With declining margins and intensifying competition in the international market, MNC IT service providers are rapidly increasing their presence and head count in India. This can certainly pose a threat to the Indian IT service providers in the near future.
Over and a the past five years, the Indian IT industry has grown rapidly with a $12 bn export 30% growth in revenues. A Nasscom-McKinsey study has pre-dicted that the Indian IT industry will be worth $57 bn by 2008. However, the amount of work coming to offshore locations like India is insignificant when compared to the total global out-sourcing pie. Indian bigwigs like TCS, Infosys, Wipro, Satyam and HCL are propelling the Indian IT industry from the Y2K era to the offshoring wave. The last few years have seen Indian IT companies going global with overseas acquisitions and at the same time, MNC IT firms expanding their wings in the Indian IT industry. On the other hand, MNCs like IBM global services, Accenture, EDS, HP, Sapient and CSC have started their operations in India to clinch the domestic pie. While the MNCs tend to focus on delivering solu-tions, most Indian IT companies are focusing on Application Development and Maintenance (ADM).
After 1995, product development ma-jors Microsoft and Oracle Corporation started their development centers in India mainly to cater to their in-house R&D facilities, to leverage the low-cost capital and human resources. The real evolution of the MNCs in India started after 2000 with many MNCs starting their development centers. Today, 80% of top 100 IT companies in the world have their presence in India, shows the plenty of opportunity for growth. The critical factors attracting these MNCs to India are the low-cost wages coupled with the availability of a highly-skilled talent pool. |
