IT companies that rely on testing services, routine support and maintenance projects and infrastructure support are likely to see a decline in demand due to automation.
The emergence of artificial intelligence, machine learning and advancements in natural language processing will also take a toll on some companies in the digital technology space.
However, it is early to speculate whether the IT companies will adapt and survive or lag behind and become irrelevant.
One thing does seem to be certain. Large scale job creation and hiring is going to be a thing of the past and revenue is no longer going to be a function of headcount, rather a function of value creation.
Companies that focus on the right areas still have an option to thrive.
As an end note, I have been hearing that legacy technologies are nearing their end for the last 15 years, but they have not yet gone away.
So, anyone who attempts to speculate the future of technology must also be prepared to eat humble pie.
Another aspect is the longevity of the career once one joins an IT job.
Let us look at IT services companies that make up for the major chunk of IT jobs, rather than product companies and in house IT jobs.
Most work done by services companies does not require application design or architecture skills. A lot of it can be done by people with a good understanding of the domain and a decent understanding of technology. This is generally found in the three to five years experience level. There might be a need for someone with five to ten years experience to lead the team and have a holistic picture of the project. But such roles are limited. This makes it difficult for a lot of people to continue in the technology steam after about eight years of experience. They then have to move to the management stream.
IT companies have realized that the middle management is becoming overstaffed and have gone for a lean model by eliminating the excess flab either by way of layoffs or through restructuring.
The increasing wages are also causing the cost of outsourcing to India to go up and making outsourcing less profitable compared to a decade ago. In order to keep wages low, companies have started recruiting science graduates instead of engineering graduates at entry level. Such methods will only increase going forward as the objective of any business is to maximize profit. If employees are willing to compromise on salary, maybe even agree to a salary cut in order to stay competitive, companies may be willing to retain them. I am keenly watching this trend as it is not prevalent in the industry today. I am sure at least some people, especially those who would like to continue in the technical stream, would welcome such an option from companies.
Another aspect is the flexibility of young employees compared to people with 10+ years experience. Younger employees have lesser responsibility at home as many would not have a family yet. This allows them to spend more time in office and get things done. This is not to be confused with productivity. However, people with 10+ years experience most probably have a family that needs to be taken care of, more responsibilities and more frequent days off work.
All this means that companies prefer the one to eight years experience range the most for technical roles. They get the best value for money from employees in this experience level.
So, in order to survive in an IT services company after 10 to 15 years of experience, you either need to move into an architect role, move into the management stream, be willing to compromise on salary or find a niche, like domain or process expertise, that adds value to the company.
The points above may not directly apply to product companies as they do need people with excellent technical skills at all levels. They would also prefer to retain talent that has worked on their product and therefore have a good understanding of the product itself – features, customization and so on.