"If I am doing a CRM project, I have operational constituents, call centers, sales people and I need to collaborate along political and functional lines," Herrick said.
Answering new demands
Not that these acquisitions are futile, nor by any means that large Indian consultancies lack business expertise. The point is that joining the club will be evolutionary, with smart strategic acquisitions accelerating the process.
Wipro understood exactly what it was getting when it bought Infocrossing. Before the acquisition, Wipro had a small, 500 person footprint in the U.S. Now it has penetrated remote infrastructure management as a new domain and hired an additional 500 people in Atlanta. Wipro also runs six datacenters in every time zone in the U.S. and has new credibility in health care, payer management, and insurance, says Unisys' Blanton.
The offshore companies are rich with cash and a unique opportunity has arisen in the States with the strong rupee and low inflation. "Buying here is a perfect hedge," said Blanton.
One fact remains true for both U.S. based and India-based companies: It's clear companies are demanding more from their partners. Not only do they want an industry and domain view, they want a complete solution, from the strategic to the operational details.
Val Rahmani, general manger of infrastructure management services for IBM, says his Internet Security Systems division now has to be combined with experts from telecom and financial services before a customer will talk to them. "A lot of what we gained from PWC [Price Waterhouse Coopers] is what drives us forward. We gained industry expertise in banking, telecom and health care."
And of course, the real goal is to create a small set of initial customers and then replicate it globally. "If we were starting today without the industry skills, we would be 15 years away," adds Rahmani.
A two-way street
Rahmani's phrase "replicate it globally" is probably the key to understanding what is happening to business worldwide. Big Blue says it wants to be able to take advantage of high-quality skills no matter where they are. "We will always be the front end. We understand the client, the technology and the industry. But there will be pieces you automate and some you do remotely," Rahmani says.
But that front end won’t be limited to mature markets. IBM is investing in India and China not just to acquire technical expertise, but also to establish its own beachhead as those markets grow.
In other words, the acquisition strategy cuts both ways. Companies need to understand the culture and way of working in whatever market place they want to play in. When IBM employs 53,000 people in India, that's not just a play for cheap labor. The company is also planting a flag and establishing a presence. "It is not about the U.S. versus the rest of the world, it is about leveraging global delivery wherever it makes sense," says Rahmani.
What the headlines are really telling us is that globalization is happening at an ever quickening pace, and despite the often legitimate complaints of U.S. computer professionals about job loss here, the trend is creating jobs worldwide.
"If you look farther out, and ask what is the next India, maybe there is none. What could happen at a longer time horizon is a global sourcing strategy -- and one that is not just about wages," says Herrick.