Indian IT service providers winning bigger deals: report

The growth in offshore outsourcing is further evidenced by impressive gains for the Indian service providers, whose market share has risen to 5.2 per cent of the total value of contracts signed so far this year, up from less than 3 per cent in 2005 and just over 1 per cent in 2004, according to a report released by TPI, an outsourcing advisory firm.

TPI further added that Indian software service providers are actively bidding for contracts worth a little over $2 billion and which should be awarded within the next three months.

"Moreover, data relating to deals currently under negotiation (with which TPI is involved) points to a dramatic, almost three-fold (284 per cent) increase in the value of deals for which the Indian providers are competing, compared with three months ago."

Said Siddharth Pai, partner & MD, TPI India: "The size of deals the Indian service providers are winning are also increasing, up by 25 per cent from an average deal size of $128 million in 2005 to $159 million in 2006 to date."

Of the 11 contracts totalling $1.74 billion awarded to Indian providers this year, nine are in the Indian traditional areas of strength in applications development and maintenance or finance and accounting.

Pai further added that data on transactions on which TPI is currently advising reveals that the Indian providers are now being considered for remote IT infrastructure work as well.

"The mature Indian vendors have achieved significant growth. Infosys, Satyam, Wipro, TCS and HCL are beginning to win larger and more varied deals. Our data suggests that there is no reason to doubt that this trend will continue, especially as buyers gain experience of working with them, and their confidence grows as a result," Pai added.