Indian IT firms no longer moving as a group

The mixed performances of the Indian IT service providers is evidence of their maturity and the different paths they have taken.

Indian suppliers have become a good gauge of IT spending. They all seem to have been growing at a rapid rate with double digit after double digit revenue growth. These suppliers were known as the SWITCH group of suppliers Satyam, Wipro, Infosys, TCS, Cognizant and HCL.

I even suggested in a blog last year that they as a group were replacing IBM as the bellwether of IT spending.

These companies have low cost workforces, based onshore and offshore, to help them win business quickly. But most big IT companies today have big workforces offshore and as a result offshore services is hardly a differentiators today.

Recent results have been a bit different and there seems to be quite a bit of differentiation. Obviously the slowing economy has had an impact but so too the different business strategies of the major Indian Suppliers.

I was talking to Cognizant’s UK head, Sanjiv Gossain, recently and he said there is a divergence. “The success of the different strategies of the different companies are now becoming more apparent.”

He says offshoring today is just the way people do business and money cannot be made just doing the same thing.

Cognizant has been one of the fastest growing IT services firms for years. In fact it has been up there with the likes of Apple and Google in growth terms. See this blog I wrote a couple of years ago.

The company is currently seeing demand for services around what it calls the SMAC stack which is social, mobile, analytics and cloud.

Ilan Oshri, a professor at Loughborough School of Business, says cost cutting, although critical in outsourcing contracts, is no longer the main reason why suppliers are chosen. He says because IBM for example can combine low cost delivery with R&D based services. He says the likes of Infosys and TCS need to be able to link R&D with services if they are become like IBM.

Here is a Computer Weekly profile of India’s second largest IT services firm Infosys. You have to sign up but its free. 

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