After Dell's purchase of Perot Systems last week and Xerox's buyout of ACS (Affiliated Computer Services) yesterday, there seems to be a general feeling that India's IT giants are being caught with their pants down and are slow on the uptake. Err, excuse me, but it's precisely the opposite that has happened. The Indian "global delivery" story coupled with the Chinese manufacturing machine is in fact what has kicked off this acquisition spree. The offshore meteor hit the industry and all the dinosaurs hadn't yet grown wings!

Dell was the famous "one trick pony" (HP's former CEO Carly Fiorina made this phrase famous in a speech) with the legendary efficiency formula: no offline retail, assemble and order online, get tech support 24/7 on the phone, forget the frills. The problem of course is that this may give you a headstart, but efficiency can take a business only so far. The others will catch on and learn quickly, which is precisely what HP, Apple etc. and now the Taiwanese and the Chinese are doing. Ditto for Xerox - the original hardware giant! They practically invented the personal computer before giving it away on a platter to Apple and Microsoft in the 70s and never seem to have recovered. After seeing IBM and HP completely transform themselves into services companies, the rest are bound to follow suit.

Then there are the software services dinosaurs. EDS (Electronic Data Systems), ACS and CSC (Computer Sciences Corp) were the 'big three' for the last two decades. As in countless other businesses, it's always the ruling incumbents who are the slowest to adapt when change sweeps their industry, since they're always hanging on to the models that made them successful in the first place. While IBM, HP and Accenture rapidly built India offices to power their global operations, the big three were slow to react.

EDS barely had a presence in India when it lost its ABN Amro contract to the multi-vendor, multi-geography consortium that included TCS, Infosys and Patni in 2005. After that shake-up, a late scramble to grow inorganically by acquiring RelQ and then mPhasis proved to be too little too late. HP bought the struggling giant last year and in fact formally dropped its name just last week. The other company that Ross Perot built (after selling EDS) - Perot Systems - set up shop relatively early in India, but stuck to a joint venture with HCL a tad too long before going it alone, largely to the Indian company's advantage.

As recently as December '08, ACS was still talking about adding a 1000 to their India headcount, taking it up to about 5000. To give you some perspective, IBM's will touch 1,00,000 this year. CSC is marginally better off thanks to its 2007 acquisition (again a scramble) of Covansys giving it about 20,000 people in India but the company was still jittery enough after the Xerox-ASC deal to issue an "anticipatory no-comment"! The two European biggies Cap Gemini and Atos Origin are also playing catch-up, though the former was quicker on the uptake with its 2006 buy of Kanbay while Atos is still relatively tiny in India. The writing is on the wall - or rather, the data is on the spreadsheet. If you're not big in India, you're not going to survive!