The past weeks, both IBM and TCS announced layoffs. I read an interesting analysis on the site of the Everest group:
One of the paragraphs that triggered my interest:
Both companies recognize that they don’t have enough of the new skills needed for the new digital services markets and both have too much talent in the skills that made them leaders in infrastructure and labor arbitrage – services segments that are now diminishing as customers switch to digital services and new consumption-based models.
The past years, I see even the bigger enterprises move towards off the shelf (cloud) solutions. Oftentimes, these solutions are built by smaller, specialized teams. A decade ago, you needed SAP to run your business. Today, you might need 5-10 small cloud applications to run your business.
Another thing occurring is the fast change in the solutions landscape. New tools pop up every day and it’s hard to keep up. A decade ago SAP it was. Today, we need to monitor the new applications market carefully if we don’t want to be outcompeted.
The market will move away from dinosaurs. They might survive since they have the size and capital to service big enterprises. But a big part of the market will be taken by smaller, specialized firms. Firms that built a certain cloud product, supported by services (that might also be provided by other third party specialists).
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