The Indian software and services export sector is clearly moving towards a situation where bigger is better, with the four largest companies — Tata Consulting Services, Wipro, Infosys Technologies and Satyam Computer Services — accounting for nearly 30 per cent of the estimated $23.4 billion in export revenues in 2005-06 projected by Nasscom. The four companies together accounted for revenues Rs 35,617 crores in 2005-06, with Satyam Computer Services joining the exclusive billion dollar club, employing over 1.75 lakh people.
Industry experts say that as the Indian offshoring story continues and picks up steam, only a few large companies would be able to sustain their operations. "Bigger is definitely better in the Indian software services sector because there is no differentiation in services among Indian companies. In such a situation, customers will general go with the larger players," says Sudin Apte, country manager, India, for Forrester Research, Inc., an independent technology and market research company.
"This has been borne out by the performance of the large Indian companies which reported robust, double-digit growth in revenues and profits, while the mid-sized companies have posted single-digit or flat growth in 2005-06," Mr Apte said.
"The increasing size of the Indian companies like TCS and Infosys and Satyam was one of the reasons why they were able to win multi-year and multi-million dollar contracts from ABN Amro and Hewlett-Packard in association with other companies," Mr Apte said. Mr Apte’s view was echoed by Ram Mynampati, president and wholetime director of Satyam Computer Services, which has a balance-sheet size of Rs 4,200 crores, including cash reserves of Rs 3,100 crores. "A large offshoring company has advantages, because the size of the offshore operations will be able to absorb a lot of opportunities," Mr Mynampati said.
Industry experts say that as the Indian offshoring story continues and picks up steam, only a few large companies would be able to sustain their operations. "Bigger is definitely better in the Indian software services sector because there is no differentiation in services among Indian companies. In such a situation, customers will general go with the larger players," says Sudin Apte, country manager, India, for Forrester Research, Inc., an independent technology and market research company.
"This has been borne out by the performance of the large Indian companies which reported robust, double-digit growth in revenues and profits, while the mid-sized companies have posted single-digit or flat growth in 2005-06," Mr Apte said.
"The increasing size of the Indian companies like TCS and Infosys and Satyam was one of the reasons why they were able to win multi-year and multi-million dollar contracts from ABN Amro and Hewlett-Packard in association with other companies," Mr Apte said. Mr Apte’s view was echoed by Ram Mynampati, president and wholetime director of Satyam Computer Services, which has a balance-sheet size of Rs 4,200 crores, including cash reserves of Rs 3,100 crores. "A large offshoring company has advantages, because the size of the offshore operations will be able to absorb a lot of opportunities," Mr Mynampati said.