Indian IT firms missing out $53 Billion market
By siliconindia   |   Wednesday, 19 May 2010, 23:11 IST   |    2 Comments
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Indian IT firms missing out $53 Billion market
New Delhi: Indian companies earning less than $2.6 billion from Germanic region across the IT, BPO and engineering services space as against the addressable market size of more than $53 billion, says a report. The report, 'Opportunities for Indian IT-BPO industry in Germanic countries' launched by National Association of Software Service Companies (NASSCOM), in association with consulting firm PricewaterhouseCoopers, focuses on the on identifying partnership opportunities for both India and Germanic countries in the area of IT services, BPO and engineering services. Business from Germanic region which is the largest market in Europe has the potential to grow to $10 billion by 2020, provided Indian companies take the strategic and tactical steps required to succeed in this market. The BPO market alone is estimated to be around $4 billion and offshored engineering services around $3.4 billion. Germany and Austria; each spends close to 2.5 percent of the GDP on IT, whereas Switzerland leads the norm by spending over 5 percent. At the launch of report, Sankar Ramamurthy, Executive Director, PricewaterhouseCoopers, said, "Long term commitment and effective partnerships would emerge as the biggest deciding factor that will sway client contracts towards Indian IT companies in the region. There is a huge demand in the SME sector that has largely remained untapped, and verticals like Automobile, Manufacturing, and Logistics have emerged as quick-win opportunities for Indian companies." Speaking at the same lines NASSCOM President, Som Mittal, said, "The Germanic countries are facing acute talent shortages in the knowledge based sectors like IT and Engineering services. India is a natural partner, complementing the needs with a large technically qualified talent based, global experience and lower cost credentials. Current European uncertainties are short term in nature and we are confident that the European bloc as a whole will continue to be one of the largest markets for the Indian IT - BPO Industry." There also lies huge opportunity in the large mid-market segment in the Germanic region. More than 95 percent of the enterprises in the Germanic countries in the fields of chemical, machine building, automotive and electrical belong to the small and medium size enterprise segment. This is where the Indian IT firms that have access to a pool of technically skilled work force should capitalise by seeking partnerships with similar-sized Germanic companies for front-end capabilities. Newer partnership models on joint product development can help built a viable SME segment in both markets The report identifies Germanic companies amongst the early adopters of outsourcing (not offshoring) and many companies in the region have well defined IT outsourcing and vendor expertise. India is amongst the preferred destination for off shoring. Eastern Europe and the CIS states including Russia with the nearshore capabilities are the more attractive options for the Germanic clients.

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