The Hindu Business Line : Indian IT cos increase focus on domestic outsourcing

Bangalore April 29 It might not be a cakewalk anymore for the large MNC players in the Indian IT outsourcing market. As large deals begin to emerge from the Indian market, homegrown IT services firms are seen upping the ante in their own backyard.

The top-tier Indian IT vendors, who had largely shunned the Indian market for want of lucrative prices, are now seen aggressively bidding for domestic deals.

As these firms make it big in the global IT arena, the share of revenues from the domestic market is also on the rise.

The `total outsourcing' deals, wherein the engagement spans segments such as consulting, software development, hardware integration and infrastructure management, among others, are beginning to catch up especially in the banking, finance and insurance and telecom verticals.

So far, MNCs such as IBM and Accenture dominated the Indian IT market, winning mega deals from companies such as Bharti, Dabur and Idea Cellular.

But they are seeing increased competition from the Indian vendors.

"We have signed up 50 per cent of the 20-odd outsourcing deals decided in the Indian market in the past two years," said Mr Suresh Vaswani, President of Wipro Infotech. Major wins for the company include deals from HDFC Bank, Dena Bank, Colgate Palmolive, Yes Bank and Sanmar.

Satyam has started bidding for lot more deals in the domestic market than it used to earlier, according to Mr Virendar Aggarwal, Director and Senior Vice-President, Asia Pacific.

"While the rates in the Indian market are definitely lower than anywhere else, we cannot afford to ignore allowing MNCs to take our own backyard," he added.

Satyam, which claimed to have witnessed tremendous momentum in the Indian market, has even started partnering with MNC vendors such as IBM on a case-by-case basis to pitch for domestic deals, Mr Aggarwal added.

The company's share of revenues from the domestic market has gone up to four per cent in the past three years, from zero earlier.

Satyam registered 52 per cent year-on-year growth in domestic revenues to Rs 297 crore.

Wipro Infotech, the IT arm of Wipro Technologies focused on India, West Asia and the Asia Pacific, recorded 46 per cent growth in revenues to Rs 2,483 crore for the fiscal gone by, of which about 91 per cent came from the India market.

TCS derived nine per cent of its total revenues of Rs 18,685 crore for the year from India.

This amounted to Rs 1,681 crore, a 1.5 per cent growth over last year.

Infosys derived close to Rs 197 crore (Rs 162.5 crore) from the Indian market, which accounted for 1.5 per cent of total revenues of Rs 13,149 crore for the year.

Various estimates peg the size of the Indian IT market at $12 billion, with an annual growth rate of 22-25 per cent.

Gartner estimates the global IT market at $1.1 trillion, with a growth rate of 4-5 per cent.

The India IT market grew at over 26 per cent in 2005 (including domestic BPO-ITeS), providing tremendous opportunities for IT and telecom vendors and service providers.

In 2005, India was ranked as the 18th highest IT spender and is expected to move to 13th position in 2010.

More Stories on : Information Technology | Outsourcing | Software

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Japanese cos in India upbeat on biz prospects for 2007: Survey

Another green battle ahead?

Indian IT cos increase focus on domestic outsourcing

GAIL may infuse more funds in Dabhol project

Sugar companies report lower profits, dip in sales

Congestion afar, `loads' of problems at home

Metals make gains on weaker dollar

Positive sentiment may continue

`Index movements are relatively insignificant'

`India needs to focus on labour law reform'

e-filing of returns mandatory for partnership firms

Public issues may raise Rs 2,500 cr by June

Airlines catch `em young