16PGP078 SIPReport

Mapping the IT Industry
For the period of 2017 - 2022
Submitted By
Deep Ray
IIM Raipur (2016 2018)
Industry Research
Mapping the IT Industry

For the period of 2017 - 2022
By:
Deep Ray
Under the Guidance of
Industry Mentor: Faculty Mentor

Mr. Balaji Aiyer, Prof. M Kannadhasan
Deputy Head, Associate Professor
Mapletree India Management Services Pvt Ltd Finance
IIM Raipur
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Indian Institute of Management Raipur
Acknowledgement
The euphoria and satiation that come along the successful completion of the
summer internship project would be incomplete without the mention of the
people who made it possible. I would like to take the opportunity to thank and
express my deep sense of gratitude to my corporate mentor Mr. Balaji Aiyer and
my faculty mentor Prof. M Kannadhasan. I am greatly indebted to both of them
for providing their valuable guidance at all stages of the study, their advice,
constructive suggestions, positive and supportive attitude and continuous
encouragement, without which it would have not been possible to complete the
project.
I owe my wholehearted thanks and appreciation to all my colleagues at the
company for their cooperation and assistance during the course of my project.
I hope that I can build upon the experience and knowledge that I have gained and
make a valuable contribution towards this industry in coming future.
Deep Ray
16PGP078
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Abstract
Indias vibrant economy has led to the boom of many industries; in particular, the
IT and IT enabled (ITES) services sectors. As the IT and ITE services industries
undergoes various reforms and new regulations, this project essentially aims to
understand the overall outlook of the Indian IT industry its opportunity and risk.
Considering India, where more than 50% of Grade A office occupancy lies with
the IT& BPM industry and US as the major importer of IT services of India (62%
share). The recent changes is bound to have a major impact over the course of
the next 5 years. Maple tree is essentially a real estate company, which majorly
deals with building office spaces in India. The company is currently looking to
expand in the other IT hubs like pune etc. where the market is seeking to pick up
in the next 5 years. This project aims to understand the current scenario and
future opportunities and risk of the IT industry through the existing workforce.
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Company Background
Mapletree is a leading real estate development, investment and capital
management company headquartered in Singapore.
Mapletree is focused on delivering value to its stakeholders through its business
model that maximizes capital efficiency. In executing a business strategy that
combines the roles of real estate development, investment and capital
management, Mapletree has generated consistently good returns to its
stakeholders, and established a track record for building award-winning
development projects across various real estate classes.
As at 31 December 2016, Mapletree owns and manages S$38.6 billion of office,
retail, logistics, industrial, residential, corporate housing and serviced apartment,
and student housing properties. Presently, Mapletree manages four Singapore-
listed real estate investment trusts (REITs) and six private real estate funds, which
hold a diverse portfolio of assets in Asia Pacific, the United Kingdom (UK) and the
United States (US). The Group has also established an extensive network of offices
in Singapore, Australia, China, Hong Kong SAR, India, Japan, Malaysia, South
Korea, the UK, the US and Vietnam.
Mapletrees portfolio includes award-winning properties in Singapore such as
Vivo City, Mapletree Business City and Tata Communications Exchange, as well as
mixed-use developments in the region such as Mapletree Business City Shanghai
and Vivo City Shanghai, and Nanhai Business City in China.
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Brief outlook of various operations (or products/services) in the
company
Mapletree currently manages four listed real estate investment trusts (REIT) and
five private equity real estate funds and owns a diverse portfolio of assets in
Singapore, Asia Pacific, Europe and the United States.
A Real Estate Investment Trust (REIT), is a company that owns or finances income-
producing real estate. REITs is an investment vehicle for real estate that is
comparable to a mutual fund, allowing both small & Large Investor to acquire
ownership. REITs provide investors of all types regular income streams,
diversification and long-term capital appreciation. REITs typically pay out all of
their taxable income as dividends to shareholders or have to payout a minimum
of 90% of their income as dividend. In turn, the shareholders pay the income
taxes on those dividends.
REITs allows anyone to invest in properties the same way they invest in any other
industries, through the purchase of stock from IPO or stock exchanges. In the
same way shareholders benefit by owning stocks in other corporations, the
stockholders of a REIT earn a share of the income produced through real estate
investment without actually having to go out and buy or finance property.
Most REITs are traded on major stock exchanges, but there are also public non-
listed and private REITs. The two main types of REITs are Equity
REITs and Mortgage REITs. Equity REITs generate income through the collection of
rent on, and from sales of, the properties they own for the long-term. Mortgage
REITs invest in mortgages or mortgage securities tied to commercial and/or
residential properties.
Today, REITs are related to almost all the aspects of an economy, including
apartments, hospitals, hotels, industrial facilities, infrastructure, nursing homes,
offices, shopping malls, storage centers and student housing. U.S. REITs have
become a model for REITs around the world, and now more than 35
countries around the world have adopted REIT legislation.
Weighted Average Lease Expiry

It is a metric used to measure a property portfolio risk of going vacant. This is
measure used by REIT to measure the risk of a property going vacant.
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Tenants Occupancy Area Lease Expiry
A 10% 5 years
B 70% 6 years
C 20% 3 years
WALE =0.10*5+0.7*6+0.20*3 5.3 years
Mapletree currently holds 49% stake in Oakwood Asia Pacific and the joint
venture is aimed to focus on acquiring and developing corporate and serviced
apartment assets within Asia, Europe and North America.
Mapletree's strategic focus is to invest in markets and real estate sectors with a
good growth potential. The Group has currently established various offices in
Singapore, China, Hong Kong, India, Japan, Malaysia, South Korea, Vietnam,
Australia and the UK to support its global expansion. Mapletrees award-winning
property portfolio includes projects in Singapore such as the VivoCity and
Mapletree Business City as well as mixed-use developments in the region such as
Mapletree Business City Shanghai and VivoCity Shanghai, and Nanhai Business
City in China.
In India, Mapletree currently it has established a 13 acres Business park to cater
to offices of various Software and product based companies such as Linkedin,
Tangoe, LSI etc. It provides office spaces for the purpose of leasing through
various contracts. It is looking to expand its business in different tier 1 cities like
Pune, Chennai, and Noida etc.
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Contents
1. Introduction .................................................................................................................................. 9
1.1 Overview of the real estate industry ............................................................................................ 10
1.2 Recent changes in the IT industry ................................................................................................. 12
1.2.1 Impact on India .......................................................................................................................... 12
1.3 SWOT Analysis............................................................................................................................... 14
1.4 Porter Five forces .......................................................................................................................... 15
1.5 PESTEL Analysis ............................................................................................................................. 16
2. Research Design & Methodology .................................................................................................... 17
2.1 Objectives...................................................................................................................................... 17
2.3 Problem Statement ....................................................................................................................... 17
3. Findings of the research .................................................................................................................. 19
3.1 Majority of the Workforce to be allocated to R & D ..................................................................... 20
3.2 More than 72 % employees estimate says 50 % engineers and more work for their firm .......... 21
3.3 Product Maintenance Coding continues to hold the bread & butter for the IT companies...... 22
3.4 USA is undoubtedly the major client for IT services generated from India .................................. 23
3.5 Maximum Subsidiaries in the US .................................................................................................. 24
3.6 Application Solution Software & System Integration are the two most important types of
projects emerging out of services undertaken ................................................................................... 24
3.7 No real dependency on a particular segment of the life cycle ..................................................... 25
3.8 Contracts mostly through own Initiatives for the Companies ...................................................... 26
3.9 Maximum prime contractship....................................................................................................... 27
3.10 Offshore dependency.................................................................................................................. 27
3.11 Competition within India & US ................................................................................................... 28
3.12 Problems of plenty ...................................................................................................................... 29
3.13 Emerging trends in IT .................................................................................................................. 30
3.14 Majority of employees dependent on the companies to take training initiatives ..................... 31
3.15 On-site opportunity to gone with the restriction imposed on H1-B Visa ................................... 32
3.16 Freeze on hiring .......................................................................................................................... 33
4. Conclusion ....................................................................................................................................... 33
5. Recommendations .......................................................................................................................... 35
Appendix 1 .......................................................................................................................................... 36
Appendix 2 .......................................................................................................................................... 38
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1. Introduction
The commercial real estate in India in the last 3 years saw an immense growth as
the net absorption in the top 8 cities consistently crossed the 30 million square
feet mark. This can be attributed to Indias Consistent and accelerated economic
performance resulting from strong government spending, increasing economic
activity & improving investor confidence. In the last few years, economic growth
of India has been better than most global economies, which has been pushing the
increase in demand for office space leasing, with both International and domestic
occupiers increasing their presence. Besides increasing their presence in India,
global companies in India have also been focusing on relocation to newer
workplace options that are replete with modern facilities and offer opportunities
to consolidate and create better operations & cost efficiencies.
The IT BPM sector which accounted for 65 to 70% share in commercial office
leasing activity in the Top Indian cities until a few years ago, has lost some of its
sheen because of severe global challenges and transitions inside the industry,
though it still maintains a maximum share of over 50%.
The commercial realty market is greatly influenced by a range of external and
internal factors. In an evolving market, models & markets keep altering. The
economy, investors & tenants are the key stakeholders for any developer and any
change in the way of working of these stakeholder has a huge impact on the
functioning of the Industry. With the recent trends we can clearly foresee 3 major
forces disrupting the industry Changes in economic policies of major economies
(i.e. US, Australia, New Zealand etc), Changing Investment Scenario & shift
towards flexible working with greater number of millennials coming into the fray.
Looking ahead into 2017 & beyond, leasing growth could be impacted as the
occupiers adopt a cautious expansion strategy. This is because of uncertainty in
global markets due to changes in US immigration policies, a slowdown in the
Chinese economy & recent automation increasing efficiency and reducing
headcount in the IT industry. According to the Cushman & Wakefield research
forecasts that as per current trends, the average increase in the commercial real
estate will be around 40 to 45 million square feet per year till 2020, whilst the
average occupancy of this space will be around 32 to 35 million square feet.
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1.1 Overview of the real estate industry
In India, real estate is the second largest employer after agriculture and is stated
to grow at 30 per cent over the next decade. The real estate sector comprises
four sub divisions for example housing, retail, hospitality, and commercial. The
growth of this sector is well complemented by the growth of the corporate
environment and the demand for office space as well as urban and semi-urban
accommodations. The construction industry ranks third among the 14 major
sectors in terms of direct, indirect and induced effects in all sectors of the
economy.
It is also expected that this sector will incur more non-resident Indian (NRI)
investments in both the short term and the long term. Bengaluru is expected to
be the most favored property investment destination for NRIs, followed by
Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
Market Size
The Indian real estate market is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the country's Gross Domestic
Product (GDP).
In the period FY2008-2020, the market size of this sector is expected to increase
at a Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality
and commercial real estate are also growing significantly, providing the much-
needed infrastructure for India's growing needs.
Fig no. 1 shows the occupancy vs stock (Source: Cushman & Wakefield report)
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The private equity investments in real estate increased 26 per cent to a nine-year
high of nearly Rs 40,000 crore (US$ 6.01 billion) in 2016.
Sectors such as IT and ITes, retail, consulting and e-commerce have registered
high demand for office space in recent times. The office space absorption in 2016
across the top eight cities amounted to 34 million square feet (msf) with
Bengaluru recording the highest net absorption during the year. Information
Technology and Business Process Management sector led the total leasing table
with 52 per cent of total space uptake in 2016. Mumbai is the best city in India for
commercial real estate investment, with returns of 12-19 per cent likely in the
next five years, followed by Bengaluru and Delhi-National Capital Region (NCR).
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1.2 Recent changes in the IT industry
1. Protectionist policies by the US, Australia & Singapore
Tightening the Immigration system and crack down on the H1B visa regime has
been the core of Trump administrations economic policy. New drafts has the
following changes:
Double the minimum wage for the H1B workers from $60,000 to $130,000
per year
Reserve 20% of the H1B visas allocated annually for firms that have 50 or
fewer employees.
Impose 35 % tax on companies that outsource jobs & do not create jobs in
the US
Deny Default H1B for computer programmers.
2. Brexit
Great Britains exist from the European Union has also created a sense of
uncertainty in the global economy. The market has been watchful towards any
recent developments.
3. Trends of Automation in the IT industry

Workforce recalibrations in Indian IT have been driven by the mix of potential
movement changes, expanding robortisation and edge weight. Late wage climb
postponement and workforce justification has been supported by plenteous
ability supply and need to reskill given the business move towards more up to
date innovations. Quick business dangers are constrained, with the capacity to
reskill workforce and adapt item/stage business being the key difficulties.
1.2.1 Impact on India

Until now, shortage of STEM workers and availability of workers at
competitive wages in IT BPM sector in India led to Indian companies
hiring in India and sending them to the USD on work Visa. Companies
often hired engineering graduates in India, provided them training on the
job, with a view to send them on-shore, a few years later.
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If the law on H1B Visas is passed, not only will Indian IT companies have to
increase wages, but also set up local hiring from American universities. An
increase in minimum wages, as well as hiring local talent will lead to higher
wage bill for Indian companies, which will directly impact their margins.
The bill is expected to increase the number of US nationals on Indian IT
companies workforce in the US. Increased hiring in the US could mean
that companies could slow down hiring in India, directly impacting leasing
activity for office space to some extent in the medium term.
The curb on the H1 B Visas by default for computer programmers are
typically for the entry level jobs.
Severe penalty of higher tax on companies that outsource activities and do
not create jobs in the US.
Impact of US Policies Relevance Impact
IT Sector Over 62% of the Indian IT Pressure on margins
BPO exports are Limited availability of
absorbed by US (Source: required talent in US
Cushman & Wakefield) Reduced cost
competitiveness
Expenditure on
automation can
increase for both US
& Indian companies
Manufacturing Sector Impact on Make in 1. Higher Tax on
India campaign outsourcing, directly
impacting revenues
Real Estate 50-55% of the leasing 2. Indirect Impact, as
activity is generated the ongoing projects
from the IT sector of may take a hug toll,
which 30% is directly by as freeze in the hiring
U.S Based companies in the major
(Source: Cushman & companies will stall
Wakefield) the plans for
expansions.
Table No.1 Impact on US policies
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1.3 SWOT Analysis
Strengths
Low wage structure
Cost competitiveness
Quality is the hallmark of Indian IT software and services
Strong base of engineers (i.e. students passing out of IITs & NITs)
Good Mathematical & logical expertise to improve ITes Processes.
Capability of handling large projects
Weakness
Lack of high end development skill
Employees not able to comprehend English language while dealing international
clients
Shortage of skilled labourers
lack of Government Support
High Employee attrition
Opportunities
High quality IT education market
India s well developed soft infrastructure
Leverage the current market situation to venture into services more around Big data
analytics, cloud computing and Artificial intellegence etc
Threats
Increase in cost due to the recent changes of the H1B Immigration policies, which
will compel Indian IT companies to hire engineers from US univeristies.
The industry may go through rounds of retrenchment and attrition combined, as the
services provied are mostly of low strategic importance.
The Indian IT companies may lay off large number of employees with recent trends
of automation.
Short supply of fully skilled labour will be a problem in procuring high end
development project in the future.
Fig No.2 SWOT Analysis of Indian IT industry
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1.4 Porter Five forces
Bargaining Power of Buyers : HIGH

The Switching cost of the purchasers or the customer is low considering the way that there
is part of organizations offering IT benefits over the world. Clients are sensitive towards
the cost, however, IT products and services are important to the accomplishment of
business, so they will spend a lot of funds to procure a decent product or service.
Bargaining Power of Suppliers : MODERATE

New organizations may think that its hard to enter this industry as a provider
in view of the current connections between current providers and IT firms. IT
firms are critical to providers since they are their essential clients, yet
providers (i.e AMD, Intel) are a great deal more reliant on IT firms.
Rivalry Among Existing Players : HIGH

There is huge rivalry among the large organizations in this industry. They
fundamentally take advantage from economies of scale, which is
significant and something they make a decent attempt not to lose.
Threat from Substitutes : LOW

There is no true substitutes in the IT services or products. We live in a
computerized age, so we depend on IT to maintain our lives and
organizations.
Threat of New Entrants : LOW

The IT industry isn't overly attractive, but it is routine and profitable enough that a lot of
people try and enter it. Many new firms try to enter this industry, but they rarely give
established names a real run for their money.
Fig No.3 Porter five force framework for IT industry
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1.5 PESTEL Analysis
Indian political system is very stable. India is the world's largest democratic nation, where elections are held
democratically every five years. All political parties strongly believe in democracy
Indian government maintains good relations with all major powers and power blocs of the world. However with the
new protectionism policy imposed by the US, India seems to be loosing out on the jobs outsourced from US.
Political
Global recession, Increasing working pay, competition from the other IT companies an increased contract fee are a
number of factors that impact the IT sector. Currency fluctuation and devaluation has affected the Industry greatly
during the recession time and now in the times of new restriction of H1B visas.
Automation has been able to reduce the headcount, however with help of layoffs and attrition in the Industry.
Economical
Being the largest democratic & secular nation with rich diversity and strong establishment of institution such as IIT
& NITs makes it an attracting nation.
Also, English is accepted as medium of communication which makes it easy to hire and provide them jobs which
involve handling international clients.
Social
India offers lowest Tariffs in the world. Today, India has the second largest telephone network after china offering
data services offering 4G network, enterprise services, WI-MAX abd VPN have become the in-thing.
Technological
Environmental convservation and protection is an issue that has been causing alot buzz and it has gained
prominence with time. Deteriorating environmental balance has been threatening the sustainability of life and
nature. IT sector has also been affected by floods, earthquake, cyclone & Tsunami.
Environmental
India has come up with great acts that have made it easy for the IT Sector to develop on. It has become easy for IT
companiesto carry out electronic using legal infrastructure made possible by the legal aspects and policies IT act
2000.
Legal
Fig No.4 Porter five force framework for IT industry
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2. Research Design & Methodology
2.1 Objectives
To understand the overall growth opportunities and risk associated with the IT
industry for the next five years.
2.2Scope of the Project
1. This study would be covering the data collected through various employees
across various hierarchies in IT industry; it will be limited to their opinion
about the industrial outlook.
2. This study will help in determining further expansion for the company and
also whether it needs to explore other clients across different domains such
as BFSI, FMCG, and Manufacturing etc.
3. This Study will help in benchmarking the approximate percentage of
services dedicated to various frames of software development.
4. This study will help in understanding the dependency of the Indian IT
industry and were it can leverage to gain competitive advantage in the
world market.
2.3Problem Statement
The key problems, which are identified, are:
1. Protectionist policies from the US, Australia and Singapore
2. Change in the industry trends, due to increase in Automation.
3. Lack of skills of Indian IT engineers as compared to global standards
4. Lack of high-end development and planning skills to take up highly strategic
value projects.
To identities which of the above issues are affecting the businesses of the IT
companies.
2.4Project Process
This internship project demanded me to physically meet the employees across
various IT companies to understand the IT services they provide and how the
recent developments will affect the employability in their respective companies.
This knowledge helped me in developing a survey, which would provide me a
framework to develop a larger understanding from the employees.
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2.5Sample Design
A Sample Design is a definite plan for obtaining a sample from a given population.
It refers to the technique to the procedure adopted in selecting items for the
sampling designs are as below:
2.5.1 Sample Size

83 IT professionals have participated in the Survey
2.5.2 Sampling Frame
IT Professionals from the various domains from the industry were requested to fill
the survey. They were approached
2.5.3 Sampling Method
Simple Random sampling has been done.
2.6Data Collection Procedure
This is a primary research and the Data was collected through questionnaire
which was floated online via social media platforms such as Twitter, Linkedin,
Reddit etc
2.7Benefits of the project to the company and the intern

To the Company
Mapletree is a real estate company which looking to expand its operations in
India. Indian A grade office spaces are majorly occupied by IT companies and the
future of these companies will determine, whether they should hold off in their
expansion plans or they look at different set of clients across other industries.
To the Intern
As there is a gap between classroom learning and real world applications, this
project would act as a bridge between the two. Intern currently has no experience
in IT and real estate before taking up this internship. This live assignment is an
opportunity for intern to understand the services provided by the firms and
where does the dependency of the IT industry lie from prospective of India as a
country. Guidance from mentors and other industry professionals during the
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internship period would prepare intern to work in challenging corporate
environment.
3. Findings of the research

Out of 83 respondents who were part of the survey, 55% of them were developer
& tester along with 15% Team lead and 15% others (i.e. primarily consultants&
system analyst). The research was participated by experts across various IT
companies like Infosys, TCS & wipro etc. The Survey was designed in such a way,
that it was required to understand to IT sector in a broad way : 1) How is an IT
company structured, 2) What is the kind of project they undertake, 3) Who is the
end user of these services & where are they located, 4) What is the type of
project that the companies undertook for their most important client and to
understand the relationship for the same and finally 5) to check the current
situation of the H1B visa workers and impact on the future of Immigration of
Indian Engineers to the US.
Major findings from the research:
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3.1 Majority of the Workforce to be allocated to R & D
25
2018 - R & D
20 2019 - R & D
2020 - R & D
15 2018 - Sales & Marketing

2019 - Sales & Marketing
10 2020 - Sales & Marketing

2018 - Onsite
5 2019 - Onsite
2020 - Onsite
0 2018 - offshore
2018 - Others
2019 - Others
2020 - Others
2018 - R & D
2019 - R & D
2020 - R & D
2018 - Onsite
2019 - Onsite
2020 - Onsite
2018 - offshore
2019 - offshore
2020 - offshore
2018 - Administrative & Finance

2018 - Maintenance & Support services
2019 - offshore
2020 - offshore
Fig No.5 shows the projected allocation of the workforce across the firm for a given period
As per the Reponses from the individuals, we can clearly interpret that the focus
of the companies will be more towards R&D, as it continues to occupy 20% of the
workforce for the companies, whereas the employees continue to see a dip in the
professional services both onshore and offshore. As the industry sees a constant
up gradation and efficiency in the process through automation. Respondents feel
the workforce requirement for the traditional software services to go down post
new reforms which are imposed on the H1B visas. If we refer to the figure No.5we
see that India which is known for its support services in terms of IT/ITes is
destined to down by 5 percent.
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3.2 More than 72 % employees estimate says 50 % engineers and more work for
their firm
Fig No.6shows the ratio of Engineer vs Non Engineers
Field Minimum Maximum Mean Std Variance Count

Deviation
Technical certificate in software 0.00 100.00 44.11 29.66 879.67 76
from a private or National
institute
Technical degree from a 0.00 100.00 52.46 27.52 757.12 78
university
Technical diploma in software 0.00 100.00 45.88 30.24 914.43 75
Others 0.00 100.00 33.80 27.36 748.71 65
Table No. Shows the distribution of the Non engineer employees with degrees
/diplomas/certificates
As per 72 % of respondents they believe more than 50 % of employees in their

organization have engineering degrees and rest who doesnt possess one have a
degree from private or national university or have a diploma in software.
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3.3 Product Maintenance Coding continues to hold the bread & butter for the
IT companies
Trends of software development activities

20
18
16
14
12
10
0
1
2018 - Product architecture 2019 - Product architecture 2020 - Product architecture

2018 - New product design 2019 - New product design 2020 - New product design
2018 - Enhancement/ New Service coding 2019 - Enhancement/ New Service coding 2020 - Enhancement/ New Service coding
2018 - Product maintenance coding 2019 - Product maintenance coding 2020 - Product maintenance coding
2018 - Enhancement/ New Service Testing 2019 - Enhancement/ New Service Testing 2020 - Enhancement/ New Service Testing
2018 - Product maintenance testing 2019 - Product maintenance testing 2020 - Product maintenance testing
2018 - Project management 2019 - Project management 2020 - Project management
2018 - Other please specify 2019 - Other please specify 2020 - Other please specify
Fig No.7shows the % of workforce to be allocated for various software development activities
Although there was a constant debate on how Indian IT holds a low strategic
importance as compared to the global IT solutions business, we can still observe
that coding stands out to be one of the core dependency according to these
employees. They feel even with a new trends emerging in the sector in terms of
automation and Protectionism policy wont impact the bread & butter of the IT
companies. Not surprisingly we clearly see a clear trend of enhancement & testing
following the similar features in the companies. One of the areas which seems to
be coming up is the project management activities. IT project management
includes overseeing projects for software development, hardware installations,
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network upgrades, cloud computing and virtualization rollouts, business analytics
and data management projects and implementing IT services. This is one of the
upcoming and high strategic business which the industry is looking at currently.
3.4 USA is undoubtedly the major client for IT services generated from India
Fig No.8shows the countries/regions where the IT services are exported
When we tried understanding the dependency of outsourcing activities. We can

clearly see US & Europe emerging as the favorite consumer of these outsourced
services. We also see a trend that its not only US or Europe. Now there seems to
emerge new consumers of these outsourced services that is Japan and a few
other south East Asian countries.
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3.5 Maximum Subsidiaries in the US
Fig No.9 shows the countries were the company has setup a subsidiary
With US emerging as the country with maximum subsidiary established by the IT

companies, It shows the true dominancy of the US as the biggest consumer of
Indian IT services. It shows us that the clients of these companies are based out of
the US due to which they have established their subsidiaries close to them. These
companies are bound to be impacted with the new regulations and will have to
find strategies to counter the effect at the minimum excess cost.
3.6 Application Solution Software & System Integration are the two most
important types of projects emerging out of services undertaken
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Fig No.10 shows the nature of the project undertaken by the companies for their most
important client
As per the respondents, the nature of the project undertaken in the last 12
months for the most important clients has been application solution software
with 66.67% and system integration with 53.62%. These two types of projects
have emerged as the most important services which seems to be outsourced in
the last 12 months. Every company nowadays requires IT services to reduce
manual work and increase efficiency, i.e. onboarding a particular investment bank
to a payment platform to reduce the dependency of manual payment and
reducing errors of incorrect bank instructions. Also, not to the surprise that
system testing seems to be the second most outsourced as the application which
are developed needs to be tested in an integrated hardware and software
environment to verify the behavior of the complete system. This shows both the
project go hand in hand when it comes developing an application based software
solution.
3.7 No real dependency on a particular segment of the life cycle
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Fig No.11shows activities comprising life cycle of software development
From the point of the respondents, we can interpret that there seems to be no
unique dependency on a particular part of the software development lifecycle as
far as the Indian IT companies are concerned. All most all the aspect of the
lifecycle are covered, so we can also interpret that Indian IT companies are
capable to handling end to end software development which is positive sign for
the industry. This essentially addresses the question of skill set of handling the
software development process, which seems to be intact.
3.8 Contracts mostly through own Initiatives for the Companies
Fig No.12shows how the contracts originate for the IT companies
37.68 % of the respondents say this particular project got originated through
companies own dedicated Marketing team who ensured to procure the project.
This essentially reiterates that fact that it is essential to recruit sales graduates
from the B schools who may or may not have an engineering degree but who can
help procure contracts and make the brand visible to eyes of the buyers. As noted
previously 73% respondent confirmed to having more than 50% workforce as
engineers and rest being non engineers. It is also observed that contracts are also
originating through customers initiative and through opening bidding process.
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This shows the companies are not depending on one source for procuring their
business and diversity in terms of contract procurements give these IT companies
a sense of security against the risk of depending on a particular source.
3.9 Maximum prime contractship
Fig No.13 Shows the distribution of contractship
Respondents have confirmed that 84% of their companies are working on these
projects as prime contractors, which shows that India has truly evolved as an IT
services SME in the world.
3.10 Offshore dependency
Fig No.14shows how the projects are executed
Not surprisingly we clearly see that 63.15 % of these projected are executed from
India (offshore) and 36.85 % is executed from onshore. This clearly shows the
dependency of the IT services on India. India has been in the forefront of
outsourcing since the time of the BPO units opening their offices and continuing
the trend now with services in IT.
27
3.11 Competition within India & US
Fig No.15shows region/places where the primary competitors are located
Almost 77% of the respondents confirmed that their competitors are located in
the home country itself. This is clearly indicative of the fact that Indian as well as
foreign IT companies are trying to leverage the Cost advantage of developing
software in India. India is closely followed by US, with 71% of the respondents
confirming that the United States is another region were their competitors are
located. US is known to provide services on high strategic projects, which helps
them to differentiate as a region and showcase their state of the art technological
expertise.
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3.12 Problems of plenty
Fig No.16 Shows problems that the company face as of today from the employees prospective
Employee attrition seems to be the main concern for the IT companies, as 53% of
the respondents have given more importance which even above issue related to
H-1B visas. This shows that there is a certain sense of insecurity been created by
the recent trends, as the employees are looking to either trying to switch their
roles to different sector or getting trained and trying to apply for a job which is
not related to IT. On the other hand, there are almost 43% of the respondents
who also feel employees lack skill set to carry out the job and almost 44% think
that reskilling them will be a big challenge. This shows that employees feel
29
unskilled to carry out their job and due to which employer doesnt find option but
to lay off.
3.13 Emerging trends in IT
Fig No.17 Shows the next big thing for Indian IT industry to look forward to
With an increased penetration of affordable devices, combined with cloud

computing, analytics and rising consumer expectations is driving the rapid growth
of the IOT market. IOT has been gaining significant traction amongst consumers
and businesses. For businesses, this disruptive technology is also opening up new
revenue streams. While consumer IOT is driven by volume, industrial IOT is driven
by value. The internet of things is real, and its a real part of the cloud. The key
challenge is how we can get data to be processed from so many devices. Cisco
Systems predicts that cloud traffic is likely to rise nearly fourfold by 2020,
increasing 3.9 zettabytes (ZB) per year in 2015 to 14.1ZB per year by 2020.
As a result, we could have the cloud computing perfect storm from the growth of
IoT. After all, IoT is about processing device-generated data that is meaningful,
and cloud computing is about using data from centralized computing and storage.
Growth rates of both can easily become unmanageable. This is reason for the
combined response as almost 50% of the respondents believe all of these will be
growing in the next few years.
30
3.14 Majority of employees dependent on the companies to take training
initiatives
Fig No.18 Shows the future course of action with industry looking forward to automate its
processes
With 38% of the employees believing that their employers will take training
initiatives to onboard them into futuristic process like Bigdata, Hadloop, cloud
computing etc seems to be a very optimistic at their end and can treated as a risk.
Also, there is almost 27% of employees who think they will rather depend on
themselves to update their skill, shows there is a trend mixed reactions from the
employees. There is also another 20.25 % of the employees who feel they would
like change their Job and look for different profile and industry. Hence, there is a
clear sign of uncertainty which is prevailing in the market.
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3.15 On-site opportunity to gone with the restriction imposed on H1-B Visa
Fig No.19shows expectation in terms of On-site Opportunities
There seems to be really dip in the on-site opportunity, as the majority (63%) of
employees feel the chances of them or their colleagues going abroad is really
32
grim. As due to new regulation put in by the Trump administration on H-1 B visas
seems to have clearly effected more of IT companies. Employee have mixed
response in terms of future as the news on H1-B was not implemented.
3.16 Freeze on hiring
Fig No.20shows the number of people hired by the companies
As the industry looks uncertain, there seems to be clear freeze in the recruitment
process it looks be lower than last year. As the majority of employees feel that
companies are looking to restructure the organization according to the trends.
4. Conclusion
To sum up the entire project we can see a few trends emerging as the growth
opportunities which the industry should be looking forward to, R&D being one of
them. Research & development and creating new software solutions will be the
key to success in the future of Indian IT. As per the analysis carried out, we can
clearly see a trend emerging as the companies are looking forward to deploy 20%
of staff. This should be a step forward to counter the perception of Indias
services are catering a market of low strategic importance. Product Maintenance
coding is another area where outsourcing seems to be the most attractive till
now, however there is clear upcoming of new product design in this matrix.
33
Although we see that there is a dependency in terms of business from the US, but
it can subsided by the trying to identify and tap clients across Europe, Australia,
South East Asia and Japan. One of the most encouraging factor was that even the
project carried out are mostly application solution software & system integration
but there is no dearth of knowledge in terms any particular segment of the
software development cycle. Also, although we have seen that maximum of the
contracts are undertaken are through companies own initiatives and contributing
to the project as the prime contractor, however it is closely followed by contracts
through open bidding & clients own initiative. This essentially means that
companies are not dependent on an individual source for business generation &
Development. Now coming to the point of emerging new technologies, we can
state that cloud computing, big data analytics & IOT will be the ones to command
the market. With an increased penetration of affordable devices, combined with
cloud computing, analytics and rising consumer expectations is driving the rapid
growth of the IOT market. Therefore the industry should watch out how all of
these technologies can be combined to take the industry forward.
The scope of the project will be limited if we dont look at the potential threats
which are at question here. The weakness of this industry primarily is the lack of
technical skill set which might be limiting the progress of this industry. As per DNA
(7th October 2016), 7% of the engineering graduates are employable, 97%
graduating engineers want job in software or core IT. But only 3% of them have
suitable skills to be employed in a software or product market and only 7% can
handle core task operations in the IT sector. But how was this industry able to hire
students in such a large chunk, it was due to the fact that they take up 4 to 5
months of in-house training facility to train them to make them ready for the job.
Therefore the need for the hour for the educational institution are to change the
course overall to make it more aligned with the business requirement. This
essentially need for specialized knowledge in India, as it takes up the new
regulation.
Now coming to the point of On-site opportunities, we know there is a
considerable reduction due to new regulations. As per the national foundation for
American policy quote, it says, While the threat of job loss has long been
exaggerated by critics, it reaches illogical proportions when discussing fewer than
10,000 workers in an economy that employs 160 million workers nationwide.
34
Although we see the new regulations impacting the hiring of 7 big IT firms in India
(i.e TCS, Infosys, Wipro, cognizant, Tech Mahindra, Capgemini, Accenture etc) in
terms of recent regulations. It seems impossible for US to put back all of its jobs
back in the country. The overall effect of this entire changes of H1B is to be a
maximum of 0.006%.
5. Recommendations
As per the data analyzed, we stated that the IT companies will be trying to diverse
its activities and not depend on the traditional coding business, but the entire
reforms of the industry will take time and will happen over the course of five
years. The current focus will be on the education system and how to create new
skill sets to adopt to changing technological need. Therefore, the hiring by these
companies seems to be limited. Also, the IT BPM sector which accounted for 65
to 70% share in commercial office leasing activity in the Top Indian cities until a
few years ago, has lost some of its sheen because of severe global challenges and
transitions inside the industry, though it still maintains a maximum share of over
50%. This is opportunity to explore the other side of the 50%, major player being
BFSI sector which is rapidly moving to more than 14% occupancy as of now and
consulting moving to more than 8%. This seems to be correct situation to diverse
the search for potential tenants as we look into the near future.
35
Appendix 1
H1B Visa process
Finding H1B Sponsors List

Sponsors References
Interviews
Apply Jobs Offer Letters
File H1B Documents

Petition Attorney
Fig No.21H1B Visa Process
1. Offer & Acceptance of H1B Employment - H1B Sponsoring Company files a petition on your
behalf.
An employer can be an individual, partnership or corporation. Applications are "job specific." If
your situation changes (for example, you lose your job or change locations), your new employer
must file a new H1B visa petition. The visa is only valid for work with the employer that filed the
original petition. The USCIS requires employment letters which provide:
Specific information addressing the positions held
The exact duties of the position
36
The exact dates of employment
Information regarding the supervisors and co-workers of the beneficiary.
2. The 'Prevailing Wage' and actual wage must be determined and compared. The H1B
sponsoring company is required to pay the higher of the two.
The prevailing wage is determined by the State Employment Security Agency by completing a
special form, which asks the employer for the responsibilities, skills and experience needed for
the job. The actual wage is determined by comparing other workers in the same positions with
the same level of experience.
3. File the Labor Certification Application (LCA).

This is a form that contains information about the H1B Sponsoring Company. By completing and
signing the form, the sponsor company is agreeing to pay the higher of the two wages, that the
employment of this individual will not adversely affect the conditions of other workers and that
there is no strike for their occupation at the workplace. Recently, Congress determined that
H1B sponsor companies must attest that they will offer H1B visa holders the same benefits as
their other workers. This includes health, life, medical, retirement, stock options and bonuses.
4. When the LCA is approved, the Department of Labor (DOL) will return a certified copy to
the H1B sponsoring company.
5. The sponsor company must post notices at two conspicuous places at their business of the
H1B visa filing for 10 days or provide notice of the filing to the collective bargaining
representative for their employees.
The LCA form can be used for the actual posting as well. After the Department of Labor accepts
the LCA, then your employer can file your H1B visa petition.
6. H1B Petition assembled & filed with appropriate USCIS Service office.
The filing must include the required forms, fees, documents and information; form I-129,
education & experience evaluation & documents, training certificates, professional
memberships, resume, employment agreement and letter of support.
7. Wait for the H1B petition to be processed.

Processing times vary depending upon service center and the visa. It could be a few months
wait. If the H1B employer can show a substantial need for the employee, USCIS might approve
the petition sooner. Employment cannot begin, however, until USCIS has issued the appropriate
visa.
8. Receipt issued by USCIS

The petitioner (sponsoring company) is sent a receipt by the USCIS Service Centre which bears a
9 digit reference number pertaining only to that particular case, H1B processing times and
general information about the petitioner and foreign worker. This is the petitioners first
confirmation that the petition is in the adjudicating queue.
37
9. A notice is generated by the prospective employer and mailed to the applicant notifying
him/her of this receipt and outlining information on processing times etc. The notice should
warn the consultant not to resign from current employment, sell accommodation or make any
major life changes until it is communicated that the H1B visa petition has been approved.
10. Petition Approval

Generally a case will be approved within or on the designated time frame outlined in the USCIS
receipt. An approval notice (Form I-797) is issued to the petitioner. The Form I-797 shows dates
of validity for the foreign worker to work in H1B status for the petitioner.
Appendix 2
Questionnaire
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Mapping the IT Industry

For the period of 2017 - 2022

Mapping the IT Industry

Under the Guidance of

Industry Mentor: Faculty Mentor

Weighted Average Lease Expiry

3. Trends of Automation in the IT industry

1.2.1 Impact on India

Fig No.2 SWOT Analysis of Indian IT industry

Bargaining Power of Buyers : HIGH

Bargaining Power of Suppliers : MODERATE

Rivalry Among Existing Players : HIGH

Threat from Substitutes : LOW

Threat of New Entrants : LOW

Fig No.3 Porter five force framework for IT industry

Fig No.4 Porter five force framework for IT industry

2.5.1 Sample Size

2.7Benefits of the project to the company and the intern

3. Findings of the research

15 2018 - Sales & Marketing

10 2020 - Sales & Marketing

2018 - Administrative & Finance

Fig No.6shows the ratio of Engineer vs Non Engineers

Field Minimum Maximum Mean Std Variance Count

As per 72 % of respondents they believe more than 50 % of employees in their

Trends of software development activities

2018 - Product architecture 2019 - Product architecture 2020 - Product architecture

Fig No.8shows the countries/regions where the IT services are exported

When we tried understanding the dependency of outsourcing activities. We can

With US emerging as the country with maximum subsidiary established by the IT

3.7 No real dependency on a particular segment of the life cycle

3.8 Contracts mostly through own Initiatives for the Companies

Fig No.12shows how the contracts originate for the IT companies

3.9 Maximum prime contractship

Fig No.13 Shows the distribution of contractship

3.10 Offshore dependency

Fig No.14shows how the projects are executed

Fig No.15shows region/places where the primary competitors are located

3.13 Emerging trends in IT

With an increased penetration of affordable devices, combined with cloud

Fig No.19shows expectation in terms of On-site Opportunities

3.16 Freeze on hiring

Fig No.20shows the number of people hired by the companies

H1B Visa process

Finding H1B Sponsors List

File H1B Documents

3. File the Labor Certification Application (LCA).

7. Wait for the H1B petition to be processed.

8. Receipt issued by USCIS

10. Petition Approval

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