Tata Consultancy Services (TCS), Infosys Technologies and Wipro Technologies, India’s top three software companies, may replace IBM Global Services, Accenture and EDS as so-called mega vendors by 2011 by winning larger outsourcing orders, according to Gartner.
TCS, Infosys and Wipro, collectively referred to as ‘India-3’, have grown at a faster pace as compared with its global rivals in the past seven years, the IT research and advisory firm said. The Indian companies have outpaced IBM, Accenture and EDS by almost a 3:1 margin in growth rates.
“The emerging mega vendors have made dramatic progress in the past few years and have more than doubled their revenue in a four-year period, with the 2007 revenue being 2.6 times the 2004 revenue,” said Partha Iyengar, vice president and regional research director, Gartner.
The emerging mega vendors have leveraged four critical competencies to achieve their status: in-process excellence, world-class HR practices, providing high quality services at a low cost and the achievement of significant and disproportionate ‘mind share’ compared to their actual size.
However, there are some hurdles in the way to achieve this position.
Looking at the “revenue per employee” data, it is clear that there is a divide between the present mega vendors and the aspiring Indian mega vendors. The Indian providers will have to address the issue of moving away from resource-intensive revenue growth to a model that provides higher leverage and increases the revenue without a linear relationship to head count, which is the situation that exists at present.
Iyengar said, “Revamping and continually reinventing their delivery capabilities, even as they address the challenges of managing their growth opportunities, will determine how and when these emerging mega vendors will actually achieve the desired status.”