TCS, Satyam, Wipro Betting Big On Indian Services Market

With the Indian economy growing at a healthy rate and change in rupee-dollar equation, domestic IT behemoths like TCS, Infosys, Wipro and Satyam, who till recently favoured the greenback market, are now looking at opportunities in their own backyard.

Indian vendors are now eyeing opportunities in the Indian services market as they intend to garner a larger share of the market, which is dominated by global players like IBM and HP.

Analysts feel that with the slowdown in Western markets, the dollar’s weakness against the rupee and the uncertainties arising from the slowdown of the US economy, Indian IT vendors are re-thinking their strategy and exploring non-US markets including India.

However, TCS, Satyam and Wipro feels that it is not the slowdown but the increased spending on IT by the government and corporates that is fuelling the growth of this sector and attracting IT vendors to explore the market.

“The rapid economic growth and the growing stature of Indian corporates, who are adopting IT on a much wider scale now, presents a huge opportunity for IT services companies,” Wipro Infotech chief executive Anand Sankaran said.

Moreover, the size of the IT deals in the country is also expanding, which is making this sector attractive and profitable at the same time. “Earlier, the average size of deals in India was about $2-3 million and now multi-year deals worth $100 million or more is not unheard of in the domestic market,” TCS vice president and head (India), S Venkatramani said. “The average size of deals is now 25-30 million dollars,” he added.

TCS, which earns 10 per cent of its global revenues from the domestic market, has a team of 7,000-9,000 members focussed on the Indian market. The company has already restructured its India team and has also created different verticals such as retail, utilities and telecom to capitalise on opportunities in these respective sectors.

Satyam Computers, which is working on various e-governance projects is also planning to increase and strengthen its India team, according to Satyam India head, Ranjan Tayal.

Wipro is also focussing on emerging vertical-specific opportunities in retail, infrastructure, defence, financial services and telecom.

“Wipro Infotech will continue to launch new services in India and is focussing on emerging technologies such as Service Oriented Architecture and advanced technologies like Unified Communications, Virtualisation and the like in the Indian market,” Sankaran said.

According to the latest Forrester report, the Indian IT Market is expected to grow by 18 percent in the year 2008 to reach $38 billion, clocking the second highest growth rate after China (20 percent growth; to touch $138 billion in size).