Differentiation is a strategy; rebellion is an attitude. All challengers try to differentiate; few choose to rebel. HCL did. It challenged the offshoring status quo by looking at the business differently in every possible way. If ADM was the forte of the Big Three, HCL started focusing on infrastructure services and engineering; if time- and material-based pricing was the established order, HCL started pushing the output-based business ready infrastructure (BRI); if Fortune 1000 companies were chased by the offshoring leaders, HCL consciously started to target the medium sized companies too; and finally, in FY 07, when many Indian services firms rushed to buy companies overseas, HCL went through the year without a single acquisition.

Though the jury is still out on the long-term impact of what critics call HCLs desperate differentiation, the operational metrics in FY 07 showed that HCLs strategy is paying off. Its ADM revenue is just 40%industrys lowest and Infra Services is 13.5% of the totalindustrys highest.

HCL won some multi-million dollar deals, but also managed transformational deals from small firms like Insituform where it is growing the relationship with companys business expansion.

But HCLs aggressive growth strategy has not worked well everywhere. In BPO, where it was one of the first IT firms to enter, the aggressive growth targets made it enter the low-margin voice business. Though HCL did manage to improve margins last year, it has not been able to leverage its IT capability for BPO something that almost all large IT services firms have now achieved fairly successfully. DQ

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