Tech companies should step up investment in Services?
Creating new technology and leading is fun, but the money lies in services. Think of hundreds of billions made by the likes of Accenture, Deloitte, Infosys etc. Do you think tech firms can and should be able to run such businesses? For example Pytorch is great..why not monetize in services and replace vendors in fortune 500 with skilled staff from Meta?
There aren't enough high quality engineers, and they're certainly not interested
May be in the past! But ask any of those 11k laid off people and they would probably hang on to a job than be picky about projects. I feel leadership is big tech firms are outdated and too much ego that's driving this downturn.
Welcome to the world of Big Tech… What do you think “Sales engineers” at companies like Microsoft, Oracle, Salesforce, Google, Amazon etc do?
Each business has its own skillsets. MSFT might be good at making Enterprise products but bad at consumer products. Consultation firms' mindsets are very laser focused on maintaining customer relationships at any cost to employees etc but other companies might not do that way. There are a lot of unproductive tech wise but compensated with soft skills with maintaining and operating an existing system. It's not that big tech hasn't tried this line of business. Industry solutions, business applications etc are just a fancy named orgs for the work that WITCH companies do. They just fail because they don't have that necessary attitude and skillsets.
Great insights. Thanks makes sense
Margins for service business is far less than a product business when done at scale(don't be fooled by the service margins of apple or other software subscription products), I am referring to support, implementation and integration services. As a fact check take a look at the valuation multiple(P/E or similar ones) between a mature product and services company you will have the answer. That being said a lot for companies that still do service support take a look at the likes of oracle, sap, Salesforce etc but the cost of support(cost per ticket is 2x more than US consulting firms and 3-4x than that of Indian IT firms like TCS, Infy and so on). These bigger product companies can't compete on the price and scale of these service firms. I hope that I answered the question
Like the shitty consulting firms but not shitty? 🤔
Exactly! In a glorious way in style..lol