Monday, February 1, 2016

Time for me to stop commenting about politics and other sensitive topics

I've been cautioned and advised by several good friends that I should take a chill pill on commenting about various political things. Some of the topics I've been quite vocal about are high profile things involving high power people .. and I might be beginning to get noticed by them, which of course is not a good thing!

I get frustrated by political actions that I find to be stupid and I don't hesitate to tell it straight the way I think about it. Obviously every such statement bothers someone else. Its one thing when its irrelevant noise, but if it gets noisy then I'm a troublemaker.

I'm not keen to get to that state.

Its not because I have anything to hide or protect - not in the least. Further I'm not scared off by the PM telling private sector people like me to "go home" or "be exposed" but publicly naming private individuals in parliament is rather over the top IMO. Last thing I want is to get there.

I have an immediate family and an extended family of 500+ in WSO2 that I'm responsible for. I'm taping up my big mouth for their sake.

Instead I will try to blog constructively & informatively whenever time permits.

Similarly I will try to keep my big mouth controlled about US politics too. Its really not my problem to worry about issues there!

I should really kill off my FB account. However I do enjoy getting info about friends and family life events and FB is great for that. So instead I'll stop following everyone except for close friends and family.

Its been fun and I like intense intellectual debate. However, maybe another day - just not now.

(P.S.: No, no one threatened me or forced me to do this. I just don't want to come close to that possibility!)

Wednesday, January 27, 2016

Understanding the (Sri Lankan) IT Industry

In the last 3+ weeks there's been war raging in the IT Crowd in Sri Lanka about the proposed CEPA/ETCA thing: Basically the part of a free trade agreement with India which might allow Indians in the IT and ship building industries to work freely in Sri Lanka. I know nothing about building ships so I don't have any opinion about whether the proposal addresses a real problem or not. I do know a thing or two about "IT" and am most certainly opinionated about it :-).

I also know little real info about CEPA/ETCA because the government has chosen to keep the draft agreement secret. Never a good thing.

There have been various statements made by various pundits, politicians, random Joes (Jagath's I guess in Sinhalese ;-)) and all sorts of people about how the Sri Lankan IT crowd is
  • Scared to their wits that their jobs will be taken by Indians
  • Looking for the state to give them protection from global competition
  • Unable to compete with the world's IT industry without help from Indians
  • Unpatriotic because a lot of them leave the country after getting quality free education
  • Living in a bubble because some of them get paid Rs. 150k/month straight out of university
  • Etc. etc..
I will address a lot of these in subsequent blogs (hopefully .. every time I plan to blog a lot that plan gets bogged on).

The purpose of this blog is to try to educate the wider community about the mythical thing called the (Sri Lankan) "IT industry". For each area I will also briefly touch upon the possible Indian relationship. Of course this is all my opinion and others in the industry (especially in the specific areas that I touch upon) may vehemently disagree with my opinion. Caveat emptor. YMMV.

So here goes an attempt at a simple taxonomy:
  • Hardware Resellers/Vendors
  • Hardware Manufacturers
  • Software Resellers/Vendors
  • Software Manufacturers
  • System Integrators - Local Market Focused
  • System Integrators - Outsourcers
  • Enterprise Internal IT Teams
  • IT Enabled Services (ITES) and Business Process Outsourcers (BPO)
  • Universities
  • IT Training Institutes
This became way more of a treatise than I intended. I'm sure its full of things that people will disagree with. I'll try to update it based on feedback and note changes here.

Hardware Resellers/Vendors

IBM Sri Lanka has been in Sri Lanka for more than 40 years I think. I imagine they came when Central Bank or some big organization bought an IBM mainframe. I remember seeing Data General, WANG, and a host of other now-dead names growing up (70s and 80s). 

These guys basically import equipment from wherever, sell it to local customers and provide on-going support and maintenance. 

Some of these players don't sell entire computers or systems but rather parts - visit Unity Plaza to see a plethora of them.

Not too many Indian hardware brands being sold in Sri Lanka AFAIK but probably MicroMax (the phone) is an exception. So having the Indian IT Crowd here really has no impact on this segment.

Hardware Manufacturers

These are people who make some kind of "IT thing" and sell it locally or export it. When it comes to technology no one makes all of anything any more - even an iPhone consists of parts from several countries and is finally assembled in China. Same with any computer you buy or any phone you buy.

There are a few people here who "make" (aka put together / assemble) computers and sell under their own brand. There are also a few who export them (I believe).

There are also some others who make specific hardware devices that target specific solutions - best is the company that makes various PoS type systems that get sold as Motorola.

Fundamentally not many hardware manufacturers in Sri Lanka yet AFAIK. In any case, they're not likely to be affected by Indians being in Sri Lanka as this is a very specialized market and its unlikely the specialized skill will migrate to Sri Lanka given that skill base has excellent opportunities anywhere. If at all, electronics related graduates in Sri Lanka do not have enough good career opportunities yet as we don't have many companies buildings things yet.

Software Resellers/Vendors

Takes Microsoft Sri Lanka or the 100s of other agents of global software brands that sell their wares in Sri Lanka. These guys get a cut out of the sale in some fashion. 

Yes of course some of them sell (very good) Indian software. For example, a bunch of banks use InfoSys' Finnacle (sp?) core banking system.

Software, used well, can increase any organization's productivity (after all, software is eating the world and all that). If there are Indian companies which have technology that can be used to improve LK orgs productivity - by all means do come and sell it here! That may even require Indian engineers to come and install / customize them - no problem at all.

So, this segment will simply welcome more Indian presence in terms of companies. In terms of the Indian IT Crowd coming here for this segment - I guess experienced sales people are solutions engineers to help sell and deploy the Indian products are always welcome. To be successful the company will need to send good people (good luck selling software if the sales engineer sucks) - and good people are welcome anywhere.

I should mention the global SaaS software products (e.g. Salesforce, Netsuite, Google Apps, Office 365 etc.). Most of those don't have regional sales teams etc. - you just go to the website and sign up and use it. However, they will often have local system integrators who know how to help deploy, tune, customize and integrate those systems to whatever enterprise systems are already in place.

Software Manufacturers

These guys make some kind of software product and sell it to whoever will buy it. More and more are selling them online as SaaS offerings only.

Competing in the software product market means you just need to build a better product or at least have a good enough product that's cheap. To create great products you need great people who think and innovate faster and better than anyone else out in the world. More and more pretty much every product competes globally as even the smallest customer can simply use globally available SaaS offerings (some made in Sri Lanka even). 

Every idea someone has for a product in Sri Lanka is guaranteed also conceived by at least multiple Indians. And multiple Americans. And multiple Europeans. Etc. etc..

"Ideas are cheap. Execution is not." - Mano Sekaram at a talk he gave at the WSO2 Hackathon a few years ago.

To make products and get them to market is not easy. Will having some Indian employees help? SURE - if they're awesome people. The 2m people who applied for a clerical job really wouldn't help. Will marketing experience help? Of course - but again high quality product marketing experience is hard to come by in Sri Lanka, in India and even in California (speaking from personal experience). 

Despite idiotic politician statements about how advanced the Indian IT industry is, they are much more a global outsourcer and BPO operator than a product development country. That's changing rapidly but the numbers in the product side of the equation are much lower than the other side. In fact, I'd venture to say that as a %ge there are more product companies in Sri Lanka's IT ecosystem than in India's. In any case, the word "advanced" is very hard to quantify in the software world.

So sure, let anyone come - but good luck getting too many jobs in product companies that have no patience or interest with mediocre people. You need a few superb people to build a great product and fewer great people to market and sell it. If you're a super engineer or a marketer in India, there are tons of opportunities for you in India already, so the only way you'll come is if we offer a better total package: Check out WorkInSriLanka. I hope you come and stay and never leave! 

For WSO2, we're a BoI company. If we find a high quality person from ANYWHERE who wants to work in Sri Lanka we can bring them over. Piece of cake really - visa wise. We will NOT pay higher salaries for foreign people though - something that I know many do and something I soooooo detest. Sri Lanka seems to love reverse discrimination.

System Integrators - Local Market Focused

These companies take software and hardware from whoever and produce solutions for customers. These are systems that solve a particular business problem for some organization. For example, the vehicle registration system at the Department of Motor Vehicles.

The work these guys do involve working with the customer to understand the problem domain, figure out a good solution architecture, figure out which technology to apply and then to build the full solution. All very important stuff!

Who works in these places? Typically a combination of business analysts, architects, engineers of all kinds (software, QA, UI etc. etc.), project managers and so on.

Sri Lankan enterprises are quite slow to adopt software technology. This (IMO) is primarily because labor costs are low, because customer expectations are still not hard meaning competition is not that intense as it is in say US. That will change and we will need a LOT more people to integrate and build solutions for local companies. Can we meet the demand with local skill - my guess is yes. If we need a few more, the integrator companies can easily import people too.

There is one segment of this market that is special however. Small enterprises are also picking up low end solutions. These are often implemented by the owners daughter/son or niece/nephew type person. Basically some trusted computer geeky relative who "automates" the place in some form. That used to be with an Access database + VB type thing .. not sure what is in play today in that space.

That market is critical to help develop the local IT Crowd as it gives business (aka employment) to many many relatively low skilled yet value-adding people. The people working in these places don't need 4 year CS degrees. They're simply people with a bit of knowledge (acquired from a tutory type place) and a good knack for computing. Its critical to support and protect this community because they deliver technology to the wider mom&pop / small kade business community. 

I think a bunch of lower cost people from India working in Sri Lanka in this market could be a negative thing as it could threaten employment for low end IT workers. However, many of these deals are struck based on trust and relationships so it'll be really hard for anyone to break in.

System Integrators - Outsourcers

These guys take work from a foreign country (typically a more wealthy country but could be one that simply has a dearth of technical capacity) and bring it here to do the work. Virtusa is of course the largest (~3000 or so people AFAIK) but there are TONS of smaller players employing a few 10s of people and a few dozen or so in the 100s range I think.

The smaller ones always start with a single contract the owner managed to get from his/her work in the foreign country or thru a friend/relative outside. Do one task well at 1/5th to 1/3rd the price in the US and you can clearly keep get more business. Capitalism at work.

The bigger of these companies are great places to work for the best of the best. They may give opportunities to learn a ton of stuff, travel, develop soft skills etc. etc..  Lots of passionate employees who will not move easily.

The middle sized ones (> 25, < too many 100s) are usually great companies. They pay people well, they provide a quality work environment, they have passionate employees and often specialize in one or few areas (e.g. Alfresco or Mobile apps or whatever) and therefore command a higher charge out rate. 

The small companies (<= 25) tend to be more sweat-shop like from what I've seen - pay the people as little as possible and use crazy micro project management to deliver. No passionate employees typically. Its just a job that gives a paycheck for people who are relatively low skilled (and low initiative powered too).

Virtusa has offices in India too with like 7000 people I think. If they want to hire Indians they can hire them there. If they want to bring people down here they can do it and undoubtedly do it already. (You need to go thru the Board of Investment but its trivially easy. FAR FAR FAR easier than hiring a foreigner in the US .. or I imagine India.)

Does this part of the IT Crowd get affected by possible mass migration of the Indian IT Crowd to Sri Lanka? Not for the Virtusa's of the world IMO. However, for the smaller players, the small company CEOs who are milking money off the small outsourcing contracts, yes getting cheaper invisible people will be better for them. That could indeed mean a reduction in employment opportunities for the lower end of the technical community who work in these places as there indeed will be Indians willing to work for less (see Two million apply for 300 clerical jobs and 80% of Indian Engineering Graduates are Unemployable as recent examples).

It would be great to have multiple Virtusa's in Sri Lanka. In 2009, Mphasis (apparently India's 7th largest service provider then) tarted operations in Sri Lanka with intent to hire 2000 but AFAIK have packed up and gone or are nowhere as big. I'm sure someone who knows will reply and I'll add a note.

Would Infosys or TCS or whatever open up here if they have to bring people from India to Sri Lanka? I can't see why .. then why not just execute that in India itself. What am I missing in that equation?

So I cannot see the larger players affected by this. The smaller players (and by that I mean the really small ones .. < 25 people) will probably benefit by getting cheaper workers. Will we see tons of iOS developers in LK with this? No, because they're a scarce commodity anywhere. Period. For the middle sized guys (> 25, < too many 100s) certainly getting more senior, experienced people from India will be a good thing. However, I see that as no different from attracting any national to come to Sri Lanka to work. I ABSOLUTELY want that - that's why I helped form WorkInSriLanka and am still part of it. 

High end people (of ANY origin) moving to Sri Lanka is critical for our future .. we need to become a net brain importer and not an exporter. However, they will come only if (a) you pay them properly and (b) if the quality of life is really good. These are things that WorkInSriLanka is addressing / informing about.

Enterprise Internal IT Teams

This literally the IT Crowd in the companies. (Haven't seen the awesomely funny British comedy? Check it out.) 

Well actually often they do much much more than that crowd. The IT Crowd guys are only IT operations - they keep computers running, keep networks running etc.. That's absolutely critical. But now more and more companies are using information as a key business strategy. What that means is that internal IT is becoming more and more important. Companies cannot afford to buy prepackaged solutions nor simply outsource to others - they need to innovate inside the company to create real business value for themselves in a way that differentiates them from their competitors.

Not easy stuff.

You need really good people. Not 100s, but a good number of really really good people and a bigger number of good people. You also need a visionary to be the CIO/CTO to drive that effort. Not at all easy.

Sri Lanka is still in transition to that. Some big companies are doing it really well, but there's a massive dearth of really innovative CIOs in Sri Lanka yet. We're developing them as they move up the ranks but IT was kept away from the business and that needs to change for this to work. 

Is it a possibility to import talent for this from India? Of course! However, they are not cheap as those people have 1000x more work in India than here! What will happen to less skilled people who might come to this space? Good luck getting a job.

For smaller companies, they don't have enterprise IT. Then they have the IT guy - the jack-of-all-trades who knows how to help with Powerpoint to debugging why he can't get to FB to cleaning up after he stupidly clicked on yet another get-rich-quick email. Those guys don't have (and don't need) CS degrees or IT/IS degrees. They need some training and lot of experience. They also get paid very little (think 25-50k/month). 

Those guys could get crunched if we allow hundreds of such people to come from India. That would be just stupid.

IT Enabled Services (ITES) and Business Process Outsourcers (BPO)

This is where the numbers are. Order a pizza in Texas? An Indian will answer. Call Delta airlines with an issue? An Philippino will answer. Call HSBC about an issue. A Sri Lankan will answer.

These started off as call centers but more and more they take an entire process (e.g. claim processing for medical claims) and run the entire process in a lower cost location. All you need is a good network connection and a lot of (young) people who will work for a little amount and work odd hours and be happy with it. Sri Lanka also claims to be the largest producer of UK qualified accountants after UK .. and so does a lot of financial process outsourcing too.

There's also high end parts of this market - research outsourcing, analytics outsourcing etc.. Great. Do more. 

Sri Lanka produces 300-400 THOUSAND 18 years each year. Only like 25,000 get to a university of some kind (who are the ones who have a chance at a higher value job). The rest need work. 

This low end kind of ITES/BPO work is great .. it gets them a salary and if the country keeps devaluing the LKR they even get salary raises every year! Keeping people employed prevents them from wanting to join revolutions.

Some BPOs claim that they couldn't scale enough in LK because they can't find the large number of passionate, English capable young people. Probably true. 

MAYBE its possible to import them from India, but presumably only those that couldn't get jobs in the myriad of Indian BPOs. However, how that helps provide employment to the droves of young people who need work in Sri Lanka I do not know.


These guys of course produce the IT guys. We have state universities, private universities that grant their own degrees and a plethora of private ones that provide a learning environment to get a foreign university degree.

As with anything the quality varies. The top govt engineering / science universities and the top private ones produce AWESOME graduates who are absolutely as good as the best in any country (India, US included). WSO2 is lucky that a bunch of these guys join us :-). 

But my focus here is on the teachers. We need more PhDs to teach in our universities - ask Jaffna Univ CS dept for example. Will Indian PhDs (good ones) come and teach there? Great if they want to! Salary is pretty poor but its what it is. Even private universities will happily hire teachers. 

We also need top research focused scientists to come here so we can improve our research capacity. I don't think opening employment to Indians will make a single IIT professor to come :(. Even right now, they can come (visa is easy) - so please, if you want to come and teach in Sri Lanka reach out thru WorkInSriLanka and we'll help you! And don't ever leave.

India has absolutely fantastic universities. If they want to come and set up shop in LK and offer education to our people - great! India also has a LOT of crappy universities (see the article about unemployable graduates) - we certainly don't need them here.

IT Training Institutes

These are the literally hundreds (and maybe even thousands) of places that offer this course or that course on this or that. 90% of them in my opinion is crap. There's too little quality control. People are getting swindled daily by these jackassses who teach their children next to nothing and yet charge a ton of money. Even some local governments are in on it - I know in Dehiwala (my area) they run a program where literally 100s of people come for IT education. Each pays like Rs. 3000/month. Poor parents can't say no so they do it somehow.

Do we need more of these? Yes, IF THEY ARE GOOD. We need to get our house in order, put regulations in to quality control these places and then of course its great if more teachers come and teach more. 

India has absolutely fantastic training institutes. Would be great to get them to open shop here.

India also UNDOUBTEDLY has at least 10x crappy places than we do. Most certainly we don't need them here - we already have enough people robbing money from poor parents who desperately want to educate their children in "IT".

(p.s.: has the world's WORST editor. I'm bailing to soon.)