The challenge for the Indians is to learn how to interview a client’s customers and senior executives to figure out what the right technology frameworks are. “That’s where they have to develop their skills,” says Lamming. “They’ll get there.” At the same time, Lamming believes that the Americans have to continue driving down their cost structures by expanding their offshore presences.
The arrival of HP in the outsourcing battle, through its acquisition of EDS, will almost certainly rev up the level of competition. But Khanna, for one, argues that IBM, HP/EDS, and Accenture face a fundamental gap in their cost structure, and therefore the prices they’re able to offer to customers. “They have opened massive development centers in India, but I don’t think they can come close to matching the costs of Infosys and Wipro, because they are still centered in their headquarters in the United States,” Khanna argues. “They can cut down the difference between themselves and the Indian vendors, but they can’t eliminate it.”