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Indian IT Services Companies (TCS, Wipro, Infosys, etc.) are majorly involved in providing technical services to clients in developed markets (60–70% US. Remaining shared between UK, Australia, Canada, Middle east, Japan and other European companies).To understand the profit, let us first go through the business model.PBO - Project based Organizations.Projects are either fixed price(say 100K USD upon completion. Project ownership and delivery is with IT company) or Time&Material(i.e. typical staffing projects where resources are provided and work is managed by the customer). Let’s say typically there are 50% fixed and 50% Time&material projects.For practical purposes, there are many projects where the ownership still lies with IT company management, but billing done based on headcount i.e. time & material basis. (this is sometimes how the client wants it to be.)Indian IT companies cover all types of technologies from legacy Mainframe to Machine Learning/AI.Billing rates differ as per technology. Accordingly, profit margin differs too.Older technologies, profit margin is lesser but volume(revenue) is higher. Newer and in demand technologies, the opposite.Indian IT companies follow pyramid structure. Software Engineers, Senior Developers, Team Lead, Project Manager and then layers and layers of management (Senior Managers, AVP, VP, SVP, Industry Head, CXO).For IT industry, there is just one factor of production which is people. Hence more people results in more revenue and profit. Also more people in turn require additional people to manage and assist them.In a company of 100K employees, only 60–80K will be directly working on projects. Rest all will be senior management, HRs, facilities teams, Finance, sales & marketing, etc.About 5–10% will be on bench(people not currently in a project).Profit Making - How?Profit making is actually quite simple. A project would be agreed upon either as fixed price or Time and Material. Accordingly people will be deployed. In a 10 member team, 2–3 people will be working for client location(onsite) and coordinating with clients.Client will mostly know only the team directly working for them.In case of fixed price, upon meeting agreed project milestones, invoices will be generated and paid by client.In case of T&M, invoices will be made based on number of days worked multiplied by billing rate.Any issues, will be handled by Project Manager and above. Any work will be handled by team lead and below. Onsite acts as layer between offshore and clients as well as provide support for critical technical issues.The project billing would usually be not more than 30–50% of people’s salary directly working on project. Non-billable Managers, other support staff, HR, etc will be supporting large number of projects and hence their share from each project would be minimal. After spending on bills/utilities and Infrastructure, most IT companies can easily have 20% profit margin post taxes.Profit Making - Why?While most people would dismiss Indian IT Companies as body-shoppers and success only due to cost arbitrage (Conversion of USD/EUR to INR and different Purchasing Power Parity across India Vs. developed countries), there must be more to it.Indian IT industry exports more than 150 billion USD of services. This has simply come up in the past 25–30 years alone.With Gold and Crude Oil imports, IT exports are major reason why our trade deficit (difference between export and import USD) is manageable.The clients we serve are big businesses (E.g. all Fortune 2000 companies in US) and if there is a really a alternative to offshoring and H1B immigrants, they would have taken it. Besides, Client Managers are predominantly Americans. Sure H1B salaries are typically 60–80K USD only. But that’s what IT companies pay to it’s onsite employees. But the same employees are billed at 150–200K USD to clients. So No, there is no cost advantage to clients in hiring H1B instead of locals. But yes, overall as a team of 10 people at onsite and India, there will be cost advantage at project level.Besides Indian IT companies have a system that delivers as a team. Every team member in a project have clearly defined roles, responsibilities and escalation points.Sure there are bad performers, people who will take credit for other achievements and what not when you organize people in to teams. But there are also escalation points, archived emails, inter-dependencies between team members.Inter dependency is a key. A project manager looks good only when the team performs well. Team’s performance depends on motivation that the manager provides by rewarding performers with promotions and onsite. Sure there are many cases where people will claim manager is biased, not rewarding the right candidate, etc. But it’s very subjective. There are both bad managers as well bad sub-ordinates. Similarly onsite can look good in front of clients only as long as team working in India is motivated. No body can claim it’s a perfect system, but it’s a system with enough checks and balances for everybody and seems to be working.Every team member brings some thing valuable to the table, be it hard work/enthusiasm of a fresher or expertise of senior member or co-ordination and management skills, etc.I have seen so many articles and quora answers about talent of H1B immigrants. The reality is that it’s not about individual talent alone, it’s about clicking as team.And why can’t this work can be done by clients themselves?Well, in many big businesses, IT started as a subset of operations. It made sense to outsource tech operations and focus on core business. Gradually Tech itself has become important business function. Today technology and business are like Siamese twins, especially for billion dollar businesses.Come to think of it, is there are any business today that could be done without technology assistance? NONE!Hence there are huge number of talents required across various technologies.The technical work in these big businesses are neither too complex nor too simple.For e.g. I could be a java expert with 10+ years, but i cannot simply start working on a new project. I’ll have to be transitioned on the existing applications, client processes, what are the project’s requirements and how to deliver. At the same time, 2 months in to a new project, it could become routine boring job.And big companies require large number of such people working on many different technologies. It does not make sense to hire all these people directly. Since technology keeps changing, most clients routinely retire old technologies and adapt newer ones. With Indian IT companies, chances are they will have people working on both technologies.Let’s take the team of 10 people(2 onsite, 8 in India). A client will have difficulty quickly finding 10 people or say even 6 people for the given technology in a given location. Even if they do, the cost will be higher. Even if cost is not a concern, what are chances that these 6 people will work as a team and deliver projects. What if 2 people want to resign after 3–4 months. Remember the system with all it’s checks and balances does not exists at client side.The senior managers at Indian IT companies will assist team when struggling due to technical issues. They will coordinate and get the help of other team members working in similar technology. There will be internal knowledge sharing, every technology will have its own knowledge management. Team members will routinely resign both at onsite and India. It will be managed, by deploying people released from other projects, etc.Myths Vs. RealityMyth 1: Indian IT companies are useless because where is India’s Google, Microsoft, Facebook:If you have understood this answer so far, you might have guessed it. Indian IT services is in the business of back office operations of big businesses (B2B) and no where related to product or service creation to end users directly (B2C). It’s like asking why your excellent car services business chain is NOT manufacturing great cars. Indian IT services directly depend on regular cash flow from clients. In software product development, huge sunk costs needs to be invested up front which is not the business model of IT services. Nevertheless there are products like Finacle(Infosys) which are used by many banks (both Indian and foreign) as core banking system. Once again Finacle is B2B not B2C. Also many product based companies like Oracle, Microsoft, Google, etc employ tons of indians both in US and India offices. So Indians have capability, just not the right setup to start product companies. ZOHO is an Indian product company which is getting popular.Myth 2: Indian IT companies pay low salaries, highly stressful, no job satisfaction, etc.Typically there will be 30,000–50,000 active projects of all team sizes in big IT companies. What most people describe are their current experience in current project (1 out of 30–50k projects). In 10 years, i have seen, in most projects, say once or twice a year there will be stressful or hard working situations. Besides people use whining as a strategy to get better perks, salary, onsite, etc. I’m not saying IT industry is best. But compared to other industries, it is still in a better position in treating employees. Also which other Indian industry is employing 20–30 Lakh people at starting salary of 3–4 Lakhs INR which will easily reach 10–15 Lakhs INR in 10 years and not to mention onsite pay of 3–4 years in between and opportunity to jump companies to escape bad managers.Myth 3: H1B is over. No more onsite.Before Trump, IT companies were pushing 4–8 year exp. for H1B because these are mostly single people with lesser salaries and are highly motivated to earn. Now H1B is being applied predominantly for 10–12+ years experienced in higher team lead, tech architect roles. This is exactly what Trump bargained for, better quality for same Visas. Some companies are hiring locally to pacify Trump. But the issue is the same, getting specific technology talents in US in a given location is nightmare. If i’m not wrong, many of these local hires are Indians with Green cards.Also if you understand this business closely, Indian IT companies are great at Management, more than they are in technology, because that is what the big clients want any way. Client Managers need to look good and utilize the allocated budget to showcase their ability to their senior management. Remember the client managers and their bosses all of them are employees only and they are merely spending their allocated budgets to get business benefits for their employers. Hence whatever roadblocks and externalities are being thrown at IT industry, eventually it will be managed. Because IT services is more about management than about technology. As you gain experience, it’s your ability to manage people, situations, issues, clients, etc. is more valued than technology.Myth 4: IT employees need to reskill, but employees are not doing it.Big IT services companies are organized internally as per technology. For given technology like Java, say there are 10K employees with that skill. They will be part of a Java group which will have it's own head and resource management strategies. These groups are the ones that will provide people for projects in Java across the company. Now say one java employee has self-learned a niche skill like Machine Learning in R/Python. Though executive management(CXO) genuinely wants reskilling happen and talk about it all the time, middle management will view that as blasphemy. Because if you let 1 employee leave, soon everyone will want to do the same. Besides, these days loyalty is more valued than talent or merit. Talent makes you eligible for growth but loyalty is what ensures you get the deserved appraisal rating or promotion or H1B nomination. So any attempt to move away from current project or technology (even within the company) will automatically disqualify you for future career growth. Otherwise there are lots of employees who would want to reskill. On the other hand, it's not that middle management is evil. They are simply addressing the problem of ensuring people are available for the client requested skillsets. Even today, growth or client opportunities has not subsided for technologies like Java, J2EE, .NET, etc. So it is difficult to let go of people or accept the notion that latest technologies are more important than older ones. While the systems and processes required for reskilling are being built continuously, only when the demand for older technologies reduce considerably, large scale reskilling will happen.Myth 5: Bodyshopping vs Business PartnersWhile bodyshopping is the crude term invented by US politicans, some key clients actually refer IT service vendors as BP(Business Partner) and most client treat IT services as BP even if they call them contractors. Because even if the work is monotonous, the end to end technology that run's the clients business is in the hands of IT service vendors. One small oversight, one small bug that gets to production can causes huge impact to the customers(end users) of the client, affect the client reputation and in turn all hell will break loose everywhere.Hence the IT services industry is the result of years of toil in building that relationship and trust with the clients. Many Fortune 2000 clients have been continuously doing business for decades with same BPs. It's much easier to grow with existing clients than acquire new clients. With existing clients, we already know their business-technology landscape, we know thier management, business relationship built over years by onsite, the processes followed is well known, etc. Similarly, the clients would be aware of the consistency of past performances and reliability. Any new projects, the existing IT services company will always get a chance to bid. Even with new clients, it will usually be a smaller set of projects to start with and if things go well, years down the line the number of projects, people and revenue per year will grow.The premium that the clients pay is not for the technical resource alone, it's mostly for the risk management, bottom-line responsibility, consistency and reliability. At the same time, body-shopping happens too. If a client who is giving project to hundreds or thousands of your employees every year, comes to you for small project of 5-10 people for 4 months where the client will manage the work and bill you for the resource's time. Of course you will do it, both for the additional revenue/profit as well as to build the business relationship.Hope this answer paints a realistic picture of Indian IT industry.Thank you.

I worked in Amazon Hyderabad, and then moved to US. I had the option to join Adobe, but didn’t joined. My insights are -Salary:Amazon SDE entry level pay is 20% higher then Adobe. But within 2 years, the difference even widens, you will get a promotion to SDE II. And the SDE II total compensation crosses 35 lacs per annum. But the better part is you will get an option to move to US with a 3X salary.Work:Work quality depends team to team, teams which are shared with US has bad work. Teams which has it’s own charter with at least a Sr. Manager in India (L7) get more ownership and more good quality of work. Only one third of the teams are of the former category. And you can always change the team as the one year cooling period is no longer applicable.Besides, Amazon software is designed on SOA and distributed systems, that makes you employable for Facebook, Google and other non-Desktop software based companies.Food:A lot of people in this thread complain about free food, but it should not be a factor as it can be bought with less then 1% of your salary (Amazon provides 1000 Rs. of food coupons). Most of the California based companies including Adobe provide free food because their HQ provides free food. You will not see Amazon, Microsoft, Apple providing free food because their Head Quarter does not have the same policy.Cost of living:Cost of living in Hyderabad is way less then NCR region.Work Life Balance:You should not worry about work life balance at your age. Do 8 hours of work every day, and 3 hours of learning new things. Amazon has a higher learning curve, and most of the developers take 1–1.5 years to actually become fully independent. Lot of people struggle and actually give up. Amazon works a lot like a startup.

Just because it is easy (and free) to begin to learn programming, MASTERY of the ART of team programming takes years of seasoning. Employers are paying for the seasoned professionals, who can immediately diagnose and fix bugs, improve and add to functionality of an application (and do it the RIGHT way), work cooperatively in a team environment, and communicate results/progress to management in a facile, seamless manner. The better you are at these skills, the higher you will be paid while keeping in mind the market values various programming languages and aspects of development (e.g., frontend vs backend) differently.If you only remember one thing from this post, this should be it:When the clock is ticking and dollars are truly on the line, no employer will pay someone who is helpless without Google.