India's IT software and services exports from Top 10 firms crossed the US$ 15 billion mark, touching Rs. 68,236 crore during 2006-07, according to an industry survey and analysis by CyberMedia's flagship magazine Dataquest.
The Top 3 firms-TCS, Infosys and Wipro--earned about US$ 8.7 billon (Rs. 39,260 crore ). The next four slots have been taken up by Satyam (Rs. 5,789 crore), IBM (Rs. 4,880 crore ), HCL Technologies (Rs. 4,598 crore) and Cognizant (Rs. 4,584 crore). With this line there is no change in the rankings of the Top 7 of the Top 10 software firms.
Seven of the DQ Top 10 software firms are Indian multi national companies. The software and services exports of India development centres of foreign multi national companies who made to the Top 10 list--IBM, Cognizant and Oracle--added up to Rs. 13,127 crore. The revenues of Oracle combine those of I-flex post integration during the year.
Oracle and Tech Mahindra stormed into the DQ Top 10 at No. 8 and No. 9 with revenues of Rs. 3,663 crore and Rs. 2,890 crore. Patni Computers slipped two positions to No10 with revenues of Rs. 2,573 crore.
Interestingly even in the Top 10 list, the growth is not consistent. It varies from as high as 135% (Tech Mahindra) to as low as 23% (Patni).
Europe is the next big market
Highlighting the trends observed during the year Mr. Prasanto K. Roy, Chief Editor of Dataquest said, "Almost all companies saw their share of revenues from Europe grow significantly in FY 07.
"Apart from being a faster growing market for offshoring, the weakening dollar too has forced the software majors to de-risk by looking outside the USA ; and Europe is the next big market," Mr. Roy added.
Dataquest Top 10 Software & Services Exporters 2007
Rank |
Company |
FY 07, Rs. cr. |
Growth % |
1 |
TCS |
15,881 |
38 |
2 |
Infosys |
13,025 |
45 |
3 |
Wipro |
10,354 |
39 |
4 |
Satyam |
5,789 |
28 |
5 |
IBM |
4,880 |
67 |
6 |
HCL Technologies |
4,598 |
41 |
7 |
Cognizant |
4,584 |
83 |
8 |
Oracle India * |
3,663 |
55 |
9 |
Tech Mahindra |
2,890 |
135 |
10 |
Patni |
2,573 |
23 |
|
Total |
68,236 |
46 |
* Oracle revenue includes iFlex. Growth is over last year's Oracle+iFlex
All figures are IT services exports only. They exclude BPO revenues and any domestic services revenues.
All large IT services firms are focusing on integrating their BPO operations with IT, resulting in faster growth for BPO. TCS, even though a late entrant in the BPO space, started offering integrated IT-BPO services and overtook Wipro BPO to become the largest BPO player among the IT services firms.
Almost all Indian players focused on bringing down their revenue share from Application Development and Maintenance (ADM) and succeeded. Managed Infrastructure Services emerged as the new favourite.
Infosys, which had identified IP creation as a major thrust, at the end of the year, had 81 patent filings.
Commenting on the impact of weakening dollar on the revenues, Mr. Shyamanuja Das, Analyst and Executive Editor, Dataquest, "The weakening dollar and stronger rupee wasn't really felt by exporters until the later half of 2006-07,. C ontrary to popular perception, the average value of the dollar in rupees was higher in 2006-07 than in 2005-06!
"It is only during the Jan-Mar '07 quarter that decline accelerated, and in Apr-Jun '07, declined further and rapidly to the Rs. 40 level. This will really hit exporters hard this year" he added.
Based on average monthly values (available on forex trading sites like xe.com ), the average dollar value in 2006-07 was Rs. 45.05, vs. Rs. 44.11.
Acquisitions for acquiring skill
Acquisition to acquire skill has become the common strategy for Indian IT services providers to strengthen capability and ensure future growth. No one has yet invested in a big merger for acquiring scale, the grapevine about Infosys bidding for Cap Gemini notwithstanding.
Wipro continued with its string of pearls acquisition strategy and successfully managed a transformation of its BPO unit, temporarily affecting growth but increasing realization.
IBM, with close to 55,000 people today, is next only to the top three Indian IT companies in terms of manpower. The hiring in India will continue with CEO Sam Palmisano's announcement of a $6 billion investment over the next three years.
The growth of Tech Mahindra, the only focused player in the Top 10 club, clearly proves why differentiation is key for Tier II companies. It also managed to bag the largest deal among Indian IT services providers — a $1 billion contract from British Telecom.
|
