The Next Generation of IT Service Megavendors...?

Look at this Gartner prediction for 2011 – We are approaching 2011 very soon….

http://www.gartner.com/it/page.jsp?id=741012

(Data from 2004 to 2007)

Challenges that were in 2008 –

The Indian providers will have to address the issue of moving away from resource-intensive revenue growth to a model that provides higher leverage and increases revenue without a linear relationship to head count, which is the situation that exists today. They will have to achieve similar (to the current megavendors) levels of revenue per employee benchmarks to truly achieve megavendor status. Furthermore, they will increasingly have to deal with the business constituency that is often deeply involved in these higher-end projects and develop strong relationships with the business stakeholders.

	2009				2008				2007
	Revenue	Employee	Net Margin		Revenue	Employees	Net Margin		Revenue	Employees	Net Margin
Capgemini	11.7b	90500	7.1%		12.2b	91600	8.5%		12.2b	83500	7.4%
Infosys	4.8b	92688	27.3%		4.66b	85851	27.5%		4.17b	75000	27.9%
Wipro	4.39b	97000	21.0%		4.32b	65000	21.0%		3.65b	45000	21.0%
TCS	6.4b	142000	23.0%		6.0b	110000	19.0%		5.71b	89000	22.0%
CSC	16.7b	92000	6.6%		16b	89000	2.7%		14b	79000	3.3%
Accenture	23b	180000	12.3%		25b	175000	12.9%		21b	170000	12.7%

What are challenges ahead?

-          Last three years growth has stagnated across the board or there is de-growth as well.

-          How do non linear or platform based growth achieved?

-          Low cost along with revenue growth – big challenge – At least reduce cost for customer by 20%-25% over three years.

Comments?

-Cheers