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Indian IT Services: Shaping Up for the Next Big Push
Published: February 24, 2011 in India Knowledge@Wharton
Earlier this month, newspaper headlines in India about US$5 billion worth of IT outsourcing orders expected from large U.S. banks brought cheer to the Indian IT services industry. In recent months, industry players have been expecting the return of good times, and this news reinforced their optimism. But experts say the US$60 billion industry needs to retool and reposition itself or it risks losing out on growth. According to Sudin Apte, principal analyst and CEO at research firm Offshore Insights: "Businesses in the U.S. and Europe have undergone dramatic changes. The paradigm at their end has changed and so have the needs and requirements from their technology vendors. If Indian IT firms want to stay in the game, they need to change, too."
Meanwhile, the country's top IT firms are close to shuffling positions. While Tata Consultancy Services (TCS) and Infosys Technologies continue to hold sway, Cognizant Technologies, currently the fourth-largest player, is threateningly close to unseating Wipro Technologies for the third slot. In the last quarter, Cognizant's revenues grew 45% to reach US$1.31 billion; Wipro was marginally ahead with US$1.34 billion in revenues from IT services. Also getting ready to join the club is iGate, which last month entered the billion-dollar revenue club after buying Patni Computers in a US$1.2 billion deal -- one of the largest acquisitions within the Indian outsourcing industry. Mahindra Satyam, the rechristened former No.3 Satyam Technologies, is bouncing back after a financial scandal orchestrated by its founder Ramalinga Raju nearly sent it into oblivion two years ago. A merger with Tech Mahindra, which will happen once the scam probe is complete, will boost its topline.
The business opportunity landscape for Indian IT

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