Infosys shares drop to 10-month low as whistle-blowers target CEO
bloomberg.com> The allegations “could severely damage the company’s pristine brand if true, especially in the IT services industry,” Bloomberg Intelligence analyst Anurag Rana wrote
Bloomberg must have a different definition of "pristine brand" than a lot of programmers I have met.
It has a pristine anti-brand for me. Seeing InfoSys involvement is a signal to "stay away".
It's gotten really bad. There are whole swathes of companies that we deal with that are great if you can deal with their first-party people, but we're just part of a bundle of services provided to that company through a big Tata/Infosys/Cognizant/etc contract. And that part of it is incredibly toxic.
I think if I get another email with less than a sentence describing a problem, no screenshots, nothing, ending in "do the needful", or a high-priority meeting invitation sent at 7 am for 8:30 am, with no agenda or any indication of what is going to be discussed, I'm going to come unglued. The communication and organizational skills of the project managers I've dealt with leaves so much to be desired that I can't even express it, and there always seems to be such a swirl of people with ambiguous authority involved that just trying to mentally keep track of an org chart is a struggle.
I just groan when I see that we've gotten a new lead; it may pay the bills, but I'm not sure the grey hairs and indigestion are worth it.
Programmers do not hire Infosys. Senior management does and their reputation is different there: those complaining programmers are just trying to protect their turf, the cost savings are compelling, etc. and there are a million ways to spin the inevitable failed projects.
It is very profitable as a company and brand, keeping other concerns aside.
Brands aren't determined by how much wall street loves the firm, but by how much customers like the firm. In the actual industry it's in -- that of H1B visa mills -- it doesn't have a particularly good reputation for producing good code. It also has been plagued by scandals in India, and has a poor reputation in the eyes of immigration authorities as well.
Who are the most highly regarded of the firms in Infosys's field?
I realize that might sound sarcastic, but I mean it sincerely. I have little experience with that world, but I wasn't aware there was a hierarchy of brands in the offshore consulting firm space. Now I'm curious
None of the big firms are well respected. The problem here is that if you are outsourcing software development, then you view it as a cost to be minimized rather than as something you care about. That means most of your projects are not interesting to work on, so these firms tend to have big turnover problems with talented staff. A lot of their work is keeping products alive in maintenance mode, for example, so that the vendor can claim that something is still supported in order to meet contractual commitments, but really they don't want to keep investing in the product. Consultancies are the hospices of dead product lines.
Real engineering innovation doesn't happen in this space, and there is so much innovation going on right now that if you are a talented developer you can do a lot better than work for one of these firms. If you are an overseas developer, you are much better off getting hired directly by a tech company to work on their products with an H1B than by going the Infosys route. There just isn't the surplus of talent claimed to staff these companies, and if you are unlucky enough to be a smart, driven developer working for one of them, you will end up bored out of your mind.
But at the same time, there are some excellent boutique consultancies, mostly small sized, with truly talented people, who decided to strike out on their own or in small teams. But again that's not a business model that scales to create massive consultancy behemoths. I know of a few, but they are colleagues who decided to work for themselves, it's not a brand you would have heard of.
This is true even for blue chip firms like IBM, whose consultancy business also has a terrible reputation for overcharging customers and not delivering what was expected.
Joel Spolsky has a great writeup on this phenomenon.
https://www.joelonsoftware.com/2001/01/18/big-macs-vs-the-na...
Mike was unhappy. He had hired a huge company of IT consultants to build The System. The IT consultants he hired were incompetents who kept talking about “The Methodology” and who spent millions of dollars and had failed to produce a single thing.
Luckily, Mike found a youthful programmer who was really smart and talented. The youthful programmer built his whole system in one day for $20 and pizza. Mike was overjoyed. He recommended the youthful programmer to all his friends.
Youthful Programmer starts raking in the money. Soon, he has more work than he can handle, so he hires a bunch of people to help him. The good people want too many stock options, so he decides to hire even younger programmers right out of college and “train them” with a 6 week course.
The trouble is that the “training” doesn’t really produce consistent results, so Youthful Programmer starts creating rules and procedures that are meant to make more consistent results. Over the years, the rule book grows and grows. Soon it’s a six-volume manual called The Methodology.
After a few dozen years, Youthful Programmer is now a Huge Incompetent IT Consultant with a capital-M-methodology and a lot of people who blindly obey the Methodology, even when it doesn’t seem to be working, because they have no bloody idea whatsoever what else to do, and they’re not really talented programmers — they’re just well-meaning Poli Sci majors who attended the six-week course.
All of the firms in Infosys's field are the running joke of the software engineering world. There is literally not one of them viewed in a positive or even neutral light. And yes, there is a hierarchy of brands in the offshore consulting firm space and the Indian consultancies are the bottom of the barrel.
I actually know of a Peruvian consultancy (HQ in San Francisco, but devs in Peru) that pays devs 20 bucks an hour to crank out business logic code for firms who have no tech competency and are willing to spend 4-5 figures to build an intranet or write some db logic. There are lots of shady players in this industry. The number of businesses who would benefit from some onsite scripting or automation is huge, as is the number of customers who get fleeced by these outfits and are stuck with unmaintainable code and need to keep sending regular checks to the consultancy to keep things going.
And don't get me started on the security of the code these outfits produce.
Maybe. But profitability does not imply "pristine".
Infosys had a reputation as one of India's most transparent companies. Reputation is somewhat a nebulous concept so I am going to use a proxy: P/E ratio [1].
According to theory, investors pay up a premium PE for well managed companies and although it is an imperfect measure, lots of evidence suggests that it works (Look up HDFC Bank in India relative to its peers or government owned companies v/s their private counterparts) In India at least, Infosys had always had a premium PE compared to its peers [2]. So the "pristine brand" may have been with the investors.
[1] https://www.macrotrends.net/stocks/charts/INFY/infosys/pe-ra...
[2] https://www.motilaloswal.com/article.aspx/1202/How-and-Why-t...
I think its mainly in terms of the bean counters /boards of companies that out source.
Though of course it might make developers wary of joining a company with accounting discrepancies like this.
I have only ever run into dealing with InfoSys' services (back in 2011 or so they provided the entire media / marketing / advertising tech stack for Diageo, called Neo at the time).
Complete black-box. Impossible to work with. Impossible to get documentation. We literally had to debug via crash reports delivered to us every 24h. Of course it was ALWAYS their machine images somehow differing from their environments, so our tests passed locally and then failed in their black box.
Horrific performance problems (think services locking up at 200 concurrent connections...for mobile apps, when advertising-apps were still a thing. Released across virtually all pubs in a whole country. You can imagine how that went).
Of course they would continuously blame all their issues on the company I worked for at the time. And Diageo even fought tooth and nail to defend them. We had to waste an insane amount of resources just proving to them that their system sucked. Easily one of the worst examples of a company wasting huge amounts of money, thinking that outsourcing would save them money. It's so stupid.
I worked with them on crown royal.com and everything you say is 100% true
Nothing ever worked and their technical stack was an absolute joke.
Eventually the agency lost the business due to not delivering, which was solely due to their platform not doing anything promised by infosys.
None of these companies - Infosys, Tata, Wipro etc - actually has a business beyond convincing technologically illiterate Western senior managers, by whatever means, to outsource the core of their businesses for short term gain.
Thing is, they are very good at the sales part.
I worked for a small IT company that serviced only a handful of clients, but had done so for several years. We got bought by one of the big outsourcing firms, and in a remarkably short time they were winning large new projects from our customers - we could never have convinced them to part with so much money!
All of the projects we run have a mix of western and Indian people, a mix of onsite and remote. There are always several manager types involved in nebulous ways that nobody understands, and there are always random Indian devs based in India who the client pays for, but they literally do nothing.
Short term gain being firing their in-house IT staff, only to realize they're stuck in a 5-year contract.
Couldn't agree more.
I can't help but notice the bias people from the west tend to have against Indian outsourcing companies. They have issues and downsides, sure. Major long term downsides, as an Indian programmer (not working for any of these companies), I agree (just like outsourcing to ANY company, be it American e.g. Cognizant).
Comments talking about Infosys/TCS, not being a brand: programmers are not Infosys' customers, in fact it's quite the opposite of that. Infosys' services replace programmers for their customers, who are non-technical managers who want to abstract the IT part of their projects and not be taken for a ride by technical people (not saying that all of them do, but a lot of times engineering department heads demand HUGE budgets to just become more important) and managers feel that a dependency like that makes it necessary for them to be obedient.
Just because they have downsides, does not mean that they are not brands. Infosys has innovation labs in universities all around the world. They award the Infosys prize to the tune of $6.5M to scientists for research. TCS is a strategic partner for projects like the British Rail Network.
I actually view Indian outsourcing firms to be firms that trade human hours, which turns out, are a lot cheaper in India. Maybe POTUS should actually impose duties on importing software too.
Update:
I also agree with fellow developers on the fact that these outsourcing cos. produce bad code and documentation and usually result in a net loss for organisations where technology is in inherent competitive advantage.
However, these downsides are not because of the lack of skill. It's because of the nature of project based model that outsourcing firms follow. If anyone is to blame, it's the myopic or misconstrued managers who employ them for projects where outsourcing is not the solution.
However, there are many applications where outsourcing firms do just fine. And hiring a separate engineering department could be a risky alternative.
I would agree if Wipro, Infosys, Tata, Cognizant and HCL were in the business of offering up skilled people that they have promised to clients. But every single one of my clients who engages these companies has a story where they were sold X cloud or devops or security people and the people put on their engagements had 0 experience.
I've moved into a consulting company that has an offshore branch and it's the same thing. And the managers overseas want to charge me expert rates while I have to train up their staff on the basics of how to do their job. And I mean the ABSOLUTE basics.
I really don't see how it's not fraud.
There's probably barely any big consulting firm or bank that does not have offshore mega offices (in India) where a lot of important work happens in equities, commodities, etc. Citibank, BOA, PWC, you name it. All employ tens of thousands of people in India.
Even tech cos. like Amazon are hiring their next wave of knowledge workers offshore.
It's not like the offshore heads can force anyone to do so, or the Indian government is providing huge incentives (like for manufacturing in china). It's because the decision makers believe doing so is the right thing. If it's anyones fault, it's the heads of these organisations that are to blame, for prioritising perceived cost savings over what their own workforce thinks or does.
Having a great sales pitch and not being able to deliver is not a fraud. It's something that companies trying to bite more than they can chew often result in.
Also, I agree that having to teach your offshore counterpart how to do their job is absolutely ridiculous. It makes me wonder, how selfish can these corporates be, that they prioritise their profit or share price or bonus, over their own workforce.
>Having a great sales pitch and not being able to deliver is not a fraud.
When you do it over and over and over again it sure starts to quack like the fraud duck.
In that case their customers should be aware of this by now and they should be out of business (maybe soon).
I have worked for two of the Big 4 consulting firms, in security domain. They have the same story - they promise client to provide resources on subject A and B, ask the ones who have less project to learn subject A and B (these resources are expert in subject X and Y, but since the client wants A and B - they are asked to learn that in a day or two. I have seen many colleagues going to the client location, searching on Google "how to do A" in the morning and then provide some PPT with basic information.
Currently working for an American software dev company.
What I mean to say is, the issue you mentioned is not limited to these 5-6 companies, but for the whole IT industry.
No direct experience in a given tech is ok sometimes, if they have transferrable experience (i.e. ansible to chef, cloudformation to terraform et al).
Having no experience on any cloud platform and being sold as an expert however is a different story.
That's a common problem across all big consulting companies, it's not specific to India.
I think the real problem is that many of these corporates haven't realised how important IT is to their business. The idea that a bank should outsource development is ridiculous, most of their interaction with customers is going to be through these systems. If they want to differentiate themselves from their competitors then they need strong IT.
> The idea that a bank should outsource development is ridiculous, most of their interaction with customers is going to be through these systems. If they want to differentiate themselves from their competitors then they need strong IT.
I agree with this too. However, this arises 2 doubts in my head:
1. Is Apple outsourcing manufacturing to Foxconn any different from banks outsourcing their IT?[1]
2. Is hiring offshore talent the same as outsourcing? Can the talent still not be in-house and the company be a multinational?
[1] Yes, it is because a lot of times firms outsource their entire IT/System design to these outsourcing firms too. And this is because of lack of knowledge from the manager's part, laziness or just greed. But it is still comparable because they both have certain shared downsides in the long run.
Foxconn has a very direct impact on Apple's product, so any issues with quality would come back to them pretty quickly. Foxconn also has an ongoing partnership which I would expect to be worth a lot of money to them.
On the other hand, everything I've seen so far outsourced in IT in a standard way could come back in any condition. Worst case, it's unusable, but contractors get paid anyway and move to the next client.
Regarding Apple, they seem to have a very close and special relationship with Foxconn in order to ensure the quality of production. So while it is a similar arrangement, it seems very different to me.
Basically all of the offshore devs I've had the pleasure of working with are at the very beginner end of the spectrum, bar one or two. Even had to teach a "senior" developer how to write a unit test the other day... it's ridiculous.
Here is an anecdote which might help you understand why.
One of my classmates joined infy out of college. His job for the first one year was - email the list of files changed in the day to the client. This friend was called newton in the college, one of the smartest person around. And he was doing one of the most boring job. Client was paying more than 3000 USD per month for this. Of course he automated the work on second day, used time to study for CAT and left to enroll in IIMA.
Not implying that there isnt anything good with these big companies, but there are lot of such stories. This particular one sounds more like defrauding the client more than anything else to be honest.
> used time to study for CAT and left to enroll in IIMA.
For those of you who don't know about CAT: think GMAT but with 200000 people appearing for it at the same time-frame (maybe a 15 day window)
IIMA - Harvard equivalent in India. Only about 400 people out of 200000 make it to IIMA.
If you consider overcharging (perceivably) to be akin to defrauding, then a lot more doctors, pharmacy cos. and lawyers are defrauding clients than outsourcing cos. Even though the repercussions of them defrauding their clients is a lot higher. Also it's a fraud because of the oaths they take, of which outsourcing cos. are obliged to take none.
Given how it's such a common thing that it doesn't surprise anyone on the engineering side of things, I'd expect that the corporate management would've wised up to this already. This makes me wonder if both sides of the deal are in on it, and are together extracting money from the larger corporate entity.
It’s not bias, it’s experience.
TCS is a strategic partner for projects like the British Rail Network.
That project is a disaster of overblown budgets and under delivery. Like everything these companies touch. But the imaginary savings earned a few Western managers big bonuses before they quickly moved on before the chickens came home to roost.
In that case, TCS will pay a price for it in the long run.
They will not, the British taxpayers will, just as for every project outsourced to Tata, Capita, or anywhere else.
Every penny of revenue earned by those companies is by fraud.
You've got to wonder when the government continually awards huge projects to the same outsourcing firms time after time, and time after time the project is either a total failure or not fit for purpose, and it's delivered years late at a multiple of the original price. And the next big project that comes along? They'll award it to one of the same companies again, and they'll get the same outcome again.
There simply has to be some major skullduggery afoot.
The internal GDS seem to be bucking the trend, delivering good services and contributing to OSS. Surely this demonstrates that an internal team is a better way? Even if they don't deliver entire projects themselvea, they could lead them from a requirements, architect and tech perspective, and have sway over which firm gets the outsourced part.
Not sure what your definition of fraud is (for me it's more like what the British India company did). Wining a tender process that probably needs fixing (because it's obsolete) is not fraud.
Doing it with the intention of underdelivering and ballooning costs and time to make more money is fraud though. And make no mistake, no outsourcing company goes to a tender intending to be on time and on budget. It’s not good business for them.
And just how commonly do we see such[1] fraud across any business or industry?
Cough, pharmaceutical cos, doctors, social media & search giants, car manufacturing giants. Any of these ring a bell?
[1]As in, the above (your) definition of fraud i.e. misleading customers, by deliberately under delivering and over promising. With this definition, many businesses and accepted practices are fraud.
IMO, true fraud is what VW with their cheating device. Facebook did with integrating WhatsApp profiles. Theranos did with fake IP. Opioid manufacturers do by indirectly incentivising doctors. Don't you think so too?
Theranos did with fake IP
Yes, I agree that Tata and similar companies are on the level of Theranos.
Your argument is "it's not fraud because others do it"? Yes, going forward knowing full well that you have no intention of fulfilling your promises is fraud regardless of "whatabout those guys".
You have at least a dozen comments on this thread defending these practices and pointing fingers at the likes of Theranos as if that's a good justification. If someone needs Theranos to look good they must be pretty shady. Your line of argumentation sounds very biased.
That is just whataboutism. "What about this field?" "What about that cos?"
All of it is fraud. Regardless. Promising results with the intention of not sticking to it is fraud.
Infosys and TCS remind me of Uber and Lyft: business models based on magical thinking-rooted exploitation. Engineers need to form their own worker-owned consultancy co-ops and eschew corporations to capture more of the wealth they generate for themselves rather than as underpaid servants of said large corporations.
Infosys and TCS have been around for decades. If their business model was based on "magical thinking-rooted exploitation" then their customers must be real fools. Or maybe they thrive because there were huge demand for IT projects, which continue to the present time, and businesses have traditionally not considered software engineering their core competency, despite the fact that outsourcing is inherently inefficient.
> Engineers need to form their own worker-owned consultancy co-ops and eschew corporations to capture more of the wealth they generate for themselves rather than as underpaid servants of said large corporations
"Infosys was established by seven engineers in Pune, Maharashtra, India with an initial capital of $250 in 1981" [0]
$250 in 1981 is $706 in 2019 dollar. So yes, looks like they started out exactly like how you advocate.
Easier said than done, though. The problem is that potential clients aren't able to assess quality easily.
That system works for lawyers and doctors because there are bars and boards to not only vet theit credentials, but also restrict supply through quotas.
One solution might be for that coop to sell service around a valuable piece of software they own (or at least have demonstrable expertise with). Thats how the SQLite developers work, for example.
Uber and Lyft are loss making experiments. Whereas Infosys and TCS are profitable corporations, responsibly hiring hundreds of thousands of people (which they do not plan to fire impulsively like Uber), bringing in huge volumes of trade revenue to India for over a decade.
Uber and Lyft use contract workers, rather than getting people on their payroll. Infosys and TCS hire freshers on bonds at salaries that are not very high, but hire thousands every year on their payroll in a country where IT engineering programs have near 100% placements. If those engineers want to work for themselves or other non-corporates, no one is stopping them.
quality != quantity
Fair enough, I never said that they were quality. Just that they're nothing similar to Uber or Lyft.
Quantity has a quality all its own.
That said, that's probably a bad motto to have in IT.
Do you need to control how every engineer works?
If you don't want to work for a corporation, don't work for a corporation. Why do you need to tell the entirety of engineers how to do it?
Unionized workers have far more leverage in business negotiations.
That's actually a very good analogy.
My early years were in a big outsourcing firm & man everything was delayed & over budget. 3 months of development became 9 months. Projects promised in 6 months took 1 year of development. Projects with older technologies like VB - which worked quite well, code was clean were rewritten for no benefit whatsoever. These rewrites were sold by marketing people. People were overbilled everywhere.
Glad I left the Indian corporate scene & started working remotely. Now I run a small remote QA team for an international firm at 30-40% less cost & delivering at least 2x times these corporate giants.
Two things that are frequently on the HN front page, negative news about China and Indian outsourcing firms.
For good reason too.
Reputation is relative. Their reputation is good for what they do - cheap bodies who can scale up and down.
Mahindra didn’t survive accounting fraud as an independent company. This could hurt Infosys too.
You mean Satyam?
Music to my ears !!!
I see a lot of comments here attributing outsourcing firms to fraud. Let's remember that these cos. win contracts fair and square by taking advantage of myopic tendering processes.
If there's something to blame then it's obsolete tender process that make it impossible for quality vendors to compete or for outsourcing firms to make realising proposals.
Overpromising and underdelivering is not fraud. Fraud is what VW, FB and Theranos and the likes have done.
Dude, you are obviously biased and try to portray the "pure play" companies in a positive light. Stop it, you are not fooling anyone. Stop defending them, those companies are the literal cancer of the software engineering world from the most literal point of view and the people in this thread talking bad things about them are doing that because they have very good reasons to.
No. I say this again, their work sucks. And their customers are fools to hire them. Their customers' shortsightedness and greed is the cause of this cancer.
I just think it’s not fair to accuse them of fraud.
> Overpromising and underdelivering is not fraud.
It is. That's like saying selling a Merc with a Suzuki Swift engine inside is not fraud.
Is it fraud or is it incompetence?
Or selling a VW clean emission free vehicle with a cheating device.
One of the issues creating poor impressions of Indians at least in Canada nearly every resident gets a fairly regular stream of calls from Pakistan and India that are actually fraud, dealing with IT and credit cards, duct cleaning and taxes.
I think India is a challenging place to make a living and thus many people do whatever they can to make a buck, at least that is how I explain this behavior to myself.
That’s true, I get a lot of fraud calls from India too.
It’s lack of regulation, funds and a lot of other things.
You’re right though, it’s going to affect reputation for sure. Not like it’s going to make the bad actors mindful, because as you suggest, it’s survival that’s on their mind.
still doesn't make stereotyping right
If there's a knowingly broken process, both sides of it are to blame. One party for using a broken process, the other for exploiting it.
Imagine you own a store with broken locks. A thief learns of that, and comes one night, and plunders your store. Yes, you'd be to blame for being irresponsible and stupid. But the thief would still be liable for theft.
By this example, fraud is rampant across business[1], not just outsourcing.
Facebook, VW, Theranos and many many more.
Never said it isn't. Big and small. The amount of shit I've experienced myself, or had reported to me by friends and acquaintances is so large that I have a very low starting opinion on small businesses on things not strongly enforced by law. I've shared some more egregious examples on HN a few times, like a practice in grocery stores to wash stale meat with dish cleaner to be able to sell it as fresh. Yes, fraud is very much rampant across business.
Yep. It is. Fraud across the spectrum.
If you knowingly misrepresent a material fact for the purpose of inducing someone to act (E.g. give you money), then you have committed fraud. This is literally the definition of fraud.
Maybe in the your household blaming the victim when they hire a company with such a well known track-record of failing to deliver is acceptable, but many people have different values.
Are you being hired to apologize for these shitty consulting giants? Up and down this thread like its your job.
Hmm, not at all.
It’s a different matter that I don’t think very highly of them.
I just don’t think it’s fair to accuse them of fraud. W/o considering the fact that they’re from a country with a lot less resources competing for contracts that perfectly competent people reward to them.