The top five India-based IT services companies ? TCS, Cognizant, Infosys, Wipro and HCL Technologies ? grew by 13.3% to reach a combined revenue of $34.3 billion in 2012, exceeding the global IT services industry growth of 2%, according to Gartner.
However, the growth witnessed in 2012 is much lower than what was recorded in 2011. While the top five India-based IT services companies recorded growth of 21.8% the global industry grew by 7.7% in 2011, Gartner said.
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The growth rate of India-based providers has been slowing for some years, but in 2012 this trend was more pronounced, the research body said. This growth rate is still quite high compared with the IT services worldwide, or the growth of the top 10 global IT services providers. The global top 10 providers are larger in their base revenue and more diversified than the India-based providers.
?Cognizant displaced Infosys to become the second-largest Indian IT services provider and Cognizant experienced the highest growth rate among the top five providers with an increase of 20.1% in 2012,? said Arup Roy, research director at Gartner. TCS closed in on the top 10 worldwide market share leader, with less than $1.5 billion separating it from the 10th ranked provider, Hitachi.
According to Roy, the top five Indian service providers have continuously chipped away market share from the large multinational corporation providers. In the past five years, they have been winning large outsourcing deals (those with a total contract value of more than $100 million). Their target customer segment still remains the Fortune 1000 companies. Most of these firms have a large-deal pursuit sales team that goes after deals of more than $35 million in contract value.
?There is a strong focus on, and investments in cloud, analytics, mobility, infrastructure and knowledge processes. India-based providers have become much more aggressive in infrastructure management because it offers them the potential to grow bottom-up within accounts,? he said.
The revenue contribution from project-based and staff augmentation deals has continued to decline for the top five Indian-based providers, and the outsourcing service line component has steadily increased. They have also made significant strides in developing industry-specific BPO services through acquisitions and/or organic growth.
Gartner said that Indian providers use an integrated approach of applications, infrastructure and BPO, thereby allowing them to get a better handle on their clients’ IT-business process leveraging, through which they can deliver greater cost savings and drive business value.
