Non linear growth models for IT industries: a comparative study

Abstract

Indian IT services Industry has come to a stage where, In future, growth options for these organizations cannot be on the current linear business models they follow. A need has arisen to find alternative business models which are innovative and also compliments the organizations growth in a nonlinear way. In the past there have been many Software organizations that have found a business model for them which have been very successful to take a new path for their organization and discover itself again. For example, IBM, the US software giant, switched to a business model and adopted a suitable strategy to shift away just from hardware s to a company which focuses on services and software products /tools. This is one company which took complete advantage of globalization and adopted itself to the changing market needs. Apple for instance has been a leader in product innovation for almost a decade now. All its products ranging from IPod to the latest I Pad -4g have been very innovative and have helped Apple gain the status as the most valued company for a brief period. In contrast, tier I software service providers of India are finding it hard to find a business model which is nonlinear. The current business model of these firms supports a growth which is directly proportional to the head count. Moving up the value chain and partnering with clients has also been tried almost for three years which has resulted all these firms in little success. All these companies which post a Net profit of at least 20% as an organization either break even or report a marginal loss for their consultancy division. We, in this project intent to study the business models and strategies of the companies who have successfully found a new path for their existence and compare it with the Tier 1 IT service providers business models and strategy and thus come with recommendations.