Western India growing into a mature market for IT services

Adith Charlie | Updated on March 24, 2011

Goa is increasingly seeing more such buildings housing IT companies.

Until a few years ago, IT services firms looked at Western India only for talent. But now opportunities in the domestic market are also being explored.

Western India is fast emerging as a prosperous hub for IT companies thanks to the rapid industrialisation and availability of skilled talent in the region.

IT bellwethers IBM and Tata Consultancy Services are bullish on the prospects of the region, and are keen to expand capabilities here, especially in Gujarat and Maharashtra.

“TCS has seen fabulous growth in the last two decades in the western region. Western India's matured economy, high industrialisation and large number of engineering, science and other discipline colleges provide ample trained and trainable manpower for the services firms,” said Mr Susheel Vasudevan, Head of the western region for TCS.

TCS set up its research and development centre in Pune almost 30 years ago. According to Mr Vasudevan, this was an early recognition of the fact that there is availability of talent which can be in involved in applied research as well.

TCS was one of the first companies to set up shop in Gandhidham, Nasik, Baroda and Goa, too. Factors such as availability of land, good infrastructure, availability of talent, sufficient power supply, low cost of living, easy connectivity to major national and international destinations are some of the reasons that propelled TCS to venture into these cities. This year, TCS has visited over 110 technical and management campuses in Western India and about 6,000 offers have been rolled out.

“Apart from Maharashtra and Goa, nearly 50 per cent of these offers are to the students of colleges from MP and Gujarat,” said Mr Vasudevan, adding that the quality of campus recruits from Western India is ‘excellent'.

Until a few years ago, IT services firms looked at Western India only for procuring talent and for broad-basing delivery infrastructure by setting up centres. However, things started changing after IBM took the lead in exploring the IT opportunity in the domestic market.

Today, IBM's customers in Western India come from divergent sectors — financial services, manufacturing, government and co-operative societies. “Western India is very mature market for IT services,” says Mr Jyothi Satyanathan, Vice-President, – Inside Sales Organisation IBM India and South Asia.

“Mumbai takes the lead in financial services while Pune and parts of Maharashtra are strong in manufacturing for us. As we go deeper into Maharashtra, Gujarat and MP, we see interest from co-operative societies (dairy co-operatives, sugar co-operatives and so on).”

The large numbers of small and medium businesses in the region are increasingly getting IT savvy. By definition, many of the small and medium enterprise (SME) clusters are located in and around Tier-II cities, be it Nagpur (for power loom and fabrication), Rajkot (oil mills, textile and printing) or Indore (pharmaceuticals).

SMEs in many of the upcoming cities are in the first wave of automation. The opportunity here lies in the implementation of ERP, CRM, inventory management, payroll management.

“In cities of this category, sizable chunk of SMB units have noteworthy turnover and hence proportionate IT budget. Since many of those companies are usually in growth or higher phase of their lifecycle, they consider IT as their strategic thrust area,” said Mr Vasudevan.

Both TCS and IBM have introduced ‘pay as you go' pricing models keeping in mind the needs of these SMB's.

In line with the growth that the company anticipates, IBM plans to increase the network by adding new offices in Maharashtra, Goa, and Gujarat in the coming quarters. Currently, IBM has offices in Mumbai, Pune and Ahmedabad, among others in the region.

Published on March 24, 2011

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