Emerging economies might eventually make UK businesses second class IT services customers

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The UK gets a lot of focus from IT services companies for good reason. It is worth a lot of money to them.

Gartner says the IT services market in the UK will be worth about $77bn in 2011. This is massive when you compare it to India which Gartner expects to have a domestic IT services market worth $9bn in 2001. The domestic IT services sectors in China and Latin America in 2011, again according to Gartner, will be worth $12bn and $32bn respectively.

Suppliers may give the UK the royal treatment now but whether they do in the future probably depends on how big these emerging regions become. There might come a day when the UK is a third or fourth class citizen. You can imagine a service provider from India, China or Brazil believing a customer in the UK might not be worth the effort in the future.

The service providers are readying themselves for this type of scenario.

Capgemini, through its Brazilian operation, has signed a 13 year deal with Brazilian conglomerate ABC Algar group to support their company's operations in Brazil. Capgemini will run Algar's general accounting, account receivables, account payables, tax, human resources administration, payroll and procurement.

In 2010 Capgemini took a 55% share in Brazilian IT service provider CPM Braxis for €233m. The deal will give Capgemini access to the large Latin American market and offer it more options in terms of services for its international customers.

The French IT giant also put its roots down in China with the acquisition of Praxis Technology in Beijing. Praxis is a specialist IT and consulting company which specialises in the Chinese utility market. It offers business management consulting services, Enterprise Resource Planning (ERP) implementation and application and software development services.

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About this Entry

This page contains a single entry by Karl Flinders published on July 12, 2011 3:31 PM.

Businesses are forcing Indian IT suppliers to cut their charges by up to 20% was the previous entry in this blog.

Staff churn as well as cost and service levels will mean more UK jobs come back from India? is the next entry in this blog.

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