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Indian IT biggies scout for captive deals in Europe
By siliconindia
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Wednesday, 19 November 2008, 16:37 IST |
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Bangalore: With the slowdown gulping down a major portion of their revenues from U.S. the top Indian firms are turning to Europe to grab a share of the region's IT outsourcing budget. The main target for IT service in Europe include UK, which is a $50-60 billion market, $40-45 billion Germany market and France where the IT service market accounts for $35-40 billion.
Companies like Wipro, Infosys and TCS are scrutinizing captive deals which will increase their revenues from Europe. The IT firms have planned for the acquisition of captive information technology units of outsourcing biggies for a range of $400 to $500 million or even more, as per the amount of the IT work to be done. As reported by Economic Times, a senior official said, "These captives can bring an annual revenue run rate of at least $300 million." Infact, these deals will enable the companies to garner a captive customer with assured annual revenues.
The most luring bet for the outsourcing deals will mainly be some of the German companies like Volvo, Bosch, Lufthansa and BMW, who have carved out their IT departments into fully-owned subsidiaries. For instance, Volvo IT employs around 5000 professionals apart from their external contractors, whose number amounts to around 2000 employees. Even Lufthansa airlines had created their IT subsidiary named Lufthansa Systems AG, which employs around 3000 employees and generates revenue of $860 million.