The old legend about Michelangelo speaks about the master sculptor’s ability to visualize his masterpiece in his mind and then chip away at the stone till all the unnecessary stuff has been eliminated and the dream is realized! A month of mixed results from the software exports industry has shown that many new winners will emerge in this decade and it will be those who are able to repeat the Michelangelo magic! Where is the unnecessary fat that the industry has accumulated over many decades of success? Some of the obvious ones are the propensity to put too many resources to backup the billable teams on a project, the temptation to put over-qualified members on a team for a job which could be done by lower cost resources and the willingness to accept rework as a necessary aspect of software development. The less evident ones are the tendency to let the creative score over the practical and permit too much experimentation on the path towards meeting contract goals. And on a firm level, the proliferation of technologies, services and even vertical domains in which sales persons are allowed to play resulting in many contracts that are sub-scale but still need as much managerial supervision as larger simpler business opportunities. As the cost environment becomes tougher and economic conditions make business volumes and pricing tighter during the year, successful sculptors of future firm and industry fortunes will have to make some strategic shifts to keep their plans focused on the goal of profitable growth. Prashant Kale, Strategy Professor from the University of Michigan spoke in a recent seminar about the need to choose differentiation or cost as the focus area and avoid getting “stuck in the middle” in the hope that customer intimacy could be a formula to build higher and healthier revenues. The industry results have shown that in the top echelons, TCS is emerging as a clear winner with Cognizant IBM and Accenture continuing to provide the global challenge by playing the India card as well as the local incumbents The mid-tier race is still wide open with at least eight firms – L&T, Mindtree, Hexaware, NIIT, Persistent, KPIT, 3I and Zensar jockeying for position in the 1500 to 4000 crore revenue segment. The jury is still out on which strategy is the best for profitable growth – KPIT with its single minded focus on Auto Manufacturing and Persistent in the Product Development & Engineering space or some of us with aggressive plans in the Application Projects & Infrastructure Management space. However, the fact that business inflows continue unabated for all of us demonstrates that there will be many winning strategies that we will see converted to perfectly sculpted top and bottom lines. The battle lines are being drawn in the new business environment and the next three quarters can raise some new questions and provide a number of new answers!