INDIA GROWTH STORY: Indian firms still big in IT services, says survey

Sunday, January 27, 2008

Indian firms still big in IT services, says survey

Indian firms came first in four out of 10 information technology service categories in a global survey that selects the 100 best IT services providers. US-headquartered IT firms topped in four other categories and one firm each from Mexico and China took the other prizes in the 4th Cybermedia Global IT Services Survey.

Overall, the survey affirmed India’s standing as a major outsourcing centre. India also led the way as the global delivery centre for IT service companies, with many non-Indian firms clearly favouring India. However, the survey also revealed that the rising rupee was the number one concern for many such firms.

Tata Consultancy Services was rated the best performing IT services company. HCL Technologies was rated the best performing infrastructure service provider. Genpact was rated the best performing BPO provider and WNS Global Services was the rated the best performing FAO provider.

The US firms were EDS, Sitel, EPAM Systems and Computer Sciences Corporation – all of whom have a footprint in India as well. Mexican and Chinese firms won in categories that were region specific. India is rated the number one hub for global delivery of IT services. Fifty-seven per cent of IT service employees working in delivery centres, says the survey, were located in India. Only 18 per cent were based in the US. This reflects how many non-Indian firms keep their delivery centres in India.

In the listing of the 100 best IT services firms, Indian companies trailed those in the US but were well ahead of any other country. Forty-three US-headquartered firms dominated the 100 best firms. There were 29 firms in the list. There were four Chinese companies, four from Malaysia, three from Russia and three from Brazil. There a scattering of other firms in countries ranging from Argentina to the Ukraine. The survey said these “were a gentle reminder” of the presence of other countries that could become outsourcing rivals to India.

Two years ago the same survey listed 36 Indian firms and 32 US firms in the top 100. This shift to US-headquartered firms may reflect both the fact many Indian firms are being bought up by US firms and a consolidation in the upper end of the Indian IT services industry.

However, 47 per cent of the respondents, including many from India, said a falling dollar and rising local currency was their “most critical business concern.” The survey says “Indian service providers who derive between two-thirds to three-fourths of their revenues from the US are back to the drawing board to consider non-US avenues.” Firms in the Philippines and Canada also listed currency problems as their main business headache.