known world, enterprise applications, infrastructure and the rest of the commercial software world eating out of its hands? Guess not, and but who are the leaders in this space? IBM, HP, Microsoft, TCS, Infosys, Accenture and their like. I will call them collectively as the “vendor” firms here.
I have theorized on this and I can say with a degree of confidence that the trillion Dollar Technology firm will execute significant hold on the consumer services as well the enterprise applications and technology markets. With organizations trying to evolve leaner means to succeed using technology as an enabler, providers will have to innovate and imbibe the global ethos completely. The Trillion Dollar organization will not be the so called “flat” organization of today, by its capability to execute from 30 different locations in the world. It will be truly global because, weaved into its 30 or more offices infrastructure will be a matrix based two dimensional or multi-dimensional excellence framework, across technologies, services, domains and functions, which will enable it to bring together a team across various geographies based on identified competencies to deliver on any project. It will not be like embedded work out of China, Software Engineering out of Ukraine and BPO put of India. This approach is not actually about going global, this is plain tactical and regional. It becomes strategic only when we can merge them into one seamless execution whole, leverage competencies from where they lie, and scale the model to a requisite size to deliver for a project.
With free float of all major currencies it is implicit that a correction will happen. Wage growth rates of companies that offshore will show a southward trend, while the same for vendor countries will see double digit growth annually. “Vendor” countries will see technology and infrastructure investments from “client” countries which will put an upward pressure on local currencies. Some of these inflows can be managed through macro economic policy making, but the days of nappy feeding technology exporters are far behind us. I will not extend this theory to conclude that outsourcing will stop. It will not. The “Vendor” countries will be the first movers still in the “level” playing field, because over the past 20 years of outsourcing they will have developed the scale and specialization to execute business out of any corner of the world qualitatively better and with a reasonable amount of value arbitrage. Enter then, the truly “Global Corporation”. By 2010, some major consolidation within the IT services niche will happen, and in-organic growth will see at the very least 2-3 IT “Vendor” firms breach the $ 250 bn cap mark.
Riding a parallel growth track will be companies like Microsoft, Google, Apple and a few others who will be doing great things with technology, wireless, web, robotics, bio analytics and generating newer revenue streams. Google and a few others will evolve newer ways of monetizing web assets that they have acquired judiciously over the years. Somewhere down the middle of this, the “vendor” firms, driven by growth pressures and shareholders will find themselves hurtling towards the technology leaders. The “quick on the feet” technology innovators will meet with the Globalization honchos. From the resulting big bang, one or perhaps two Trillion Dollar Megaliths will emerge, all encompassing, in your personal computer, phone, credit card, corporate networks and your grand child’s robot Barbie mate.
Interesting theory isn’t it? Meet me in 2020, and I will “I told you so” you.
This blog is also featured at http://mglunplugged.wordpress.com/
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