Wednesday, September 03, 2008

Indian Megavendors

The other day i was reading an article in http://specials.rediff.com/money/2008/aug/13slide1.htm on India's top three IT companies. As per this article, Gartner has come out with a report in which they predict that, Tata Consultancy Services, Infosys Technologies, and Wipro Technologies, collectively referred as 'India-3,' will emerge as the next generation of IT service megavendors. These vendors are increasingly being considered for strategic service deals, and will augment or, in some cases, replace today's acknowledged megavendors by revenue -- IBM Global Services, Accenture and EDS -- in this space by 2011, says Gartner.

Obviously this means there will be a lot of consolidation that is bound to happen in the IT space in India, as there are a lot of tier-2 firms who cannot match the pace of growth of the top 3 firms in India. This means some of these small IT companies will be forced to sell out as the war on margins and cornering a portion of the relatively fixed marketshare will become more acute. However, for the top-3 to actually reach the levels of present generation megavendors, apart from the cost advantage, they have to position on other parameters as well. The article talks of four critical competencies on which the emerging Indian megavendors are positioning themselves.

The competencies are: process excellence; world-class HR practices; providing high quality services at a low cost; the achievement of significant and disproportionate 'mind share' compared to their actual size.

However, the catch is to continue providing high quality services at a low cost and yet try and increase the mind-share further. With wage bills increasing and worries over global slowdown, maintaining low cost is definitely a big challenge. However, i feel where Indian top-3 companies are critically lacking is in thought-leadership. The culture of innovation and path-breaking developments is still not visible. The present day megavendors have primarily reached this position due to a large investment in innovation and thought-leadership. Anyways, interesting times ahead for all in tough situations, and obviously only the toughest will survive and prosper.

2 comments:

Anonymous said...

Well, consider this (really happening, typos and all):

---

Aug 15, me: When will [a certain critical product] be available?

Them: Our development team is working on this, we will let you know as soon as we received it.

...

Aug 28, them: [The product] will be available next Friday. We will email you if we have any update from development.

Me: Is next Friday tomorrow or a week from tomorrow?

Them: It is week of today.

Sep 2, me: OK, how do I get it?

Them: You would be able to download it from out support web site this coming Friday.

---

Guess which country that is from? Not India, but one that will replace the companies mentioned in your article.

Krishanu Bose said...

Well it will be quite a while before other countries can beat the cost-advantage for skilled manpower of India. But definitely the going will be tough for the Indian top-3 in next 5-6 years.

About Me

My Photo
India
Krishanu's Oracle Applications Blog - Oracle Apps consulting services scenario in India. Also, an inside view of Oracle Apps outsource services in India. Also the blog features new developments in Oracle Apps and my learning's in this field. The views expressed are my own only and not of my employer Wipro Technologies. The views and opinions expressed by visitors to this blog are theirs and do not necessarily reflect mine.