New Delhi: India’s top three software services companies will continue to build on their presence in technology and back-office markets to rank alongside industry leaders such as IBM Global Services, Accenture Ltd and Electronic Data Systems Corp. (EDS) by 2011, research firm Gartner Inc. has predicted.
Big players: The TCS office building in Noida. TCS, Infosys and Wipro are the top-ranked Indian technology vendors by revenue. Photograph: Harikrishna Katragadda / Mint
Tata Consultancy Services Ltd, or TCS, Infosys Technologies Ltd and Wipro Ltd—collectively called ‘India-3’ by Gartner—are the top-ranked Indian technology vendors by revenue but are dwarfed by IBM Global Services, a division of International Business Machines Corp. with some $50 billion (Rs2.13 trillion) in revenue.
“The India-3 have leveraged their strong success with meeting client needs to achieve record growth levels during a long period of time (30 quarters continuously) and have outperformed the incumbent megavendors by almost a 3:1 margin in growth rates,” Gartner said in a statement. “The market capitalization of the Indian providers is significantly higher than that of EDS, and almost on par with Accenture, which are much larger companies in terms of revenue.”
The “emerging megavendors” have more than doubled their revenue in four years, with the 2007 revenue being 2.6 times that of 2004, said Partha Iyengar, vice-president at Gartner. “This level of growth differential has continued even as these vendors have become multibillion dollar enterprises. To put this in context, there are just 100 service enterprises globally with more than $1 billion in revenue.”
Yet, one of the challenges facing the Indian vendors is the revenue generated by each employee at these companies. The average revenue per employee across the three firms for 2007 was some $46,143.33, compared with $143,816.66 for the three global firms.
“The Indian providers will have to address the issue of moving away from resource-intensive revenue growth to a model that provides higher leverage and increases revenue without a linear relationship to head count, which is the situation that exists today,” Gartner said. “They will have to achieve similar levels of revenue per employee benchmarks to truly achieve megavendors status.”