Indian outsourcers drive IT market growth

The top six offshore outsourcers based in India are growing their share of the global IT services market at a rate that is challenging the traditional leaders' dominance, according to new research by analyst Gartner.

The Indian providers, Satyam, Wipro, Infosys, TCS, Cognizant, and HCL Technologies, referred collectively to as SWITCH, claimed a 1.9 per cent share of the total IT services market in 2006, which Gartner valued as worth $672 billion (333.5 billion). This was nearly four times the 0.5 per cent of the $554 billion (274.9 billion) IT services market SWITCH claimed in 2001.

The analyst firm said that, despite their relatively small size - where TCS ranked highest of all the SWITCH companies at position 35 and HCL came lowest at number 86 in the research compiled this August - these providers were making significant strides to challenge the market share leaders' positions.

It said SWITCH companies continued to show strong annual revenue growth that exceeds the market norm. The average annual growth among the six was 42.4 per cent in 2006, compared with 4.3 per cent growth of IBM as the market leader during the same period.

"India-centric providers have perfected their respective value propositions through global delivery models, providing high-quality yet lower-cost labour to buyers globally," said Allie Young, Gartner vice president. "These companies are making inroads in key clients, often beginning with smaller, project-based or staff augmentation work."

Partha Iyengar, Gartner vice president and regional research director added: "From being relatively unknown brands a decade ago, leading India-centric providers now offer formidable competition to the global players."

But the research found that these companies would still take a number of years to reach the heights of the top 10 providers worldwide, unless they looked to grow by making major acquisitions.

Miya Knights

A 25-year veteran enterprise technology expert, Miya Knights applies her deep understanding of technology gained through her journalism career to both her role as a consultant and as director at Retail Technology Magazine, which she helped shape over the past 17 years. Miya was educated at Oxford University, earning a master’s degree in English.

Her role as a journalist has seen her write for many of the leading technology publishers in the UK such as ITPro, TechWeekEurope, CIO UK, Computer Weekly, and also a number of national newspapers including The Times, Independent, and Financial Times.