Infosys to team up with Wipro, HP for local contracts

By siliconindia   |   Friday, 30 November 2007, 03:25 Hrs
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Bangalore: Aimed at bidding the contracts within the country, Infosys Technologies, India's second largest software services company will work with partners such as Wipro Infotech, the local unit of rival software firm Wipro and Hewlett-Packard (HP), reported livemint.

Unlike firms in the US and Europe, customers in India, predominantly the government, prefer information technology (IT) vendors who implement projects and provide both hardware and software.

"India is more of a system integration market and less of pure-play software business," said V. Balakrishnan, Chief Financial Officer of Infosys. "We will go as a consortium." System integrators provide hardware and software and make them work together.

According to Arup Roy, senior analyst at Gartner, a technology research and advisory firm, the domestic IT market is largely driven by hardware (suppliers). Companies such as IBM (and) HP have a strong hardware play.

Multinational vendors such as IBM, Accenture and HP, have typically won more contracts from local customers than Indian vendors such as Wipro and HCL Infosystems. "We have just started a business unit focusing on the domestic market and we have to work with partners," said Balakrishnan.

Thogh Infosys already works with Wipro Infotech and HP to implement its banking solution, Finacle, for local banks, Infosys earned only about one percent of its 4,106 crore revenues for the quarter ended September from local customers.

According to Gartner, the Indian IT services market stood at $3.7 billion in 2006 and is expected to grow at a compounded annual growth rate of 23.2 percent to reach $10.7 billion by 2011.

Infosys, had largely kept out of the Indian market due to lower billing rates and absence of cost advantage that they leverage from overseas customers working from a low-cost country.

Infosys said it expects more technology spending from organizations such as the Indian Railways and the Reserve Bank of India, followed by firms in telecom, banking, financial services and retail sectors.

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