India leads Apac as mkt for IT outsourcing
India has emerged as the largest domestic market for IT outsourcing in the Asia Pacific region in the first half of 2007, according to TPI, a sourcing advisory firm.
In its latest quarterly index report, TPI said the IT outsourcing domestic market in Indian for the first half of 2007 stood at $1.6 billion, ahead of Japan and Australia. Mr.Siddarth Pai, partner, TPI India, said this showed the strength of the Indian domestic IT market.
The company has been among the top three IT outsourcing markets in Asia-Pacific for a couple of quarters. And for the first time, it has reached the top.
The growth in the domestic market has been fuelled primarily by the telecom and finance sectors in the first half and the lion’s share was taken by two deals - Idea Cellular-IBM and Reliance-Alcatel. The TPI study took into account only those deals which are above $25 million, the market size is likely to be thrice higher than the current estimated value.
Some of the larger outsourcing deals in India have been IBM-Bharti, Accenture-Dabur and Bank of Baroda-HP. The Indian market also accounts for 30% of the total IT outsourcing market in Asia-Pacific. However, the strong growth being witnessed in Asia-Pacific is not being matched globally as there is a slowdown in the outsourcing market. TPI’s quarterly index has shown that the growth of the IT outsourcing market with contracts above $50 million has been slowing down.
Mr.Mark Mayo, partner, TPI, said this trend is expected to continue for the rest of the year and would not match the buoyancy of 2006. TPI said contracts worth over $50 million have been down 25% and even the actual contract value has seen a drop of 23%. Mr.Mayo said this softening of outsourcing growth rate is due to multiple factors such as a single contract being given to several palyers and deals having a shorter duration.
