Top20: More Domestic Play
Though exports continued to be the bread and butter, and, therefore, the focus, for many of the DQ Top 20, its contribution to the Top 20 kitty came down a point from 55% in 2004-05 to 54% last year. That happened not because of any decline in exports, but simply because one exporter, i-flex, dropped out of the DQTop20 (it's now at #21) while two domestic players, Lenovo and e-Sys, came in; even as Tech Pacific merged into Ingram (both domestic players).

High-value Orders
The Indian players are no more in the humdrum business sphere. The scope and value of orders grabbed by them show that they're moving up the value chain, as large domestic and global users are showing more trust in them. So this should be celebration time for the solution providers who have got the opportunity to prove their worth in the high-end market. While business is pouring in from many parts of the world, the local IT companies are gearing up to satisfy the buyers' demand that spans diverse requirements including infrastructure management, application support, and solutions for specialized domains like telecom billing, insurance, retail, engineering services, among others.

Most companies that followed a reactive marketing approach are now becoming more proactive in exploring the opportunities and offering solutions for emerging needs. TCS, for example, smelled the potential in on-demand business and became a strategic partner of salesforce.com, a technology and market leader in on-demand customer relationship management (CRM). Under the arrangement, TCS will develop and deploy on-demand business applications on the salesforce.com AppExchange. Likewise, many companies such as HCL, Wipro, TCS, and others are extremely aggressive in the managed services space.

Moreover, there are other potential areas such as engineering services that are drawing the gaze of solution exporters. It's estimated that the worldwide market for outsourced engineering is growing rapidly. Indian companies are keeping a close eye on this demand. And TCS' contract with Ferrari last year should provide a cue to others trying to explore offshore engineering services.

Another trend is visible, as now it's not only the advanced US market that prefers to buy solutions from Indian vendors. Even small countries are showing increased interest for solutions supplied by Indian IT companies. Take Saudi Telecom Company, for example. It preferred to place the Rs 253-crore order on TCS for customer care services and billing solutions. Such orders are in fact giving an opportunity to suppliers to reduce their dependence on the traditional US market. For this, vendors are also spreading their operations in the European markets. This is evident from the Rs 1,500-crore contract that HCL won from DSG International (a European company) for providing applications, systems, and IT infrastructure. Similarly, Infosys has signed a three-year offshoring contract with Australia's Mayne Group. The order will cover application support and change management for the company's SAP finance and payroll applications. Moreover, NIIT Technologies bagged a European insurance and financial services contract from major Generali Group to revamp the Group's IT systems. Patni Computers is also supplying its services to The Carphone Warehouse of UK for supporting its warehouse delivery platform and wireless and Mobile Virtual Network Operator capabilities.

Today, even big global user organizations are showing utmost faith in the capabilities of Indian suppliers. Wipro has proved this by taking a five-year order from General Motors for IT services. Similarly, Satyam grabbed a six-year contract from Nissan Motor to maintain, support, and enhance its application software portfolio. These orders indicate that Indian players are moving up the value chain, and have attracted even the large buyers for their services. Supported by their enhanced domain knowledge, they're able to satisfy the global customers in the high-end application domains.

The objective of most players is to strengthen their bottom lines by delivering high-value services that also ensure higher margins. Since most players in India have deeper pockets now, they prefer to acquire small companies abroad to gain sufficient skills to execute orders in specialized niche areas. This helps them conserve time to market their services, as they realize that the delivery and deliverables are equally important to attract buyers in the cut-throat marketplace.

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