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The $50-billion IT services industry is in for tough days. And this time, it’s not just a slowdown in spending that’s worrying
The $50-billion IT services industry is in for tough days. And this time, it’s not just a slowdown in spending that’s worrying, but increasing competition from multinational service providers who have ramped up significantly.
With a robust low-cost delivery model in place, MNC IT services companies like IBM, Accenture, HP-EDS and CSC have bagged quite a few new offshoring contracts in recent times. New IT deals offshored to India and other low-cost destinations from firms like United Healthcare, Universal Music Group, Hartford Insurance, Bristol Myers Smith, ICAP, BHP Billiton, Bombardier, P&G , Ericsson and Banco Fondo Comun (a Venezuela bank) have gone to MNCs. Incidentally, in many of these contracts—multi-year $50-500-million deals—Indian IT and BPO companies were already providing services for the clients. And in most cases, MNCs bagged the new offshored work beating Indian service providers.
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