As of now, India has been the third fastest-growing IT market in the Asia Pacific region for three years in a row and the momentum is likely to go on in the prevalent year also. The action on the domestic IT market is accelerating sharply with certain large outsourcing deals coming through. Even Nasscom-IDC study says- domestic spending on outsourced IT services in 2006 was Rs. 15,310 crore as against Rs. 12,823 crore in 2005 and is expected to touch Rs. 18,035 crore in 2007.
According to TPI, the contract value of deals above $25 million in India between 2002 and 2005 was $4.4 billion, but in 2006 alone it was $2.6 billion. Though this number accounts for a significant portion coming from the hardware segment.
Nevertheless, as of now, it looks like, as if MNCs have been ruling over the scenario with IBM, Accenture, Oracle, SAP and HP building their business in India. The examples are IBM with Bharti and Idea Cellular, Accenture & Dabur, and HP with Bank of Baroda. It seems that, its time for retrospection for MNCs, they do not want to commit this very mistake again of what they did in their home market on the outsourcing front so they are investing heavily quite early here.
But many Indian players were not in attendance. Partha Iyengar, partner, Gartner India, says, "The revenues of Indian IT companies are in dollars while the costs are in rupees," adding, "MNCs are operating in India as profit centres and not as cost locations”.
IBM, which has created a kind of benchmark in winning large IT outsourcing deals, feels that there is a very strong potential in the Indian market. IBM also believes in maintaining a long-term partnerships and permit companies to complete their access to its latest tools and technologies. Nasscom vice-president Rajdeep Sahrawat says “MNCs traditionally have the culture of developing and investing in a market while the Indian companies are more in harmony to cater to their cravings in market”.
But, some-where-down-the-line, there could be a sound reason of Indian companies for giving undivided attention on the domestic, though the profit margins might not be anywhere near the overseas market. Vaswani says “its learning are immense as they have undertake very complex projects and with a very demanding customer base”.
This furnishes them with the formidable experience of handling large projects and makes it easier while transitioning into the overseas market. Secondly, it has also turn out to be an ideal training ground for professionals to hone their skills.
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