Indian providers own 2.4 per cent of IT services market

India-based IT service providers, the so-called ̵6;SWITCH̵7; companies - Satyam, Wipro, Infosys, TCS, Cognizant, and HCL Technologies - accounted for 2.4 per cent of the total worldwide IT services market in 2007, as compared to 1.9 per cent of the total worldwide IT services market in 2006.

The top six India-based IT service providers, the so-called ̵6;SWITCH̵7; companies (Satyam, Wipro, Infosys, TCS, Cognizant, and HCL Technologies) - accounted for 2.4 per cent of the total worldwide IT services market in 2007, as compared to 1.9 per cent of the total worldwide IT services market in 2006, according to analyst Gartner.

Collectively and individually, this group of companies have achieved growth rates that have outpaced the rest of the market, the market watcher reports. All indications are that the Western European market is the next target growth area for offshore services.

̶0;Each of these providers is pursuing growth in the broad-based IT services market,̶1; comments Arup Roy, Gartner senior research analyst. ̶0;Although the roots of several of these providers were in the application services market, over time each has evolved its coverage of the services market, expanding into a broader base of services, such as infrastructure services.̶1;

Roy adds: ̶0;With such strong growth rates that exceed the overall market, the India-based IT services providers are increasing in their competitiveness, taking market share away from the rest of the market. Increasingly they are competing in larger outsourcing deals, with deal values routinely exceeding $100m and spanning multiple years.̶1;

While application development and management services remain the bulk of their revenue stream, there is a gradual diversification in other service lines - such as consulting and remote infrastructure management services, where they have experienced high growth. Expansion of service offerings by India-based providers has enabled them not only to build and mine existing accounts, but also to increase visibility as full-service providers.

Consequently, they are now regularly invited to bid for larger and more-complex outsourcing contracts, requiring multiple services, Gartner̵7;s Arup Roy says: ̶0;There is a gradual shift in increasing their revenue share from discrete project based outsourcing services to annuity-based multi-year outsourcing contracts, thereby ensuring ongoing revenue streams. The approach has involved expanding the portfolio of service offerings, tapping new regions and focusing more on high-value services̶1;.

Further information: www.gartner.com

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