Small IT firms plunk Infy/Wipro clone

By agencies   |   Thursday, 27 April 2006, 07:00 Hrs
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NEW DELHI: There is no jolt in being an Infosys or Wipro or TCS clone anymore. Small IT firms and starts-ups have raised their bar of expectations and they want their clients to be aware of this.

Small IT firms such as Symphony, Aztec, Persistent, Aspire and Impetus claim themselves to be members of a new tribe called outsourced product development (OPD) providers, where billing rates are 20-25 percent higher and growth potential double that in plain vanilla IT services outsourcing.

According to industry estimates, the OPD segment is expected to grow at around 60 percent on a year-on-year basis for the next four years. Compared to this, traditional IT services outsourcing (application and maintenance) is projected to grow at 30 percent CAGR.

Ajay Kela, president of Symphony Services India said “The typical IT services outsourcing is becoming a commodity business where price is the now the only USP. In comparison, OPD is a young industry with a greater upside potential both in terms of revenue and profit margins.” With a revenue run rate of $100 million, the company claims to the biggest standalone player in this space.

Other executives’ points towards the issue of survival. “The typical IT outsourcing is becoming a scale sensitive business and tier-1 companies have a huge brand presence there. Smaller companies like ours have to find new niches.

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