For example, the travel vertical has started seeing a rise in ticket cancellations and refunds, which has led service providers like WNS to greater conservatism on revised guidance. Hexaware stated that delayed decision-making is spreading out from BFSI to travel, and it has now reduced its annual growth estimate from 24 percent to 7 or 9 percent. Sasken is now cautious about telecom handset segment as all the top-five handset customers are seeing a slowdown in sales (a u-turn from Sasken's bullish stand on this segment a couple of months ago).

So, suddenly all players are chasing a smaller market, in which there was little differentiation amongst players anyway, and it will lead to pricing pressure, reduced profitability and less growth.

It will also become difficult to generate new business (unless driven by price), which will result in generic and inefficient players rightfully getting wiped out of the market. Rather than getting upset about it, I think it's an exciting opportunity for service providers to innovate and build their differentiators. Customers, I would say, have never had it so good-they can finally be in the driver's seat.

It's also difficult to accurately quantify the business value of offshore outsourcing. At a theoretical level, it does make sense. At a headcount level, it also makes sense. But at a business outcome level, the real and hidden costs are often ignored and many companies are left thinking "hey wait a minute, I offshored hundreds of my staff...why isn't my profitability increasing?" And despite share of offshoring rising, why haven't we ever seen a reduction in IT spend? That's because offshore outsourcing has so far focused on headcount as the currency, not the business value generated. That is about to, thankfully, come to an end.

The more I think about the full value chain, the more intrigued, and sometimes scared, I get about the full impact. TCS has reduced its annual hiring estimate by about 30 percent, already reduced headcount in IT services last quarter, Polaris has resorted to just-in-time hiring, is visiting fewer campuses...what does it mean for the employment market in offshore outsourcing countries? Will wage inflations ease off? Will attritions finally come to manageable levels? Will being skilled come back in fashion compared to just having an IT diploma/degree? We'll have to wait and see...