Looking back on another year just gone, it is interesting to note the increasing extent to which the global IT industry and its end-users are building upon the capabilities of Indian IT companies. Furthermore, 2006 is likely to see Indian vendors continue to cash in on this trend.
A trend towards increasingly leveraging the skills of Indian IT companies has emerged.
A memorable snippet of advice for insight-seekers is always ‘follow the money’. Look at the recent investments of some of the largest IT software companies: Microsoft, Intel, and Red Hat would all like to think of themselves as innovative and forward-looking, and have committed to develop their resources in India upon scales that are significant for their respective companies.
Often, it is the Indian services companies’ outsourcing wins that grab most media interest in the country’s IT industry activities, and certainly their ever-increasing profile with large customer companies leads to software companies seeing them as valuable partners. Tata Consultancy Services (TCS), the largest of India’s ‘big three’ services vendors, now has a partnership with SAP to provide solutions to the manufacturing sector.
TCS provides a singular example of the reach of the Indian IT companies via its recent acquisition of Chilean business process outsourcing (BPO) outfit Comicrom. This is a region in which TCS already has significant IT outsourcing operations, and the company’s maturity is a likely basis for successful integration, and strong growth if the Latin American BPO market starts to take off.
The sum of the present is as follows: the largest Indian services companies are poised to join the top echelon of their market segment; the world’s largest IT companies can’t afford to miss out on leveraging the skills and cost advantages Indian labor offers; the increasing trend towards outsourcing discrete tasks rather than end-to-end husbandry plays right to the strengths of the Indian companies; Indian companies are proving highly adept at increasing their geographic coverage so are faring well against competitors in new low-cost countries; and, last but not least, the rapidly-growing home markets of Indian companies are a significant potential source of business, within which they are well-placed to achieve wins.
We are likely to see more acquisitions by the Indian services companies in 2006. For example, the European market is ripe for consolidation, and Indian vendors will no doubt be eager to continue building upon their recent outstanding levels of growth.
Source: OpinionWire by Butler Group (www.butlergroup.com)