Mid-sized tech firms face decline in offshoring
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Mid-sized tech firms face decline in offshoring

By SiliconIndia   |   Thursday, 15 March 2007, 05:00 Hrs
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Bangalore: The offshoring of IT services towards India has clearly brought in a sharp divergence between big and rest of the Indian companies, according to an analyst firm, Forrester.

Sudin Apte, senior analyst, Forrester, revealed, "Everything in offshore is not doing well." According to Forrester during financial year 2004, the top three Indian IT services vendors-Tata Consultancy Services, Infosys, Wipro, accounted for 26 percent of the country?s exports and three years down the line their share has gone up to 41 percent.

Apte said that around 500 Indian IT companies have experienced growth less than the industry average of around 28-30 percent. The top three giants have shown a revenue growth of 40 percent in FY06, while rest of the 20 Nasscom-rated IT companies has shown around 20 percent growth. The analyst firm felt that ?the midsized firms need to specialize o perish.?

The moderate growth of two-tire IT firms is also bringing pressure on its client base, according to Apte. According to a national daily, Forrester says that the diminishing the brand value of the mid sized companies has hampered it from attracting talent. Further, it?s dispersed client base and does not allow it to specialize in any particular area.
Apte stated that the consolidation in Indian IT industry is expected to be faster than the past. He felt that the next 12-18 months would be crucial for these companies as they look at making their foray into the higher league.

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