India's Outsourcing Firms Change Direction as 'Cloud' Moves In

[Recursion]

http://www.wsj.com/articles/indias-outsourcing-firms-change-direction-as-cloud-moves-in-1436740981

(Paywalled; to bypass -- and this works for any WSJ article -- Google the title or URL and click through the Google results; WSJ has cut a deal with Google to make the first click always free. Consider this your lifehack tip of the day.)

Outsourcing accounts for around 20% of all of India’s exports of goods and services. The industry employs millions of Indians and has become an important route into the middle class in the world’s second-most populous country.

The impact of the move to cloud computing—where servers and software are accessed via the Internet rather than on local networks or personal computers—is being amplified by other trends, from automated code-writing to increased competition and falling corporate information-technology budgets.

If Tech Mahindra, Infosys Ltd., Tata Consultancy Services Ltd., Wipro Ltd. and India’s other big IT outsource companies fail to change, the consequences for India’s economy could be dire.

The value of outsourcing deals signed in 2014 shrank 17% to $120.4 billion from $145.5 billion a year earlier, according to consulting company KPMG LLC.

This is, roughly, the equivalent of robotics in manufacturing and driverless cars in transportation: even the developing world is finding automation cheaper than local labor.

[Erich Bloodaxe BSN]

1. And it's goodbye Indian middle class, unless, of course,

they can get the political will together to do what we have failed to do so far, and break capitalism's grasp around their neck, and demand the wealth created through automation be shared with all, and not merely concentrated in the hands of their own 0.01%.