Thursday, September 27, 2007

SWITCH to India!

The big story today is how Indian IT services is playing a role in the world of IT services. From Hindu Businessline and Business Standard.

Technology research firm Gartner Inc said the top six Indian IT services firm, collectively referred to as SWITCH companies (TCS, Infosys, Wipro, Cognizant, Satyam and HCL Technologies), accounted for 1.9 per cent of the total $672 billion IT services market in 2006, compared with 0.5 per cent of the $554 billion mart in 2001.

Now, of course, there is a positive and negative aspect to this. The negative, we all know. Positive being that the market share of Indian companies has gone up by about 4 times and the biggest player in this segment, IBM has about 7.2 percent marketshare. So, theres a lot of room for growth for this set of companies either individually or globally.

Gartner itself thinks that If the Indian IT service providers continue to grow at the current pace, at least two companies will be a part of the top ten companies globally by 2010

There is a big story here and you are seeing it all around you. The glass is half full or half empty depending on how you see it.

So, what is the way to grow? One, obvious way is to grow organically as many of these companies have been doing. But even organically, there are many strategies – some of which could involve higher risk like picking up a start up which has a potential for a product and then try and develop it (TCS recent partnership with Cassat). Or you could pick up slightly different businesses and augment your skillsets (Wipro here). Or you could buy a similar company elsewhere. (Infosys acquiring Expert Australia).

There is no one way, but only one direction, that of growth. To use a well repeated parable to illustrate the situation:

Every morning in Africa, a gazelle wakes up. It knows that it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows that it must out run the slowest gazelle or it will starve.

It does not matter whether you are a lion or gazelle.When the sun comes up you had better be running.

No comments: