Forrester's Stephanie Moore writes that major global service providers continue to lose ground to large Indian firms, especially in the application services market. She finds that the tier one Indian providers have continued to thrive while most legacy service providers have posted minimal to negative growth and goes on to assert that Indian firms will continue to grow — and not just because they are a lower-cost option but they have caused a fundamental and structural change in the service provider/client relationship.
More importantly, she nails the fact that offshore providers have taught clients to expect transparency, efficiency, and accountability in service delivery. Stephanie, well known in the analyst community/industry for her superior understanding of the Indian offshoring phenomenon earlier wrote how Accenture & Cap Gemini are scaling/distributing/perfecting their global delivery models.
Better delivery is ensuring that Indian-headquartered companies are growing better than the global majors with offshore presence says this article. Due to their focus and operational efficiencies, Indian headquartered vendors are winning more deals than traditional players. Gartner's Partha Iyengar is quoted therein in support of this observed trend.
A few months back, while acknowledging the impressive ramp up of offshore presence of global majors, I wrote that more and more opportunities are beginning to get won in large numbers and most of the Indian big players are anyway hiring Big Six veterans to help strategise better to go after bigger deals.
An acquisition of the big players may be the final assault on the dominance of Big Six – but this could mean that the Indian companies may need to have a different mindset to manage – (with limited margins and more longterm in their outlook).It may disrupt the traditional economics of the Indian players, but nonetheless would be a move much needed in time.
Article comments
1 - Mohan Babu
Your prediction "I expect that at least one/two acquisitions would be made by Indian players" makes for interesting reading. However, I wonder if it is likely to happen without a major cultural shift in leadership?
M & A, especially of larger deals come with lot more cultural and organizational baggage. If one adds globalization and cross-cultural challenges to the mix, it would be interesting!
- Mohan [Author: "Offshoring IT Services"]
2 - sadagopan
Mohan, Indeed yes - I linked this in the article wherein i wrote that an acquisition of the big players may be the final assault on the dominance of big six â€" but this could mean that the Indian companies may need to have a different mindset to manage â€"(with limited margins and more long term in their outlook).It may disrupt the traditional economics of the indian players, but nonetheless would be a move much needed in time. Definitely acquisition costs and cultural fits for both types of acquisitions -(global majors eyeing a secoind tier offshore player or an offshore major eyeing a global major) could matter a lot in determining success of acquisitions.