Forrester analyst Andrew Bartels is quoted in an article on the Wall Street Journal website as saying that Indian suppliers, who currently make billions of pounds offering outsourcing services, would be better served if they did more sales of software.
Forrester says IT outsourcing will grow only 5.2% this year compared to 13.4% growth in spending on computer equipment, including software.
“Outsourcing is becoming a much more mature industry,” said Bartells. “Growth is slowing in those categories. Even if volumes of deals are rising, the revenues are growing very slowly because of falling prices.”
He said Indian vendors like Tata Consultancy Services, Infosys and Wipro can better should “take their development activities from systems integration projects and turn that into software that can be reused or potentially sold to new clients with much better leverage and much better margins.”
Maybe MindTree’s plan to white label Linux smatphones is a good plan.
Wipro’s plan is to increase its consultancy business, so could this be an expensive mistake?