A few months ago I had shared a post that it just didn’t make sense to build an Indian Big 4. The Big 4 had lost relevance. No purpose was served in emulating them.
It had also become clear that the IT services industry would need to pivot to a new business model. One that was built around value added reselling of products in areas like cybersecurity, blockchain and digital public infrastructure. But to do so, they had to invest in product development. It doesn’t make sense to sell products developed by Big Tech. The woes of the It industry are now in the open.
Infosys share price is at a 52 week low. And is way higher than what it should be in light of ai, Iran and failure of its product and consulting services ambitions. The only silver lining for Infosys is the sinking rupee. I expect the dollar to cross Rs 100 a lot sooner than most expect. I do wish I am wrong for all our sakes.
Infosys board is going to be looking for a new CEO. My iit peer Salil Parikh is a great leader but does not have product experience. Dr. Harrick Vin of TCS would be the kind of CEO they need, but will struggle to get. TCS is battling all kinds of issues including the cultural diversity challenge which they refuse to accept. Tech Mahindra imported a CEO from Infosys who hasn’t really been able to fit into my friend CP Gurnani shoes. Ever since they walked away from the data centre opportunity ten years ago – they haven’t found one. My IIT junior Amit Dixit with a USD 35 billion wallet is going to have a lot of consolidation opportunities. Whilst my iit peer Sharad Sanghi will survive because of deep pocketed partners:
Someone like a Tata or a L&T have zero chance of making it in semiconductors. It is a leadership issue. Building contractors can’t make chips or build data centres. Nor can a power company like Adani run neoclouds with some BigTech as partner. At the new rate at which technology is moving, companies can have buildings full of cash but if they don’t invest in r&d and technology development with a 360 degree approach – they have zero chance of making it. My iit senior subramanian sarma used to make huge sense pursuing USD 5 billion epc contracts in the Middle East. But that is all past tense.
For Tatas, semiconductors is the equivalent of a Hotel California ticket. It may help Chandrasekhar preserve his job for a while. But will such misdirected moves save the House of Tatas. Mathematics is not an opinion. India doesn’t make sense to set up a silicon fab compound semi yes. Diamond substrate yes. Silicon carbide maybe. Battery with a novel material. Yes. Lithium ion. No.
Solar foundries make sense because they are single product with adequate demand. But 5 nm chipsets just make you a meal ticket for the likes of Applied Materials. Just as ai ambitions take you to Nvidias den.
Suffice to say we are heading for a rejig like no other. The days of conglomerates with unrelated SBUs are over.