TCS, Infosys, Wipro set to emerge as megavendors by 2011: Gartner

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Mumbai, Aug 13 (UNI) The country's IT giants Tata Consultancy Services (TCS), Infosys Technologies and Wipro Technologies, are set to emerge as the next generation of IT service megavendors, according to a study conducted by IT research and advisory company, Gartner.

The ''India-3'' as they are collectively known, are increasingly making inroads in clinching strategic service deals, with a combination of low-cost, high-quality services, and will augment or replace today's acknowledged megavendors like IBM Global Services, Accenture and EDS in revenues by 2011, the report said today.

Excelling in four critical competencies-process excellence world-class HR practices, providing high quality services at a low cost, the achievement of significant and disproportionate 'mind share' compared to their actual size are the crux of India 3's rapid growth.

Leveraging their success, India 3 have achieved record growth levels during 30 continous quarters and have outperformed the incumbent megavendors by almost a 3:1 margin in growth rates.

''The emerging megavendors have more than doubled their revenue in a four-year period, with the 2007 revenue being 2.6 times the 2004 revenue. To put this in context, there are just 100 service enterprises globally with more than USD one billion in revenue,'' Gartner Vice President Partha Iyengar said.

To achieve the level of performance and maintain it, India-3 have also invested heavily on establishing frameworks, aggressive marketing of its capabilities and delivering consistent, predictable results.

High level of Human Resource management has also contributed to the success of the ''big three'' with more than 30,000 people being added to their workforce every year. The recruitment, training, induction of world class employees has been a significant competitive differentiator for the Indian companies.

However, there are still significant gaps in revenue with TCS earning USD 5,718 million in revenue in 2007 with 1,11,407 employees, compared to USD 54,144 million for IBM Global Services for the same period with 3,68,558 employees.

To really get to the top of the IT service hill, the companies will need to move away from resource-intensive revenue growth to a model that provides higher leverage and increases revenue without a linear relationship to head count, the report said.

They will also have to achieve similar levels of revenue per employee benchmarks, deal with the business constituency that is often deeply involved in higher-end projects and develop strong relationships with the business stakeholders.

''The current standing of the India-3 will need to expand quickly to keep pace with the changing client environment for IT delivery in the future,'' Mr Iyengar observed.

UNI ZC ZA/SSS SKB1628

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