Thursday, May 1, 2014

Information Technology Products versus Services

The earnings per head in IT product companies are usually very impressive.  This raises the question if engineering education in India should give greater attention to IT products, hardware and software. A related question is that of startup companies. Indians living in the US are very much interested in startups. Many of them have created very successful companies and have, thereby, created impressive wealth.

Yet another issue is of professionals of Indian origin who reach the position of CEOs in major global companies. The recent cases of Satya Nadella at Microsoft and Rajeev Suri at Nokia  are interesting. Interestingly, both had studied engineering at the Manipal Institute of Technology.

I will discuss here what institutes of technology and engineering should do to improve the chances of their graduates being successful in product oriented and entrepreneurial activities. Professionals of Indian origin who get to head major companies usually have two degrees – a B.E. or B. Tech. and an M. B. A. Not surprising, as high level management and/or entrepreneurial work requires expertise in technology as well as in management, but you don’t always need a degree to give you that expertise. The Wikipedia article on Rajeev Suri says specifically, “
He is one of those rare top corporate executives who have achieved heights without pursuing any MBA/PG degree”.

Skipping a P. G. degree and/or an M. B. A. at a mediocre institution is a wise thing. You could be earning a good salary during those years that others waste there! Besides, if you know what you want to do, you can start implementing your ideas earlier instead studying miscellaneous subjects! However, if you skip P. G. education, don't fall from the frying pan into the fire!  Be careful not to take up a dead-end job in which there is no opportunity to learn! The salary does matter, but what you are likely to learn in a company matters more!

Another dimension is passion. People who do well with products and startups are often those who pick up ideas and work on them over years with a high degree of passion. They struggle, take risks, and learn on the job. They learn to work with others and to convince influential persons that it is worth betting on their projects. If the persons to be convinced are those that manage venture capital, the budding entrepreneur needs some knowledge about business in addition to his/her knowledge in technology.

One “good thing” about the Indian environment is said to be the respect young people have for older and senior professionals; but these young people who go on to spend a year or two in the US environment usually lose that “good thing”! By all means, respect the elderly professionals, but that does not mean you have to respect only their ideas. In general question every idea including your own, before you commit to them.  
What does all this mean for education? Let me articulate a few suggestions:  
  1. What you teach in your institution has to be chosen very carefully. Courses not reviewed for their significance and utility for a long time are great wasters of young peoples’ energies. They make fools of the teachers who are compelled to teach them merely “because it is the university requirement”.
  2. Project oriented courses are valuable. Usually in such courses, small teams dream up project ideas and implement them, learning any new technology required on the job. The teacher acts as a facilitator.
  3. Some courses related to business knowledge are valuable. Some of these courses are sometimes scoffed at as “soft courses”. Many teachers would prefer to teach courses with significant mathematical background instead. Evaluation becomes easier with such courses. The teacher can show off his/her mastery. However, management and entrepreneurial activity often demand varied types of knowledge.
  4. Bad teaching of a “soft course” can be disastrous. It is usually worse than bad teaching of a course with a mathematical background. Soft courses are best taught by very good teachers. Mediocre teachers should stay away from them.

If you want your students to become good entrepreneurs and/or top managers, you need to plan for it. Institutions and teachers need autonomy for this. If such autonomy is available to you, use it! Effective use of autonomy makes all the difference!  

Srinivasan Ramani


Ravi S. Iyer said...

My view based on my experience of the Bombay software export field in the 80s and 90s, is that, during that period, India was not that much of a viable market for fledgling software products. It was far easier and far more profitable to offer software development services to economically developed countries like in the Western world or, in some rare cases, tie up with some NRI(s) based in the USA to develop products for the US market using software developers in India.

In stark contrast, in the 80s and 90s, the US market was a fantastic one for fledgeling software products, even if many products failed. Customers were willing to try out new software that promised to fulfill some of their needs or improve their business in some way, and the software products that satisfied customers at reasonable price, succeeded, sometimes wildly succeeded. However, it was important to have a very good understanding of the customer needs and business and also be able to provide very quick-turnaround support for any issues faced by the customer. Due to that, attempting to create software products for the US market, based entirely in India, was not really working out - the US based competition was able to do far better.

I don't know what the picture is about the Indian market today. I would presume that now there may be a decent market in India itself for Indian software products.

Regarding B.E./B.Tech. and MBA being a good combo for company leaders, I am not so sure about it in the case of software product companies. I think that combo works out great for software services companies. For the software product companies, as you wrote, passion is a vital factor in such company founders and leaders. Risk-taking ability, brilliance in understanding the niche areas the product(s) cater to and mastery of technology are vital. The finance bit, IMHO, is not that hard to understand for a software product company start-up and does not really need a business administration or finance degree.

I tend to agree with all four of your suggestions regarding education to encourage software (and hardware) entrepreneurship. I would like to add a point about education to encourage software product development skills:

*) Students should study and then try hard to contribute to great open-source software products out there as part of their degree work. Just imagine the confidence a Computer Science (CS) or Information Technology (IT) graduate/post-graduate would have if her/his contribution got accepted. Unfortunately, the culture in most Indian CS & IT departments does not promote and reward (by good grades) such work. Many times the teaching faculty themselves are not so comfortable with in-depth software development, and even tend to look down upon software development work as low-calibre work (as against producing research publications). My considered view on the matter is that a software product developer/visualizer/creator has to first and foremost be fluent in software development - coding fluency is to software creation what linguistic fluency is to creative writing. That gives the foundation for trying out various ideas. Adding strong research skills/insights/ideas to a solid-base of software development opens up tremendous opportunities for software product creation. However, even top research skills if not supported by a strong software development skill base, will lead to self-doubt as the person may not be able to, by himself/herself, confirm/validate his/her research ideas through software prototypes.

Srinivasan Ramani said...

Thanks to Ravi Iyer for his valuable comments above.

I wish to add another point - interest in design and in human factors. Product development should not ignore simplicity from the user point of view, ease of use, and consistent and predictable product behavior. A course in design (in the sense design schools use the word) could be valuable to software developers who could be working on software or hardware products later on.