BIG 6 SWITCH TO BIGGER DEALS, CORNER 2.4 PERCENT OF GLOBAL WORK

Bangalore
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The top six India-based offshore service providers, collectively referred to as the ‘SWITCH’ companies (Satyam, Wipro, Infosys, TCS, Cognizant and HCL Technologies), accounted for 2.4 percent of the total worldwide IT services market in 2007 as compared to 1.9 percent in 2006, according to a report by Gartner.

Collectively and individually, this group of companies have achieved growth rates that have outpaced the rest of the market, Gartner said while adding: “All indications are that the Western European market is the next target growth area for offshore services.”

Arup Roy, senior research analyst, Gartner, said: “With such strong growth rates that exceed the overall market, the India-based IT services providers are increasing in their competitiveness and taking market share away from the rest of the market. Increasingly, they are competing in larger outsourcing deals, with deal values routinely exceeding $100 million and spanning multiple years.”

The growth rates experienced by these IT firms has also seen them expanding expanding into a broader base of services. “Consequently, they (SWITCH companies) are now regularly invited to bid for larger and more-complex outsourcing contracts, requiring multiple services. There is a gradual shift in increasing their revenue share from discrete project-based outsourcing services to annuity-based multi-year outsourcing contracts, thereby ensuring ongoing revenue streams. The approach has involved expanding the portfolio of service offerings, tapping new regions and focusing more on high-value services,” Roy said.

In 2007, the India-based group of SWITCH companies accounted for 3.6 percent of the US IT services market, compared with 2.8 percent in 2006 and grew its Western European revenue 51 percent in 2007, almost four times the total market. In 2007 the group accounted for 1.9 percent of the Western European IT services market, compared with 1.5 percent in 2006.