Indian offshore service providers are now posing a
serious challenge to continental European competitors, as
enterprises across Europe increasingly seek to take advantage of
global sourcing, said analyst Gartner.
Unlike enterprises in the US or UK, continental European
countries have been historically more reluctant to engage with
offshore providers to support their business needs, because of
political sensitivity, labour laws, language requirements and
cultural compatibility.
Globalisation however is spawning new competition that European
companies can not ignore, said Gartner.
In the last months of 2006, leading offshore providers in India
released quarterly earnings announcements that signalled strong
earnings in Europe.
Despite these providers not specifically disclosing major client
wins in Europe, these earnings announcements show how Indian
service providers have achieved traction in the traditionally
difficult continental European market, said the analyst.
They also demonstrate how, especially outside the UK, few
European organisations are comfortable with the idea of publicly
announcing the use of offshore outsourcing. This is because
European business leaders still worry about offshoring’s effect on
their company's workforce and image, said Gartner.
“Tier 1 Indian offshore providers, without exception, have
recorded outstanding growth rates since the first quarter of 2006.
The three largest (TCS, Infosys and Wipro) have recorded
year-on-year growth of more than 40%, while Cognizant has enjoyed a
60% growth rate,” said Gartner analyst Claudio Da Rold.
“Although the US is still the largest market for these
companies, their European divisions have shown the strongest
growth, thanks to strong acceptance in the UK and an increasing
number of customers in continental Europe,” she said.
One-in-three European IT managers dissatisfied with offshoring
outside Europe >>
Outsourcing 'derailed by focus on
ROI' >>
Mastek announces new Indian centre for UK clients >>
Gartner website >>
TCS website
>>
Infosys website
>>
Wipro website >>
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