Gartner states that Indian IT services market is pegged to grow to US $ 10.73 billion by 2011. Key factors driving this growth are agility, growth, cost takeout and innovation. The top three vendors, IBM, Tata Consultancy Services (TCS) and Wipro Infotech, together accounted for 26.1 per cent of IT services vendor market share in 2006.

As user organizations continue to grapple with the challenge of high attrition rates in internal IT departments, the Indian IT services market is pegged to grow to US $ 10.73 billion by 2011 at a five year compounded annual growth rate (CAGR) of 23.2 per cent, according to Gartner, Inc. Key factors driving this growth are agility, growth, cost takeout and innovation. But a factor which is acting as a prime impetus for companies to consider external service providers (ESPs) is the continuous turnover rates of key IT staff in the range of 15 - 20 per cent.

The market segments that are expected to witness the strongest growth are consulting, IT management and business process management (BPM) services with five year CAGRs of 28.1, 23.8 and 27.1 per cent, respectively.  Consulting revenue, although coming from a small base, grew 30.1 percent to US $340 million in 2006 compared with 2005. As companies become more mature in their overall approach towards IT, it becomes more complex and sophisticated; they invariably have to rely on external providers to help them with consulting services. IT management revenue grew 27.3 per cent from 2005 to US $549 million in 2006. Increased adoption of remote infrastructure management services has driven the development of network operation centers / security operation centers, remote management centers and other managed service offerings from ESPs.

BPM in India is a high growth area that is moving beyond traditional customer relationship management (CRM) services. The primary challenges that are driving organizations to engage business process outsourcing (BPO) are cost, growth and business innovation. The primary objectives of BPO engagements are productivity improvements, process/business transformation, and cost-containment to improve profits. Both global and Indian vendors have leveraged these growth areas and the top three vendors, IBM, Tata Consultancy Services (TCS) and Wipro Infotech, together accounted for 26.1 per cent of IT services vendor market share in 2006.

Related Items:

---

Be first to comment this article

Only registered users can write comments.
Please login or register.