Indian giants to beat IBM and Accenture

Date: 14-08-2008
Source: The Economic Times

Tata Consultancy Services (TCS), Infosys Technologies and Wipro Technologies will emerge as the nextgen IT service megavendors and threaten the reign of the current global majors-IBM, EDS and Accenture according to research firm Gartner.

"These (Indian) vendors are increasingly being considered for strategic service deals, and will augment or, in some cases, replace today's acknowledged megavendors by revenue in this space by 2011," Gartner said. Top Indian IT firms have outperformed the megavendors by almost a 3:1 margin in growth rates, a Gartner report said. "The emerging megavendors have more than doubled their revenue in a four-year period, with the 2007 revenue being 2.6 times the 2004 revenue," said Gartner VP Partha Iyengar.

The emergence of such potential megavendors has been largely due to four critical competencies - process excellence, world-class HR practices, providing high quality services at a low cost and achievement of significant and disproportionate 'mind share' compared to their actual size. However, these companies have to face certain challenges before they can become a megavendor.

The key challenge is moving away from a linear growth model where revenue growth is directly linked to headcount growth. Revenue per employee for the largest Indian IT services vendor TCS stands at $51,320, while it's $45,800 for Infosys and $41,310 for the smallest of the three, Wipro. These companies have a long way to go when one looks at revenue per employee figures for Accenture ($130,200), IBM Global Services ($146,910) and EDS ($154,340).


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