Across India, tens of thousands of coders on the rolls of marquee Indian IT service firms are moonlighting, after work and on weekends, for clients halfway across the world. There’s also a new set of companies connecting these moonlighters with customers.
San Francisco-headquartered Appirio, backed by Sequoia, General Atlantic, Saleforce.com and Fidelity, wants to help enterprises ‘crowdsource’ talent for IT projects such as building mobile applications.
Appirio has over 900,000 coders on its platform and almost 200,000 of them are based in India, CEO Chris Barbin told ET. The company has added 50,000 coders from India so far this year.
“Not all of them are active. We have about 30,000-50,000 active coders in India. And most of them have jobs at Tata Consultancy, Infosys or Wipro and do this on evenings and weekends. A few people make a fulltime living freelancing, though,” Barbin said. Appirio’s clients read like a who’s who of large companies – Starbucks, NYSE Euronext, Honeywell, AIG-Edison, Toyota and Facebook.
The Indian IT-BPM industry employed about 3.5 million people at end of FY15, according to the National Association of Software and Service Companies. Freelancer are paid by the hour, while the more experienced ones prefer to be paid per project.
“I used to freelance while I worked too. Then it becomes a question of budgeting time. I used to only work two hours a day on my freelancing because otherwise I would not have a life,” said Praneeth Chinta, who quit his job at Informatica earlier this year to freelance fulltime.
Freelancer.com said India had the company’s largest pool of freelancers in Asia and most assignments are IT projects. “Six of the top 10 projects awarded to Indian freelancers are IT projects…Many freelancers find that working together in a team is an effective strategy,” Kyri Theos, regional director for Asia-Pacific at Freelancer.com, said in an email.
Since they can bid and get work through the Internet, freelancers come from all parts of the country, including small towns. “In terms of number of freelancers, India ranks as follows: Bengaluru, Hyderabad, New Delhi, Mumbai, and Chennai. However the fastest-growing cities are Surat, Rajkot, Indore, Jaipur and Ghaziabad,” Theos added. The trend has been fuelled by IT companies increasingly setting up centres in tier-2 cities such as Indore and Jaipur.
While IT companies have policies to prevent moonlighting, catching them isn’t easy. “This would be a fraction of the total employees. And most companies have strict policies against this kind of freelancing, but it’s hard to catch if it is being done on the weekend or at home,” an executive with an IT company said.
TCS said its employees sign the Tata Code of Conduct which prevents them from freelancing for competitors, but declined to give further details. HCL Technologies said employee contracts forbid freelancing. Wipro, Infosys and Cognizant declined to comment. Tech Mahindra did not respond to a request seeking comment.
Nasscom said that instead of preventing people from freelancing, companies would need to focus on confidentiality issues. “It is very important to tell the employees that you cannot go on to these open platforms and say you did a certain project for a certain client at work,” said Sangeeta Gupta, senior vice president at Nasscom.
The million dollar question is: Will companies that crowdsource talent steal a march over Indian IT service firms? Few see the new model working for developing large in-house IT systems, still the bread-and-butter of Indian IT, but it can chip away at smaller projects.
While sales chiefs at IT firms say they see Appirio in a few deals, the company is not yet a threat in the kind of digital work that is expected to power the next phase of the industry’s expansion. “A lot of the digital work requires a consultative approach. That cannot necessarily be provided through a crowdsourced model. It would work for the more IT-modernisation type projects,” Sudhir Kulkarni, global head of sales and marketing at Persistent Systems, told ET.
For the freelancers, life isn’t exactly a bed of roses. Occasional payment problems and underbidding from fellow moonlighters – some willing to work for as low as $5-8 an hour – crop up.
“I might consider moving to fulltime freelancing since you can choose the projects you want to work on and the money is good. But finding opportunities for a sustained period of time is a challenge,” said an employee with a mid-sized IT firm who has been freelancing for two years.