Has India finally started to kill the goose that laid the golden eggs? After all the articles about outsourcing, here is one from the ceo of like.com(tcfka riya.com*) that is taking a different direction. Munjal is clearly a good ceo and most definitely a clear thinker (and writer as evidenced in his blog posts). So it is not surprising that he and his team at Like.com finally decided that the cost savings in India were not worth the communication challenges and productivity speed blocks.
The big 4 in India continue to grow rapidly (Infosys, TCS, Wipro, ??) but India needs to start producing more software for internal consumption if it wants to gain long term independence from its US and European customers. That means gaining more experience building products for companies like Riya instead of pure outsourcing gigs.
The raising rates of software engineers in India is good in the short term but unless they figure out a way to increase the rate of innovation locally and have a strategic plan to create a Sand Hill road in India they are hurting themselves long terms by making it easy for companies like Riya to take their business elsewhere.
* tcfka: the company formerly known as