Indian Service Providers Connive to Survive

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    AMR Research analysts Lance Travis and Marc A. Meunier predict that we’ll see more India-based service providers trying to cross that chasm between being vendors of development and maintenance to being “transformational” providers.

    This is, of course, nothing new. Indian vendors have been talking for several years about “moving up the food chain” and gaining a more strategic role within the business of their client companies.

    But Mr. Travis and Mr. Meunier say the motivation is being lit by the fact that these providers are tapping the outer limits of their market — that to continue ensuring their double digit (30%!) growth year over year this new direction will become a mandate.

    I’ll call this movement “connive to survive.”

    Frankly, I think few will succeed. There’s plenty of high-profile consulting help out there already available to Corporate America, so competition will be fierce to gain those opportunities. Another form of competition will come from inside client companies. After all, what senior VP these days doesn’t fancy himself or herself a change agent ready to take the corporation to new heights of strategic greatness?

    The Indian firms that do succeed will be headed by truly remarkable managers who have served time at the same US and European companies that they’re now selling back to. They'll have to worm their way into the personal contacts that are essential in gaining work beyond simple functions or basic projects. These are few and far between. Yes, NASSCOM reported last year that 25,000 IT professionals had returned home to make their mark in India’s outsourcing industry. But these are the same folks who worked in the apparently dysfunctional IT operations being outsourced here.

    So, I suppose what Mr. Travis and Mr. Meunier are really saying is that the India service provider market is aching for a shaking (out).

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