Indian service providers are gaining their share of the global IT market, according to Gartner Research.  Gartner believes that this increase in market share is the result of buyers breaking down large, multibillion orders into smaller ones that can be handled by Indian suppliers and growing customer confidence.

The top six Indian global sourcing providers, which include Satyam, Wipro, Infosys, Tata Consultancy Services, Congizant and HCL Technologies, made up approximately 2.4 percent of the total global IT services market in 2007.  There was a 0.5 percent increase in market share from 2006 and there has been exponential growth over the last few years.  Many experts speculate that India’s market share will continue to grow.

India has become a top destination for global IT sourcing for many reasons.  The country boasts low labor costs, highly skilled professionals and strong government support.  Indian suppliers have continued to provide buyers with high quality work at reasonable prices.  A large majority of IT employees in India are fluent in the English language, which makes communication easier between the buyer and supplier.

India’s growth in market share has also been the result of the vendors’ strength in application development and maintenance.  Global IT sourcing providers have been able to obtain larger orders for application development and maintenance and it is estimated that they have about 40 percent of the market.

Some challenges exist for Indian service providers, such as growing staff expenses, staff attrition, the weakening dollar against the Indian rupee and the country’s dependence on the U.S. market, which makes up approximately 60 percent of their sales.  Also, large companies like IBM and Accenture have set up offices in India to benefit from the country’s lower labor costs.

Many of the Indian global IT sourcing providers are looking to buyers in other countries as possible sources of revenue.  These suppliers are trying to lessen the dependency on the United States.  Attempts to tap other markets have already been successful as the Indian service providers’ share of the total Western European IT services market has increased.   The top Indian global sourcing providers have also been adding services to boost revenue, such as remote infrastructure management.

While India is a great destination for global IT sourcing, there are many other countries that offer benefits to buyers.  A&E Consulting offers insight into choosing the right location for global outsourcing and will oversee the first outsourced project.

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