Redactie - 12 mei 2011

Top Ten Indian IT Service Providers Grew 19.9 Per Cent in 2010


The top ten India-based IT services providers saw a reacceleration in growth in 2010, according to Gartner, Inc. The top ten Indian providers grew 19.9 per cent, compared with 5.8 per cent for the worldwide top ten IT service providers and 3.1 per cent growth for the global market.
 
Gartner analysts said these results reinforce that India's IT services providers are well out of downturn times and back on their growth trajectory. Eight out of these top ten providers reported revenue of more than $1 billion, with cumulative revenue representing almost 50 per cent of the offshore industry from India in 2010.
 
“The top five India-based providers grew by $4.5 billion in 2010,” said Arup Roy, principal research analyst at Gartner. “While the India providers constitute only a small percentage of the total industry, collectively the group has had a resounding impact on the market. The top five providers represented 93.7 per cent of the growth achieved by the top ten as a group, continuing the theme that leaders are pulling away from the pack and that market share gains by the smaller players is more likely to come with consolidation and not organically.”

Among the top five India-based providers TCS gained three ranks to move up to 21st position in the global IT services ranking of service providers (Download Table 1 below). Cognizant experienced the strongest growth in 2010 (40.1 per cent), and the greatest absolute dollar value increase ($1.3 billion).
 
“Recognising the importance of diversification, Indian providers are expanding their geographic reach, as well as expanding their service line mix, while maintaining a focus on sustaining operating margins. Of the top ten Indian providers, only Mahindra Satyam reported a decline in 2010 revenue, (-10.2 per cent), as the company was still coming out of the accounting scandal unearthed in 2009,” said Mr Roy.

Analysis of the Top Five India-Based Providers
 
TCS maintained its leadership position among Indian providers and continued its growth momentum. It continues its strategy of full-spectrum IT services with investments in expanding applications, infrastructure and business process outsourcing (BPO) portfolio.

Infosys showed slightly disappointing performance in 2010. Infosys faced head winds of a hypercompetitive market and aggressive selling tactics of its competition, which challenged its historic positioning of higher-value services. This, coupled with Infosys' stand of not compromising with its profitability, resulted in losing some business to its more-aggressive Indian competitors.

Wipro underperformed compared with its peers, posting 16.4 per cent growth, and in its most recent quarter (ending 31 December 2010) results came in below expectations. That said, Wipro has a solid integrated service portfolio approach; global delivery optimization; greater standardisation and reuse (such as ownership of IP solutions, reusable frameworks and "productised" solutions); and a new focus on expanding system integration services.

Cognizant posted the highest growth in 2010 (40.1 per cent) of the top ten India-based providers. Cognizant was able to quickly rebound in 2010 from the recession, and its strategy of continuing to invest through the recessionary times, coupled with strong account management and local presence, paid off in 2010. Cognizant's performance is a reflection of the investments the company has made in the three areas that Gartner considers to be the most important competitive differentiators: operational capabilities (global distribution model); industry and business process capabilities; and relationship management.
 
HCL posted 26.7 per cent growth in 2010. The company has focused on transparency with internal and external stakeholders by empowering its employees to be innovative and fostering their employee-first/customer-second policy. HCL's strategy of aggressively pursuing contracts that combine infrastructure and application management in a single framework worked in its favour and helped it to capture more integrated service deals in 2010.
 
“It is evident that since these top five providers have grown considerably (the top five are above $2 billion in revenue). Coupled with factors, such as multinational companies (MNCs) levelling their cost advantage with robust global delivery resulting in stiff competition and changing competition landscape and buying behaviour with alternative delivery models, it will now be difficult for the current models that are focused on cost advantages, to sustain continued growth rates of more than 25 per cent as they did a few years back,” said Mr Roy.
 
Additional information is available in the Gartner report "Market Share Analysis: India-Based IT Services Providers, Worldwide, 2010." The report is available on Gartner's website.
 
 

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