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The TOP 5: India-based IT services firms boom

Last updated on: May 12, 2011 14:23 IST

The TOP 5: India-based IT services firms boom

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The top five India-based IT services providers grew by $4.5 billion in 2010, according to a study by IT consulting major Gartner.

The top 10 India-based IT services providers too saw a reacceleration in growth in 2010, according to Gartner, Inc. The top 10 Indian providers grew 19.9 per cent, compared with 5.8 per cent for the worldwide top 10 IT service providers and 3.1 per cent growth for the global market, the study said.

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 10 providers reported revenue of more than $1 billion, with cumulative revenue representing almost 50 per cent of the offshore industry from India in 2010.

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"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 10 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," said Arup Roy, principal research analyst at Gartner.

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.

"Of the top 10 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 Roy.

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1. TCS

India's top IT company is ranked 21st globally. It was ranked 24th in 2009. Its 2010 revenues at $6.98 grew by 18 per cent over 2009.

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.

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2. Infosys

Infosys, ranked 28th globally, is India's econd largest IT firm with revenues of $5.33 billion marking a growth of 19.9 percent, according to Gartner. In 2009 the IT major was ranked 33 globally.

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.

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3. Wipro

Wipro, India's 3rd largest IT firm, is ranked 31st in the world. In 2009, its rank was 35. Its 2010 revenues grew at 16.4 per cent to $4.752 billion.

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 standardization and reuse (such as ownership of IP solutions, reusable frameworks and "productized" solutions); and a new focus on expanding system integration services.

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4. Cognizant

Congizant was ranked 44th in 2009, but jumped 10 spots to rank 34 in 2010. In 2010, its revenues shot up by 40.1 per cent to $4.408 billion.

Cognizant posted the highest growth in 2010 of the top 10 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.

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5. HCL

HCL posted 26.7 per cent growth in 2010. It is ranked 48th in the world, up from its rank of 60 in 2009. Its revenues for 2010 grew at 26.7 per cent to $2.77 billion.

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 favor and helped it to capture more integrated service deals in 2010.

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"It is evident that since these top five providers have grown considerably (the top five are above $2 billion in revenue)," said Roy.

"Coupled with factors, such as multinational companies (MNCs) leveling their cost advantage with robust global delivery resulting in stiff competition and changing competition landscape and buying behavior 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," Roy added.


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