Three companies dominate Indian outsourcing market

INDIA’S OUTSOURCING MARKET is being dominated by just three huge companies, who are making it extremely difficult for smaller firms to compete, according to a new study.

Forrester Research said that due to increasingly sophisticated services and expanding global reach, Indian firms Tata Consultancy Services, Infosys Technologies and Wipro now hold 46.4 per cent of the entire outsourced IT services market in India, to the detriment of smaller Indian companies. This percentage is up by just over six per cent since last year, which demonstrates very rapid growth indeed.

Talking to PC World, a senior analyst at Forrester, Sudin Apte, noted that India’s big three were now very capable of competing with large multinational service providers, due to their profitability and revenue take in per employee.

Apte noted that by upping productivity and focusing on churning out a ton of intellectual property, the big three have been able to boost revenues without having to take on more staff. Other outsourcers, having to rely on vertical markets, run the risk of spreading themselves too thin and going bust according to Apte.

Boffins at Forrester reckon that the big three are actually the exception to the rule in that the majority of Indian outsourcers suffer low revenue growth and don’t put in a particularly good showing when it comes to profitability either. But that doesn’t mean they’ll shut down. As long as some profit is still being made, outsourcing and India will still probably remain linked for quite some time. µ