The real disruption from the cloud is yet to come for Indian IT services companies

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About 60% of revenue for software vendors (for businesses) is custom and 40% ($135 Billion, 2014) of it is packaged. Over the last 10 years, the trend has shifted from custom  to packaged (Saas). With the rise of cloud deployment the time to install, upgrade and customize software has reduced dramatically as well. Finally with cloud deployments, the number of people needed to manage servers, patch and upgrade systems has dramatically gone down.

These 3 main factors are the reasons why there is a lesser need for software developers, system administrators and systems integrators.

The WSJ has a piece on Indian Outsourcing firms changing direction thanks to cloud. The piece talks about how larger customers of Indian outsourcing firms are no longer signing up for large contracts to outsource their work.

The Indian outsourcing market has grown over the last 20 years from less than $1 Billion to over…

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