JOIN USCognizant has displaced Infosys to become the second largest Indian IT services provider in 2012, according to research firm Gartner.
Cognizant experienced the highest growth rate among the top five providers with an increase of 20.1 per cent in 2012, Gartner said on Tuesday, adding that IT services leader TCS has closed in on the top 10 worldwide market share leaders, with less than $1.5 billion separating it from the 10th ranked provider Hitachi.
Cognizant’s key rivals in the US IT services market, Bangalore-based Infosys Ltd and Wipro Ltd, showed revenue growth of just 7.6 per cent and 6.6 per cent respectively in 2012. Top-ranked Tata Consultancy Services (TCS), the Mumbai-based IT arm of the Tata Group, posted 15.2 per cent growth in 2012, while fifth placed HCL Technologies grew its revenues by 18.1 per cent.
The top five Indian IT services providers grew 13.3 to reach $34.3 billion per cent In 2012, exceeding the global IT services industry growth rate of 2 per cent. The rate of growth decelerated for both industry groups, from 21.8 per cent and 7.7 per cent, in 2011.
Arup Roy, research director at Gartner, said that Indian players are providers with a predominantly India-based delivery model and management that is largely India-based. Most are headquartered in India, but there are some exceptions, such as Genpact, Cognizant, Syntel and iGate, who are headquartered in the US.
“The growth rate of India-based providers has been slowing for some years, but in 2012 this trend was more pronounced. This growth rate is still quite high compared with IT services worldwide, or the growth of the top 10 global IT services providers. The global top 10 providers are larger in their base revenue and more diversified than the India-based providers,” Roy said.
Noting that the top five Indian service providers have continuously chipped away market share from the large multinational corporation providers, he said that in the past five years, they have been winning large outsourcing deals (those with a total contract value of more than $100 million). “Their target customer segment still remains the Fortune 1000 companies. Most of these firms have a large-deal pursuit sales team that goes after deals of more than $35 million in contract value,” Roy said.
The industry is now placing strong focus on (and investments in) cloud, analytics, mobility, infrastructure and knowledge processes. “India-based providers have become much more aggressive in infrastructure management because it offers them the potential to grow bottom-up within accounts.”
All providers have a strong focus on infrastructure services, particularly remote infrastructure management services, which account for 65-70 per cent of their infrastructure services revenues.
Revenue contribution from project-based and staff augmentation deals has continued to decline for the top five Indian-based providers, and the outsourcing service line component has steadily increased. “They have also made significant strides in developing industry-specific BPO services through acquisitions and organic growth. There is an increasing focus on ‘integrated services play’,” Roy pointed out.