India&#8217;s BPO industry could reach $50 billion by 2012
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India&#39;s business process outsourcing companies could attain revenues of up to $50 billion by 2012, but the industry will need greater investments in education and infrastructure by the government, according to a new report released Tuesday.
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India&#39;s IT services market is forecast to grow to $10.73 billion by 2011, at a five-year compound annual growth rate of 23.2 percent, as outsourcing emerges as a more favored option for companies in India, according to research firm Gartner.As companies are finding it more difficult to hire and retain staff in their IT departments, they are looking at external service providers as an option, hoping to also cut down costs, and better manage growth in the process, Gartner said Tuesday.Indian user companies compete for staff with Indian outsourcing companies and Indian operations of multinational companies, which hire new staff by the thousands each quarter.Staff attrition is however not the key reason why companies are outsourcing, said Arun Gupta, chief technology officer, at Shopper&#39;s Stop, a top Indian retail chain. Driving outsourcing in India is a growing demand for new technologies and applications. Shopper&#39;s Stop has six IT projects in progress with another 12 projects planned for the next six to 12 months.Rather than creating and managing a large IT organization in house, the company is working with service partners to support its 45 IT staff, Gupta said. Some of the functions it outsources are network maintenance, desktop and server maintenance, monitoring enterprise resource planning (ERP) applications, and software development, he added.A number of large banks and telecommunications service providers are already outsourcing key IT operations, though the key winners so far have been multinational services companies. Many Indian outsourcing companies had neglected the Indian market in favor of exports, according to a survey last year by Gartner. But that may be changing as the&#160;weakening dollar puts pressure on rupee&#160;realization from exports.IBM,&#160;Tata Consultancy Services (TCS), and Wipro together accounted for 26.1 per cent of IT services vendor market share in India last year, according to Gartner. IBM was the top vendor, with 11.2 per cent market share. TCS and Wipro occupy the second and third positions with 10.9 and 4.1 percent market shares, respectively.However, the Indian IT services market is still fragmented, with the majority of the market being serviced by smaller local players that account for close to 40 per cent of the IT services market, according to Gartner.&quot;We have looked at smaller players for very small and specific jobs, but for larger jobs, running into a number of years, and which require a variety of skills, we look at large Indian companies or multinational services companies,&quot; Gupta said.The key segments of the Indian IT services market are hardware maintenance and support, software support, consulting, development and integration, IT management, and process management, Gartner said.
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40% of SBs (small businesses, or companies with up to 99 employees) in  India plan to invest in computers for the first time in the next 12  months, opening up a huge opportunity for hardware, software and  solution vendors.
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India's software exports are on track to grow by 30 percent in the year to March 2005, despite attempts in the key U.S. market to discourage outsourcing and protect jobs, the industry's head said on Monday.
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Up against competition for markets and for hiring staff, Indian software outsourcers are focusing on building reusable software that automates specific business processes. These software components can in turn be used across a number of clients, saving costs, and time.
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Wipro, India&#39;s third largest outsourcer, Friday reported growth in revenue and profits for the quarter ended September 30.The company reported revenue of 47.28 billion Indian rupees ($1.19 billion at the exchange rate on closing day of the quarter), up by 35 percent for the same quarter last year. Its profits at 8.1 billion rupees were up 17 percent from profits in the same period last year.The results are based on U.S. generally accepted accounting principles (GAAP).During the quarter,&#160;Wipro completed the acquisition of Infocrossing, a U.S. provider of IT infrastructure management, enterprise application and BPO (business process outsourcing) services through a tender offer. The company is also expanding its presence in the U.S. by setting up its first development center in the country for delivery of services onshore to its customers in the U.S. Wipro expects to fill 200 positions at this center in Atlanta, Georgia in the first year. A near-shore center in Monterrey, Mexico was also set up during the quarter.Wipro has both a domestic and export business. Exports for the quarter, consisting of IT and BPO services, were 32.4 billion rupees, up by 19 percent over exports in the same quarter last year.Wipro, like other Indian outsourcers, has been affected by the weakening of the U.S. dollar. A weak dollar translates into fewer rupees, even as these companies have to spend more in rupees to pay for rising staff costs. The company&#39;s operating margins for the quarter improved despite increasing salaries in India, on account of higher prices, higher utilization and operational efficiency, Wipro said.India&#39;s largest outsourcer&#160;Tata Consultancy Services&#160;(TCS) of Mumbai, and second largest outsourcer,&#160;Infosys Technologies&#160;of Bangalore, both reported strong revenue and profits growth for the quarter.Wipro added 59 new clients during the quarter in its export business. It also added 5,341 new employees, taking the total number of employees in its export business to 77,478 as of September 30.
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BANGALORE, INDIA -- General Electric Co. (GE) is selling a 60 percent stake in GE Capital International Services (GECIS), its business process outsourcing (BPO) subsidiary in India, for about $500 million, the company said Monday.
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Gartner researchers believe that as many as 50% of the IT operational jobs in the U.S. could disappear over the next two decades because of coming improvements in data center technologies.
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India could earn $40bn a year by March 2008 from information technology and outsourcing, a report says.
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Global networking giant Cisco Systems announced plans to make India a base for its globalization drive as it forecast the country could account for half its future workforce growth.
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French IT services company CapgeminiÂ is acquiring a 51 percent stake in Unilever India Shared Services, a finance and accounting business process outsourcing (BPO) operation in India belonging to European consumer goods maker Unilever Group. The financial terms of the agreement were not disclosed.
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Close on the heels of the&#160;appreciation of the Indian rupee against the dollar, Indian outsourcing companies are grappling with a new problem -- uncertainty among U.S. companies about a recession has made these companies delay finalizing their IT budgets.As a result many large deals between U.S. clients and Indian outsourcers will not be finalized in the first half of this year, said Sudin Apte, senior analyst and country head for India at Forrester Research.Business will however pick up for Indian outsourcers by the fourth quarter, particularly if the U.S. economy is in mild recession, Apte said.&quot;Our experience is that if the IT budgets of U.S. customers are marginally impacted in a recession, then there is an increase in business offshore, to cut costs,&quot; Apte said. If the cuts are too large, whole projects can however get canned, he warned.The U.S. is the largest market for Indian outsourcers.&quot;We believe that the recessionary nature of today&#39;s economic climate will promote the adoption of increased outsourcing,&quot; said Siddharth Pai, a partner at outsourcing consultancy firm, Technology Partners International Inc. (TPI) in Houston, Texas.TPI does not as yet see a cut in either discretionary or non-discretionary spending on IT by companies.Forrester said Monday that the IT services and outsourcing market will increase by 4 percent this year to $162 billion from a growth rate of 6 percent a year earlier.&#160;The research firm forecast slowing growth this year&#160;for purchases of IT products and services in the U.S.National Association of Software and Service Companies (Nasscom), a trade organization in Delhi, however remains optimistic about the growth of India&#39;s outsourcing industry. The industry is optimistic of achieving its target of $60 billion in software and services exports by March, 2010, the association said Monday.In the fiscal year to March 31, the industry expects export revenues of $40.3 billion, up by 29 percent from export revenue in the previous year.Problems for India&#39;s outsourcing industry could get however compounded as its customers abroad have seen a drop in overall satisfaction and a drop in value for money from offshore outsourcing to India, according to a Forrester survey. India is still preferred as an offshore destination because it is the only country where foreign companies can&#160;hire staff in the thousands, Apte said.
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India's IT services market is growing rapidly as outsourcing emerges as local companies outsource more business functions.
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It may now be the turn of Indian companies to offshore outside India their IT services requirements.
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New Delhi: In one of the largest deals in the $3.6 billion Indian BPO industry, US-based conglomerate GE announced it will sell 60 per cent stake in its Gurgaon-based BPO arm, GECIS, to private equity firms General Atlantic Partners and Oak Hill Capital
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(InfoWorld) - Indiaâs mobile handset production is growing fast, fueled by rapid growth in the number of mobile subscribers in the country. India produced nearly 31 million mobile phones last year, at a value of about US$5 billion, according to a report by Gartner Inc. The research firm expects production volumes to reach nearly 95 million, and to register a compound annual growth rate (CAGR) of 25 percent between 2006 and 2011. Growth in handset production in India this year, at 68 percent by units and 65 percent by value, is forecast to be the highest in the Asia-Pacific region, Gartner said. Mobile phone manufacturing was the largest contributor to the country's overall electronics production revenue last year, and to the total available market (TAM) for semiconductors, Gartner said. Indiaâs mobile market is booming. The country added 6.57 million mobile subscribers in May this year, taking the total number of subscribers to 178 million, according to the Telecom Regulatory Authority of India (TRAI) in Delhi. The country added 6.11 million new mobile subscribers in April. A number of multinational handset makers, including Nokia Corp., have set up manufacturing facilities in India. Sony Ericsson Mobile Communications A.B. is outsourcing mobile phone manufacturing to the operations in Chennai of Flextronics Corp. and Hon Hai Precision Industry Co. Ltd, which uses the brand name Foxconn. The decision by these vendors to make phones locally was also influenced by the decision of Bharat Sanchar Nigam Ltd. (BSNL), a large government-owned services provider, to insist on local manufacture by its suppliers. While the top five handset makers worldwide will retain a major share of production volume, local manufacturers are expected to capture up to a fifth of India's overall mobile phone production volume by the end of 2011, Gartner said. Growing demand for low-cost and ultra-low-cost mobile phones, and the need for EMS (electronics manufacturing services) vendors to reduce their revenue exposure to large multinational vendors, will contribute to the growth of local-brand mobile phones in the Indian market, it added. Reliance Communications Ltd., a large Indian services provider, already offers its own brand mobile phones, called the Classic range. The products are currently being customized and made by contract manufacturers outside India, a company spokesman said Monday. A low-cost model launched by Reliance at about US$19 in May sold one million units in the first week, he added. The spokesman did not however comment on whether Reliance had plans to move manufacturing to India.
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Still running like a train The Indian IT industry is on track to hit revenues of $64bn, up 33 per cent, by the end of this year and to employ some two million people.â¦