Product or Service Based Company : Where would you like to work???

I had been working in a service based company for the past 21 months. One thing that always kept me thinking was "Am I in the right kind of company doing the right kind of work!!!!!"..

Lets first start of with the major service based companies in INDIA... Service Companies have an attrition rate of atleast 10-15% percent every year..For a company with 70,000 employees an attrition rate of 10% will count for 7000 employees!!!! Its a very huge figure.

Check this article..its very interesting ....

http://infotech.indiatimes.com/articleshow/925121.cms

One of the primary reasons for attrition is the pay scale. A Service based company gives you a pay of 3 Lacs p.a for a fresher and a product based company for the same job profile you could get a pay of around 4.5 - 5 Lacs p.a ..In addition to this difference in pay scale you get a lof of other benefits..bonus,holiday packages..etc all because a Product based company has lesser number of people and are more people oriented..

An Important perception that comes in is "I am doing the Cream of the work"...I felt that the product do give the simple work to the services company and the cream work is done by them...Is it true???? Still thinking...

Money comes in next if your satisfied with the job you do..I am ready to work for a lower package if my job gives me the right kind of exposure and I am able to answer these question "What I am doing? Why I am doing? and the Application of this work that I am doing"..The major difference I see in a product based company is that they are working in the complete application/coding and hence the people around there would be able to help you and give answers for these abstruse questions whereas we in a service based company will be able to answer those questions put to us in pre-application. Lets take an example of a simple SOC a system on chip..we have many modules working with different applications inside of it. We as a Service company look at the work from a verification perspective and not from an application perspective. I do know what each module does inside the SOC but do I know how it works in the actual application???? NO!!!! This is where I find a major difference in between a Service and a Product based company.

The technical challenges and innovation will be similar but a services company does not own the intellectual property and also does not take the responsibility of the success of the idea. This responsibility makes a product company special because it makes long term revenue for the company. I do not know a lot about services industry but have heard they also depend a lot on price competitiveness..

""A product company uses its people to create intellectual property.

A services company rents its people out so others can create intellectual property.

A product company takes a $20/hour Java programmer and uses her skills to create a $20 million product.

A services company takes a $20/hour Java programmer and rents him out for $25/hour.""

Despite the advantages in a product based company..it has some disadvantages also.. The major disadvantage being the ROLE I play in the Product based company is mostly going to be fixed throughout my tenure but in a service based company the ROLE is flexible...You will be exposed to the various technologies around the globe since you are working for different customers..

The other major diasdvantage in a Producy based company is that I design a chip thinking its going to yield a billion dollar business..The service company has done the testing the Product company has finally verified and launched the product..What happens if my chip doesnt sell????? For a service based company it means nothing but a client lost or in trouble and catch a new one but for a product based company you are loosing out a billion dollar revenue and the future looks bleak and you could well end up on the wrong side " Your Fired !!!!"

Well after these arguments what I see is I am in a metastable state not knowing whether my flip flop will yield a 0 or 1 in favor of these companies..

http://www.newdelhitimes.org/archives/2007/05/the_product_com.html

P.S..All these are based on personal opinions