indian software industry details report on all it industry of india

INDIAN SOFTWARE INDUSTRY The Growth Saga Cont inues This case has been written by J. Ramachandran, BOC Professor of Business Policy and Pranav Garg, Research Associate, both at the Indian Institute of Management Bangalore, based on publicly available information. This case was developed solely as a basis for class discussion. It is not intended to serve as an endorsement, source of primary data or an illustration of either effective or ineffective management. © 2006, Indian Institute of Management Bangalore

Indian Software Industry: The Growth Saga Continues

In October 2005, Infosys Technologies Limited, the Indian software major, reported growth in its quarterly revenues for the fifteenth consecutive quarter. The other software majors - Tata Consultancy Services (TCS), Wipro Technologies (Wipro) and Satyam Computer Services (Satyam) and the rest of the industry soon followed with similar reports, thus sustaining the remarkable industry growth saga that began over a decade ago. Despite the ongoing rhetoric against the offshoring of work in the major markets for the industry, especially in the United States, the growth continued. Unabated. In the last five years, the industry has more than tripled its exports (Exhibit 1); enhanced its service offerings (Exhibit 2); diversified its geographic presence (Exhibit 3); and expanded its customer base by focusing on new vertical markets (Exhibit 4). More importantly, the growth of the Indian industry is increasingly getting de-linked from swings in global information technology (IT) spending. Greater availability of international bandwidth and powerful workflow management software is fundamentally unbundling the services value chain and driving outsourcing of IT services. It is now possible to disaggregate any business process, execute the sub-processes in dispersed global locations, and re-assemble them almost instantaneously wherever required. Consequently, global IT spending priorities are shifting towards offshoring. For example, in the past couple of years, the Indian industry has witnessed ramping up of captive offshore development initiatives by multinational companies. Further, pressure to offshore from clients in search of lower prices and productivity benefits has forced even the predominantly “on shore” delivery oriented IT service companies such as IBM Global Services, Accenture, EDS, CSC etc to scale their offshore operations in general and their Indian operations in particular.a In April 2004, IBM acquired Daksh, the second largest Indian business process outsourcing (BPO) service provider and recently Accenture announced plans to establish Accenture Technology Labs, a high-end R&D centre, in India. The securities firm CLSA estimates that by March 2006, the global service majors would employ over 140,000 people, almost three times the number two years ago. Thus, India, despite dire predictions about the emergence of other low cost destinations, continued to be the leading destination for offshore outsourcing of software and IT enabled services, a position it is expected to maintain in the foreseeable future (Exhibit 5). The leading Wall Street firm, Goldman Sachs noted1:

Although much has been made about the potential offered by other low cost countries around the world in particular China, the Philippines and some Eastern European countries, it is our opinion that in terms of competency, availability of skilled resources, cost, and business environment, no other country is as competitive as India (emphasis in original).

Accompanying the remarkable performance in exports is the steady growth in demand for software services in the domestic market. Indian companies have started investing in IT

a Offshore employees as percentage of total employees: IBM (9%), Accenture (18%), EDS (15%), CSC (4%); India as percentage of offshore employees: IBM (33%), Accenture (55%), EDS (14%), CSC (61%) (Source: NASSCOM Strategic Review 2005)

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to improve their competitiveness. Many have implemented state-of-the-art Enterprise Resource Planning (ERP), Supply Chain Management (SCM) and Customer Relationship Management (CRM) software packages to improve productivity and performance. Some companies such as the telecommunications major Bharti Televentures, the consumer goods player Dabur India and the public sector bank, Bank of India, have gone one step further and outsourced their entire IT management. Interestingly, all three of them have opted to work with global majors – IBM, Accenture and Hewlett-Packard respectively. The phenomenal growth of the industry also unleashed a fresh war for talent (Exhibit 6). In the second quarter of FY 2006 alone, Infosys Technologies (Infosys) recruited over 8,026 people2, taking its total employee strength to 46,196. Competition for manpower, a key industry growth driver, is leading to higher than average annual attrition rates of 25-30% and salary inflation of 12-15%. The twin problems of salary inflation and attrition are particularly severe at the middle-management level. Competition is most intense for middle-level engagement managers who possess both business and technology expertise. Keen to sustain their respective growth momentums, individual firms are bidding up the compensation packages and contributing to the increasing industry attrition rate. According to one estimate3, a 5% attrition rate reduces the operating margins of a company by 1.5%. Firms are trying to cope with the surge in demand for software professionals by increasing their intake from college campuses. This however comes with the attendant challenges of training and assimilating the new staff quickly. The competition for talent is expected to intensify in future as most industry researchers and analysts predict sustained growth for the industry. In its annual strategic review, National Association of Software and Service Companies (NASSCOM), the nodal body of the Indian software industry, projected the value of services sourced from India to reach $48 billion by 2008. Such a projection may not be far-fetched. According to Forrester Research, less than 5% of Fortune 1000 companies, which it classified as “Full Exploiters”, have taken full advantage of offshore outsourcing. Other companies have used offshoring in varying degrees. While the “Committeds” (5-10% of Fortune 1000 companies) have graduated to outsourcing their mission-critical development and maintenance programs, the “Experimenters” (25-30% of the companies) are exploring offshoring on a trial basis through small projects. The remaining firms in Fortune 1000, the “Bystanders”, are yet to seriously investigate the potential of offshoring (Exhibit 7). In their survey of vice presidents and directors of IT and business unit decision makers in North American companies, Forrester Research found that beyond cost savings, the experienced offshore outsourcers benefited significantly from the process discipline of third party service providers. Interestingly, the respondents felt that while it was challenging to work with Indian offshore service providers because of their lack of high level business and industry process knowledge, they provided better value for money and quality of work than did large US services firms. Forrester Research reports4:

When we asked interviewees how their offshore suppliers rated, 88% say that they provide somewhat better or much better value for the money compared to their US-based counterparts. In addition 71% of the users stated that offshore providers delivered somewhat better or much better quality work.

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History

Contrary to popular perception, the Indian software industry came into being long before the much-publicised software services boom of the 1990s. TCS, the industry pioneer and the largest Indian software company in 2005, was set up way back in 1968! Infosys and Wipro, the other homegrown majors, were established in the early 1980s. However till the mid-1980s, the import substitution oriented (high tariff regimes being a case in point), largely domestic hardware industry centric policies of the Government of India and an overvalued Rupee restricted industry growth. Ironically though, the government’s other major policy initiative in this period - undertaking substantial investment in technical education - would later prove to be a big boon for the industry when global demand for software engineers exploded following changes in computing technology. The advent of personal computers and networking radically changed the computing paradigm. The shift from hitherto mainframe oriented computerisation to network oriented systems opened up a new source of demand in the advanced countries for customised software. A worldwide crash in hardware prices coupled with a relaxation in some of the previously restrictive government policies – for example, allowing hardware imports by software firms under a new Software Policy regime announced in 1986 – resulted in the Indian industry’s export revenues growing five fold from $22 million in 1984 to over $100 million by 1989. The export orientation of Indian software firms was in large part due to lack of opportunities in the domestic market. While private companies in most sectors had little incentive to computerise and improve productivity as they had historically been protected from foreign competition, the then widely prevalent “fear” that computerisation would lead to job losses discouraged government and state owned enterprises from undertaking large scale computerisation efforts. As a consequence, most software firms focused on providing software services to international clients. The dominant revenue generation model during this period was to second software engineers (sometimes pejoratively referred to as body-shopping) to overseas client organisations to work onsite in client projects. The fundamental value proposition of the industry was its ability to “deliver” a working team of professionals capable of undertaking any software engineering task. The projects were conceived, designed and managed by client organisations while Indian software professionals worked on specific “tasks” assigned to them. A few Indian firms (for example Sonata Software and Wipro) attempted to develop software products. But they failed in part due to the shallow domestic market, and in large part due to the unavailability of risk capital to sustain investments in product development and market the product in international markets. The policy changes that effectively de-linked the growth of the software industry from the hardware industry resulted in large-scale entry of firms into the industry. Apart from the entry of local companies (Satyam entered the industry in 1987), many multinational companies established operations in India during this period. While US multinationals such as Citicorp and Texas Instruments (TI) set up captive software subsidiaries that catered to their internal needs, the UK multinational British Telecom set up a joint

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venture with Mahindra and Mahindra, one of India’s established industrial houses. By the end of the decade, NASSCOM had over hundred member firms. Impact of Economic Liberalisation The liberalisation of the Indian economy in 1991 after a severe monetary and fiscal crisis provided a real fillip to the Indian software industry. The sustained depreciation of the Indian Rupee against the US Dollar (Exhibit 1), a ten-year tax holiday for the industry and the establishment of specialised software technology parksb that decreased the cost while dramatically improving the quality of telecommunication access made the Indian industry extremely competitive in global markets. Over the next five years, software exports quintupled as the global market continued to experience severe shortage of software engineers. Exports increased from $128 million in 1990-91 to over $700 million in 1995-96. Bulk of the work undertaken by the industry during this period was the so-called “low end project work” – legacy application development, migration and maintenance, providing support to technology products in the mature phase of their lifecycle etc. Typically, the tasks required knowledge of diverse software languages and protocols, which was not easily available in the West. Even if it was available, such expertise was rather expensive to acquire. While onsite projects continued to be the dominant engagement model, the 1990s also witnessed the emergence of offshoring of software “development”. The availability of skilled software programmers at a substantially lower cost and the liberalisation of policies on investments by multinationals made India an attractive destination for many global companies. The costs of executing a project in India in an offshore model were estimated to be one-third the costs of executing onsitec. But doubts about the ability of Indian professionals and firms to execute without direct supervision led most firms to adopt the onsite model. However, persons of Indian origind in senior management positions in firms such as Nortel and Motorola, aware of the high quality of engineering talent available in India, played a very influential role in persuading their companies to offshore the requirements. While Motorola opted to offshore by setting up a captive subsidiary, Nortel and General Electric (GE) preferred to outsource their requirements to Indian companies. These companies encouraged Indian firms to set up software factories that largely wrote routinised migration software. This format gained momentum and has since emerged as a major growth driver for the Indian software industry. Offshore Development Centres An Offshore Development Centre (ODC), as the software factories have come to be known, is a facility that a local Indian company sets up with dedicated personnel and resources to support a customer’s requirements. In return, the customer commits to buy a b In 2005, there were Software Technology Parks (STPs) in 39 locations across the country. Some of the STPs like the ones in Bangalore, Gurgaon (near Delhi), Hyderabad etc have grown to become ‘dynamic industry clusters’ with large-scale participation of both domestic and multinational firms.

c Cost of one man year of onsite work was $90,000 while cost in the offshore model was $30,000.

d They were typically alumni of elite Indian engineering schools. Their role has not been well-documented.

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minimum amount of services from the Indian service provider over an extended period of time. The relationship between the client and the service provider is governed by a master service agreement between the two parties5. The agreement provides for, among others, a billing rate that covers cost of time and other resourcese used by the service provider. The billing rate, often standardised on a person-hour basis, is used to charge the client for services provided to the client on all “projects” executed during the currency of the rate agreement, usually a year. Thus, for each project, negotiations between the two parties are restricted to the resources and the time required for that specific project. Typically, the routine and manpower intensive latter phases of the software development process such as low-level design, coding, testing and support were carried out in the ODCs. The early stages of the process such as conceptualisation, requirements analysis and high-level design were executed in the client’s premises by its team along with personnel deputed onsite by the service provider. The unbundling of the development process required strong coordination between the onsite and the offshore teams along with tight integration of the software development effort. While the service provider’s personnel in the onsite team facilitated coordination, definition of and strict adherence to the development processes became the key lever to achieve integration. Initially, most firms aligned their process to the standards specified under the International Standards Organisation (ISO) 9000 framework. Later, the Indian software industry embraced the Capability Maturity Model (Exhibit 8) proposed by the Software Engineering Institute of Carnegie Mellon University in the United States. Over time this model (popularly known as the SEI-CMM) evolved as the international standard for software service organisations because of its greater rigor and utility. By the end of the nineties, five of the first ten software companies to be awarded CMM Level 5 certification in the world were based in India and in 2005, the largest number of CMM Level 5 certified software companies were located in India (Exhibit 9). Over the years, most large Indian service providers such as Wipro, Infosys and TCS set up multiple ODCs within their organisations. Likewise, multinational companies such as GE, Nortel etc established ODCs in several Indian software services organisations. As a consequence, the share of offshore revenues in total industry revenues increased steadily (Exhibit 1). The offshore component would have perhaps grown even more rapidly but for the big and predominantly onshore oriented Y2K (Millennium) bug opportunity that came the industry’s way in the mid-1990s.

The Take Off

The Indian software industry got its first big growth opportunity with the realisation of the ‘Year 2000’ (Y2K) problem in software applications deployed across the world. Put simply, the problem was brought about by the absence of the two-digit century value in the date field in computer systems and applications. To fix the problem, programmers e In many cases the client also funds investment in specialised infrastructure. For example, Nortel provides its service providers with its own proprietary telecom hardware that are used, among other things, for “testing” the software developed for it.

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had to change the way the system referred to dates, examine each line of code and correct every reference to the dates. A typical Y2K project had nine phases (Exhibit 10). While technically not very demanding, the solution required a large number of skilled personnel and strong project management capability. Companies especially in the banking and insurance sectors spent billions of dollars worldwide to fix the problem. Such huge spends enabled many Indian firms to scale up their operations. In 1997-98 alone, an estimated 30% of the Indian software programmers were working on Y2K related projects.6 Overall, the Indian software industry earned an estimated $2.5 billion from the Y2K opportunity.7 More importantly, the Y2K opportunity enabled the Indian software industry to demonstrate, initially its problem solving capability, and later its project management capability. At first, clients managed the Y2K projects and Indian firms just provided the requisite personnel. Subsequently, towards the end of the millennium, many clients, perhaps in recognition of the latter’s growing maturityf, handed over the management of the entire project to Indian companies. Such contracts, coupled with the process management skills acquired during execution of projects in the ODCs, enabled Indian companies develop generic project management skills and thereby sustain growth even after Y2K remediation and other one-time big windows of opportunity like euro conversiong ended. The NASSCOM-McKinsey Study NASSCOM, the trade body and chamber of commerce of software and services industry in India, played a significant role in the growth of the industry. In addition to playing the traditional role of advocacy - lobbying to influence government policies - it furthered the cause of the industry in many novel ways. These included establishing the brand equity of India as a premier global sourcing destination by organising seminars in various countries; representing the industry in inter-national events such as CeBIT, Comdex etc.; enabling transfer of best practices among various members by creating multiple platforms for active exchange of information and practicesh; accessing world-class research and market intelligence services; benchmarking global competition by seeking advice from leading analysts and consultants; and jointly undertaking research studies with best in class companies in various areas of business, technology and strategy research.

f The clients however sought to protect themselves by including a penalty clause in the contract for lapses in delivery time and quality.

g On 1st January 2002, the Euro became the official currency of Europe, and it was mandatory for companies based in the countries of the European Union to record all their transactions in the Euro in addition to whatever other currency they used. Thus, software applications had to be converted to become Euro-compliant. The core logic of applications had to be changed to incorporate both two-currency accounting and inter-currency transactions. (“Year 2000, The Day After”, Business Today, 22nd Sep. 1998) h For example it had forums for exchange that included a Quality Forum, a Products Forum, an MNC Forum, a SME Forum, a Cyber Security and Compliance Forum and International Policy Forum

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Noteworthy among NASSCOM’s several activities was the study it instituted with international strategy consulting firm McKinsey and Company in 1998. The study, even as it highlighted India’s emergence as a major destination for software services (Exhibit 11), warned the industry about the impending dramatic shift in demand away from old generation legacy/client services – the Indian industry’s dominant source of revenue at that point in time - towards new generation services centred around the Internet (Exhibit 12). The study argued that the Internet would radically transform enterprise IT architecture and redefine the way business is conducted. It found the emphasis within IT departments of companies in the advanced countries shifting to the “edge” of the enterprise to facilitate superior interaction between businesses, suppliers and customers. Consequently, the study expected IT spend among potential customers of the Indian software industry moving away from “back-office” applications towards e-commerce and front-office applications such as logistics, supply chain, sales and customer management. Following this view, it identified, among others, web-enabling legacy systems and development of e-commerce applications, as opportunity areas for the Indian software industry. It also concluded that to exploit emerging opportunities in the web-applications and e-commerce domains, Indian firms would have to modify their then prevailing offshore model (Exhibit 13). The study projected export revenues of $50 billion by 2008 provided the industry redefined its value proposition. It argued that the industry’s basic value proposition of being a “skill surplus” country had served it well until then. However, it believed, future growth lay in transforming into a “hub” for software development rather than remaining a country to source people from. To emerge as a hub, the industry had to grow its offshore operations. However, it said, many companies with little or no experience in offshore outsourcing doubted the Indian industry’s capability to meet those requirements on a sustained basis. It cautioned Indian firms to tread carefully, lest they end up damaging their reputation by attempting to offshore unsuitable projects. Focus on Quality Recognising the changing nature of demands that new opportunities imposed on them - the “evolutionary” nature of projects and the attendant potential for “scope creep”i - Indian firms intensified their commitment to software process discipline. They were aware that frequent changes in scope, if not managed well, could add cost to the development cycle and make the offshore initiative less valuable overall. They realised that using standard processes and methodologies such as Project Tracking and Oversight Charts (PTO) and Quality Charts8 (Exhibit 14) would be the best way to mitigate the corresponding risks. They further supplemented process control mechanisms with weekly and monthly review meetings in which they evaluated the performance of every project on a number of metrics that included: errors per line of code, in process defects, rework costs before and after user acceptance testing (UAT), first pass user acceptance, cost overruns etc. i “Scope Creep” is the industry terminology for frequent changes in scope. Often, customers made changes to their initial specifications even when projects had progressed to the design and implementation stages.

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To specifically manage requests for change in specifications after commencement of projects, they set up ‘Change Control Boards’9. These Boards documented the requests for change, evaluated the impact of all change requests on schedules and effort and most importantly communicated this impact to customers. The last step was critical for smooth execution because, in addition to the stereotypical challenges imposed by language and cultural differences between the client’s team and the Indian company’s team, client organisations often operated at much lower levels of process maturity than did the Indian service providers. Giga Information Group commented10:

For offshore vendors in India, quality is a key differentiator. Few vendors or user companies in the United States or Europe can compete with Indian firms in the quality category.

Further, an offshore relationship is not an easy one to manage. It requires constant attention11. Enterprises typically underestimated the management effort required to successfully execute an outsourcing contract. This situation arose in part because of a lack of understanding of the boundaries of the relationship between the client and service provider. The absence of clear definition and demarcation of responsibilities between the two parties coupled with the urge to reduce total cost by cutting overheads allocated to the projects resulted in the initiative being “under-managed”. To ensure that the projects were not under-managed, leading firms such as Wipro, TCS and Infosys went beyond the SEI-CMM Level 5 certification and extended quality standardization to a host of other organisational processes. They embraced the newer, multifaceted CMM assessments such as People-CMM (P-CMM) and CMM-Integrated (CMMI) into their delivery processes. They also sought to achieve continuous improvement in their operations by integrating Six Sigma methodologies into their management processes (Exhibit 15). Often, leading Indian firms applied their process management expertise to further re-engineer client work and deliver savings much higher than originally contracted. Wipro, for example, according to Forester Research, achieved an additional 10% to 15% increase in application maintenance productivity by applying its quality methodology and by consolidating redundant program applications12. Impressed by the sustained improvements in their delivery capabilities and the continuous reductions in cost of services achieved by Indian firms, Forrester Research commented13:

Software development is a science in India, not an art. The top-tier Indian vendors collect metrics and use them effectively to improve. They are constantly measuring themselves against themselves.

Listing in US Capital Markets In March 1999, Infosys became the first Indian company to be listed on NASDAQ. Infosys started preparing for the listing a few years in advance when it started declaring its results under both the Indian GAAP and the more stringent US GAAP principles. Within the next couple of years, some more Indian software firms listed their stock either

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on the NASDAQ or the NYSE. The adoption of international standards of information disclosure by software firms distinguished the software services industry from other industries in India. While the ostensible reason for the listing was to raise capitalj to fund acquisitions, these firms also sought to leverage the listing to build reputation capital. Nandan Nilekani, currently the CEO of Infosys Technologies said14:

We wanted to be recognised as a global company, and it was imperative that we get listed on the largest and deepest capital markets in the world.

International listing ensured that the listed firms came within the radar of international technology analysts such as IDC, Forrester Research and Gartner and of equity analysts at Wall Street. The analysts started tracking the performance of not only the listed companies but also the entire industry, resulting in high visibility and credibility for the Indian software industry and providing it with a cachet of being global and world class. Listing in US capital markets had yet another beneficial impact. The listed firms could now attract international talent by offering attractive stock options to potential candidates. These companies had successfully employed stock options to attract and retain talent in India. Like other high growth industries, the Indian software industry had to grapple with the problem of high attrition. The growth of captive subsidiaries of companies such as Microsoft, Oracle, HP, Philips etc. and entry of global service providers such as IBM, Accenture etc. provided software professionals with opportunities to move across organisations in the industry. Many highly skilled professionals were also attracted towards working directly for client organisations overseas leading to flight of talent from Indian firms. Employee costs skyrocketed and attrition rates soared. To combat these phenomena, leading Indian firms such as Infosys, Wipro etc started offering employees stock options with vesting spread over several years. The rapid appreciation of equity prices of these companies made many of their employees millionaires – yet another phenomenon hitherto unheard of in Indian industry. The Slowdown After a decade of uninterrupted growth, the Indian software industry experienced a slowdown in growth rate in 2001 for the first time in its short history. A global recession led by a downturn in the US economy; the “reluctance” among firms to aggressively pursue offshoring after the September 11 terrorist attacks; and the dot-com implosion together impacted the growth and profitability of the industry. Billing rates came under severe pressure, in part due to heightened rivalry among service providers and in larger part due to the sameness of the value proposition of rival firms. The industry attempted to sustain its growth by widening its geographic footprint. However the opportunities for growth available in Europe and Japan, the two geographies that the industry focused on, were not sufficient to offset the decline in growth rates in the US market, its traditional j Infosys raised $70.38 million by issuing 2.07 million American Depository Shares (ADS). Each ADS was equal to half a local share. (Source: Infosys Annual Report 1998-99)

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stronghold. The smaller firms were particularly hit hard as size and reputation became default decision drivers among clients. Fortunately, the slow down did not last very long. By 2003, growth rates bounced back. However, the market context had changed. First, the industry did not have large one-time windows of opportunity such as Y2K. Second, competition had become more intense both because of the strategic sameness of Indian firms and the entry of global majors such as IBM and Accenture through their back-end units in India. Third, customers changed the way they bought IT services. They centralised purchases, rationalised the vendor base and realising that their spending in the past had not been very productive, and perhaps even excessive, they focused on return on IT investments. Clients no longer undertook projects to “keep up with their competitors” or because a new technology had become available. However the changed context also threw up new growth opportunities for the Indian industry. For example, even though the pure play e-business firms had failed, the vision of e-commerce had not. The so-called “brick and mortar” companies expanded their vision into areas such as CRM and SCM, thereby opening up new avenues of growth for service providers. Additionally, cost pressures and regulatory discontinuities in the West led to opportunities in healthcare and retail verticals. The Indian industry seized these opportunities and grew. While traditional service offerings in custom software development and application maintenance continued to be the core area of focus, firms expanded the breadth of offerings to include package implementation and support, R&D services, data and application integration, IT consulting etc. The Indian software services majors such as Infosys, TCS and Wipro, also started investing heavily in sales and marketing and brand building (Exhibit 16). They set up new offices or strengthened existing offices, organised customer meets and participated in or sponsored technology seminars. However, even as they embarked on these efforts, it was clear that they had to fundamentally reinvent themselves to stave off the growing competitive pressure from global service majors. The Global Delivery Model Traditionally, the Indian services majors had distinguished themselves on their ability to deliver services from an offshore locationk. In sharp contrast, the global majors had differentiated themselves on the basis of their “domain expertise” and their ability to serve clients locally i.e. wherever the client happened to be. However, shifting industry economics was forcing the global companies to ramp up their low cost remote delivery capabilities. Thus it became clear to the Indian services majors that to retain their competitiveness, they had to evolve their model from a simple “one-hop offshoring” one (for example from US to India) to a more sophisticated and globally distributed delivery

k According to Forrester Research, the superior capabilities of the Indian majors were visible to the clients. It cites the example of a client whose time and budget variance dropped from 20% to less than 1% when the application work was shifted to Infosys from IBM.

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model. They did so by unbundling the service delivery process into different components and by delivering them from multiple locations. For example, in a package implementation project, they did process mapping and solution definition onsite at client location; performed the tasks of prototype building, high level design and implementation support either at an “onshore”l or a “near shore”m location; and executed the balance tasks such as development of custom components and integration interfaces at a low cost offshore location (Exhibit 17). As compared to the global majors, Indian companies executed a greater fraction of the software development process offshore (Exhibit 18). While India continued to be their largest offshore operation, many Indian companies set up facilities in other low cost countries. For example, today TCS has operations in Hungary and Uruguay and Infosys has operations in China. In addition to morphing their delivery model, leading Indian players began to bolster their domain expertise with a view to deepen their engagement with clients. They set up practice focused competence centres to develop expertise in select industry verticals. Like their US based competitors, most large Indian firms reorganised themselves and began to go to market by verticals. Some like Infosys went one step beyond and set up a separate consulting unit called Infosys Consulting. Staffed with people recruited from leading global consulting firms, the mandate to the unit was to enable Infosys achieve a significant presence in the IT consulting market that was undergoing a paradigm shift. The traditional three stage “sequential” approach was giving way to a more integrative model of consulting (Exhibit 19). Looking for “tangible cost benefits” from consulting led initiatives, clients expected the consulting units to deliver solutions end-to-end. To enhance their end-to-end service delivery capability, the Indian majors ventured into the rapidly growing BPO space. Until the entry of large Indian companies, much of the work undertaken by the Indian BPO industry was voice-based work in the area of CRM (inbound/outbound call centres). Sensing an opportunity to leverage their skills in managing offshore projects and to grow off-shoring of core business processes such as payroll, policy administration, accounts and reconciliation etc., the Indian majors entered the BPO industry hitherto dominated by captive centres of multinationals such as GE. Their entry strategies varied. While Infosys set up a green-field venture, TCS opted for a joint venture and Wipro acquired Spectramind, the then third largest Indian BPO company.

The Emerging Landscape In 2005, the Indian software industry comprised both home-grown companies and subsidiaries of multinationals. Among the Indian companies, the leading domestic firms (top 5) commanded over 40% of the industry’s export revenues. The tier two domestic firms, nearly 100 of them, together had a 16% share of export revenues. While a majority of the second tier firms were essentially smaller scale versions of the broad based tier-one l An onshore facility (in a client’s country) was different from an onsite (in a client’s office) location.

m A near shore location was typically located close to a client’s country in a neighbouring country. For example, Canada was a near shore location for US based clients.

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service providersn, a few specialised in select industry verticals such as financial services (i-flex Solutions) and telecommunications (Sasken Communication Technologies). The bottom of the pyramid comprising more than 3000 small companies, accounted for the rest of the industry’s export turnover (Exhibits 20 and 21). The subsidiaries of multinationals companies included both captive development centres of companies such as Microsoft, Intel, Motorola, TI, Adobe, HSBC etc., and offshore facilities of global service majors such as IBM, Accenture etc. The former accounted for a significant 31% share of the industry exports15. However their share was expected to stabilise, if not decline, at current levels due to the new trend of sale of captive centres by the parent companies. For example, the Swedish telecommunications equipment company Ericsson sold its captive R&D Centre to Wiproo. CLSA reported16:

We see mature captive units going through a process of questioning their cost model, which is almost universally higher than Indian vendors (by up to 20%). At the same time, higher confidence in offshore, increased skill sets of Indian vendors and the desire of some clients to realise investment gains from their efforts would drive the trend towards captive hive offs.

Competition between Indian and global majors was expected to intensify with the entry of Indian majors into the infrastructure management space and other value added services like helping client organisations to effectively outsource - the traditional forte of global service providers. The jury is out on which set of majors would emerge as the leaders in future. In a detailed study using 60 different criteria, Forrester Research compared the onshore majors (IBM, Accenture and EDS) with the offshore majors (TCS, Infosys and Wipro). Commenting on their evolution towards a more distributed, process-centric, low cost global delivery model, Forrester concluded17:

While all six vendors are making significant investments in skills, processes, tools, locations, and infrastructure, none is fully entrenched in the leader category. The offshore players need to add more domain expertise and improve account management to better interface with the business buyer. The onshore players need to fully embrace CMMI and encourage their account teams to more consistently utilise its low-cost GDM capabilities.

CLSA compared the performances of the global big three pure play services companies (Accenture, EDS and CSC) with that of the big three Indian companies (TCS, Infosys and Wipro) and found something startling. While the global vendors were much larger than the Indian vendors in revenue terms but their profits were not! (Exhibit 22) CLSA observed18:

n Companies such as Patni Computer Systems, iGate Global Solutions, Mphasis BFL, MindTree Consulting are illustrative examples.

o Other examples are Lucent’s divestiture of it captive centre to Hughes Software (now Flextronics) and GE’s sale of its captive BPO facility to private equity investors, Oakhill and General Atlantic Partners.

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Compared individually, EDS and CSC are already lagging in profit terms. While behemoths such as IBM Global Services would stay much ahead in the foreseeable future, the pure-play global vendors such as Accenture, EDS and CSC will be increasingly hard-pressed to manage their operations profitably in a changing pattern of services spending.

The change CLSA was referring to was in the nature of deal structures in large outsourcing contracts, typically multi-$100 million plus contracts. Until now customers outsourced their entire IT management to a single vendor in a mass “re-badging” type of deal. Increasingly, however, along with cost, customers were looking for best-of-breed solutions and were willing to engage with multiple vendors to get the best results. This trend of unbundling of deal structures worked in favour of Indian majors as they could now bid for parts of large outsourcing contracts that they could not previously participate in. In September 2005, TCS and Infosys carved out nearly a fifth of the Dutch bank ABN Amro’s $2.34 billion technology services contract between them. While IBM got the lion’s share of the deal ($1.8 billion), the two Indian companies beat all other global majors including Accenture to win the $400 million (TCS: $260 million and Infosys: $140 million) application development, maintenance and support modules of the deal. The ABN Amro contract was the largest till date for both companies. N. Chandrasekaran, Executive Vice President of TCS’ global operations said19:

The rules of the game have changed. Now everybody is invited to the (high) table.

Invitations notwithstanding, it was not clear whether Indian firms had the winning edge in the emerging battle. They were disadvantaged on two counts. First, they did not, as yet, have matching domain expertise. Second, their relationships were largely confined to Chief Information/Technology Officers of client organisations. They did not have strong business relationships with other members in the top management of global companies. Kris Wadia, associate partner, Accenture said20:

The quality of relationships we enjoy with CEOs, CIOs and CFOs gives us a huge advantage. We may run across Indian firms where the client is looking to do some stuff around the low-end, commoditised area. But by and large, because of the quality of our relationships and the scale and range of our work, we don't see them with the kind of frequency that everybody assumes.

But, Nandan Nilekani, CEO of Infosys, remained unfazed. He said21:

The MNCs have the business relationships, but their delivery has to be completely redesigned. That is a much bigger challenge because there you have to completely displace your people. When you move work from there to here, revenues go down. The whole process is very traumatic for them. For us it (building the front-end) is progress.

14


Exhibit 1 Indian Software Industry Revenue Trend

Indian Software Industry Size

0.0

5.0

10.0

15.0

20.0

25.0

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06E

Time

USD

Bill

ion

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Revenue Share in GDP

USD Billion FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 E

IT Exports 0.49 0.74 1.11 1.76 2.59 3.40 5.30 6.20 7.10 9.20 12.00 15.20

IT Domestic 0.22 0.31 0.48 0.67 0.85 1.90 2.50 2.50 2.80 3.60 4.30 5.30

IT Total 0.71 1.05 1.59 2.43 3.44 5.30 7.80 8.70 9.90 12.80 16.30 20.50

GDP Share* 1.2% 1.5% 1.9% 2.7% 2.9% 3.2% 3.5% 4.1%

INR/USD 31.5 34.3 35.1 37.1 42.1 43.3 45.6 48.0 48.3 45.5 45.3

Source: (1) NASSCOM Strategic Review 2005 (2) Ghemawat 2002 (3) NASSCOM Newsline June 2005 Calculations for the period 1990-91 to 1998-99 done on basis of data available in (2) Figures for 2004-05 and 2005-06E include authors’ estimate for domestic ITES-BPO, which has been excluded from total domestic market * Share in GDP represented above is of Total (Exports + Domestic) IT+ ITES Market

Offshore-Onsite Export Mix

Year FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY 01 FY 02 FY 03 FY 04 FY 05E

Offshore 38% 39% 40% 41% 41% 42% 43% 44% 55% 57% 64% 71%

Onsite 62% 61% 60% 59% 59% 58% 57% 56% 45% 43% 36% 29%

Figures include ITES-BPO export revenues – earned for services that are predominantly delivered offshore. If ITES-BPO export revenues are excluded, offshore proportion increased from 33% (2000) to 50% (2004) Source: NASSCOM Strategic Review 2005

15


Exhibit 2 Exports* by Service Offering

IT Exports by Service Line (USD Billion) FY01 FY02 FY03 FY04 Project Oriented Services 2.7 2.85 3.23 3.85 IT Consulting 0.05 0.05 0.08 0.12 System Integration 0.15 0.15 0.1 0.14 Custom ADM 2.50 2.65 3.02 3.54 Network consulting and integration 0 0 0.03 0.05 IT Outsourcing 1.75 1.80 1.94 2.45 IS Outsourcing 0 0 0.01 0.02 Application Outsourcing 1.7 1.75 1.85 2.16 Network Infrastructure Management 0.05 0.05 0.08 0.27 Support and Training 0.30 0.30 0.37 0.61 IT Training and Education 0 0 0 0.02 Hardware Support and Installation 0 0 0.02 0.04 Packaged Software support and Installation 0.30 0.30 0.35 0.55 TOTAL 4.75 4.95 5.54 6.91

Exhibit 3

Exports* by Geography

IT + ITES Exports by Region FY03 FY04 USD Billion Value Percentage Value Percentage Africa 0.07 0.8% 0.08 0.6% USA 6.46 67.7% 8.72 68.2% Rest of Americas 0.13 1.3% 0.16 1.2% Asia, Oceania and Middle East 0.76 7.9% 0.94 7.4% Europe 2.12 22.2% 2.89 22.6% TOTAL 9.54 12.80

Exhibit 4

Exports* by Verticals

IT+ITES Exports by Vertical (USD Billion) FY02 FY03 FY04 BFSI (Banking, Financial Services & Insurance) 2.70 3.74 4.74 Telecom (Services + Equipment) 1.16 1.25 1.66 Manufacturing 0.92 1.15 1.66 Healthcare 0.23 0.48 0.78 Retail 0.31 0.48 0.79 Others 2.39 2.50 3.16 TOTAL 7.70 9.60 12.80

* Figures for IT + ITES provided as robust data for IT Exports by verticals and by geography not available * Source: NASSCOM Strategic Reviews 2003, 2004, 2005

16


Exhibit 5 Value of Offshore (IT and ITES-BPO) Sourcing of Services for 2004 and 2008

CY04 CY08E USD Billion

Value Percentage Value Percentage India 17.2 43% 48.0 51% Canada 12.6 32% 20.9 22% China 1.9 5% 5.0 5% East Europe 1.8 5% 6.4 7% Philippines 0.9 2% 2.6 3% Mexico 0.5 1% 1.1 1% Others 4.7 12% 10.0 11% Total 39.6 94.0

Source: NASSCOM Strategic Review 2005

Exhibit 6

Manpower Growth

MNC Captives FY02 FY03 FY04 FY05E FY06E Adobe 50 200 300 500 800 Intel 96 1,112 1,814 2,902 3,918 Microsoft 215 450 617 926 1,388 Motorola 800 1,200 1,500 1,800 2,100 Nortel 592 769 1,000 1,250 1,563 Oracle 2,000 2,700 6,000 7,500 9,000 Philips 671 748 937 1,175 1,470 SAP 300 500 1,300 2,600 4,000 Texas Instruments 650 700 950 1,300 1,750 Other Captives 14,840 22,060 38,275 55,049 70,153 Financial Service Captives 5,200 10,300 17,850 23,220 30,750 TOTAL CAPTIVES 20,040 32,360 56,125 78,269 100,903

Global Majors FY02 FY03 FY04 FY05 FY06E Accenture 700 1,200 5,800 12,500 18,500 Cognizant 3,836 6,484 10,490 16,500 23,100 CSC 400 750 1,000 3,100 5,000 EDS 700 1,100 1,500 3,000 5,500 HP Services 2,969 4,140 5,550 8,840 10,840 IBM (incl PwC) 4,698 5,498 9,000 20,000 35,000 Total Global Majors 20,266 30,372 52,433 93,814 141,403

Indian Majors FY02 FY03 FY04 FY05 FY06E TCS 18,000 24,383 31,472 43,268 55,768 Infosys 10,738 15,356 23,377 33,807 44,807 Wipro 9,626 13,474 19,202 26,702 35,702 Satyam 8,634 9,759 14,032 19,032 26,032 HCL Technologies 6,500 7,917 11,586 16,260 21,138 Total Indian Companies 141,642 167,506 186,728 246,061 307,291

Source: “Indian IT Services: Sector Outlook”, CLSA Asia-Pacific Markets Report, February 2005

17


Exhibit 7 Characteristics of Offshore Customer Segment

Customer or Prospect Characteristics

Bystanders Experimenters Committeds Full Exploiters

Focus of efforts None to initial investment of offshore’s potential

Small 10-20 person projects for conversion of older apps or isolated new development

30-50 person mission critical development and maintenance programs

Large scale apps development and management, remote monitoring and administration, implementation and upgrades of packaged apps, and BPO

Level of program management skills None

Uncoordinated project-by-project management

Centralised and dedicated program management

Global sourcing is a core competence with documented best practices

Percentage of IT services budget going offshore

0% 1% to 5% 10% to 30% 40% to 50%

Size of segment 50% to 60% of Fortune 1000 companies

25% to 30% of Fortune 1000 companies

5% to 10% of Fortune 1000 companies

Less than 5% of Fortune 1000 companies

Source: Offshore Outsourcing: The Complete Guide, Forrester Research, September 2004

18


Exhibit 8 Description of Capability Maturity Model

The roots of research in software maturity assessment can be traced back to the mid-1980s when the Software Engineering Institute (SEI) at the Carnegie Mellon University, in collaboration with the MITRE Corporation, began developing a framework for assessing the maturity of software processes within organisations. From a first description in 1987, the framework has evolved over the years into the widely accepted Capability Maturity Model (CMM) for software maturity assessment. CMM has five maturity levels – Initial, Repeatable, Defined, Managed and Optimised. At Level 1, an organisation’s software processes are ad hoc and occasionally even chaotic. At Level 5, continuous improvement procedures enabled by the appropriate use of metrics are institutionalised. The following table provides a summary of the key process areas considered within the CMM.

Maturity Level Key Process Areas

Level 5 • Defect Prevention • Technology Change Management • Process Change Management

Level 4 • Quantitative Process Management • Software Quality Management

Level 3

• Organisation Process Focus • Organisation Process Definition • Training Program • Integrated Software Management • Software Product Engineering • Inter-Group Coordination • Peer Reviews

Level 2

• Requirements Management • Software Project Planning • Software Project Tracking and Oversight • Software Subcontract Management • Software Quality Assurance • Software Configuration Management

Level 1 • None Source: Motorola India Electronics Private Limited, IIMB Case, Ramachandran and Dikshit, 2002

19


Exhibit 9 CMM Level 5 Certified Companies in India

CMM Level 5 Certified Indian Companies

5

20

50

60

7076

0

20

40

60

80

Jun-99

Oct-99

Feb-00

Jun-00Oct-

00Feb

-01

Jun-01

Oct-01

Feb-02

Jun-02

Oct-02

Feb-03

Jun-03

Oct-03

Feb-04

Jun-04Oct-

04

Num

ber

of C

ompa

nies

Source: NASSCOM Strategic Reviews 2001, 2003, 2005

Exhibit 10 Sample Y2K Project Time Line

4% 20% 20% 25% 15% Project Examination, Analysis

and Solution Design Systems Test

Modification Unit TestScoping

1% 5% Integration/User Acceptance Test

Inventory

1%

Source: “The Year 2000 Crisis: An Enormous Challenge That Must Be Addressed”, Gartner, March 1997

Awareness

Project Management (Adds 25% to Total Project Cost)

9% Implementation Disaster Recovery Documentation

20


Exhibit 11 India Inc.’s Value Proposition in IT Software and Services

Source: Indian IT Strategies, NASSCOM-McKinsey Study 1999

High

Low

Low High

France Ireland

Singapore

Philippines

USA

UK

India

GermanyChina

Indonesia

Vendor Sophistication• Number • Quality

People Sophistication • Number • Cost • Skills

Exhibit 12 Shift in Demand towards New Generation Services

* Does not include total IT services spending, but only the fraction targeted by Indian compaSource: Indian IT Strategies, NASSCOM-McKinsey Study 1999

46

46

10

75

15

7

81

13 •••••

s

• Legacy/Client Server Services

• Web/Package based-services

• Training & Education

1997 2004 2008

8

100% = $163*

$562*

Figures in USD Billion and %

$353*

•

••

•

21

Component

nies

Y2K Euro Maintenance Migration Development

Internet Application Integration

ERP/EAS Package/

Component Implementation

Package Application Maintenance


Exhibit 13 Modifying the Offshore Model for New Generation Services

• Greater cross-enterprise involvement

• Higher demands on speed and responsiveness

• Rapid iteration between implementation (build) and operations (run)

• More (initial) concerns about offshore bases

Source: Indian IT Strategies, NASSCOM-McKinsey Study 1999

Exhibit 14

PTO Charts

• Very detailed specifications

• Long lead times with limited customer interaction

• High manpower requirements

New web-/ package-based services

Legacy / client server systems

$

Traditional Offshore Model

Modified Offshore Model

Project: XXProj Mgr: ABCSSE: XX SSTE: YY

Project Start date: 31-Aug-98Date of SPMP baseline: 31-Aug-98No. of replans: 4Date of Last revision:Date of last replan: 16-Dec-98

Milestones Original Forecast ActualProduct Requirements Spec 30-Jul-98 23-Sep-98 12-Oct-98Product Functional Spec 7-Aug-98 15-Oct-98 29-Oct-98Design 25-Sep-98 16-Dec-98 22-Dec-98Coding 30-Nov-98 27-Jan-99 2-Feb-99Integration Testing 4-Jan-99 18-Mar-99 17-Mar-99System Testing (Development) 15-Feb-99 30-Mar-99 25-Mar-99Alpha Release 31-Mar-99 31-Mar-99Patch Release 25-Feb-99 8-Apr-99 5-Apr-99[Field Trial] 28-Apr-99

Project Key FactorsTOP 3 RISKS: Probability Impact

Req. & Effort Volatility

0.00

0.50

1.00

1.50

8/98

9/98

10/98

11/98

12/98 1/9

92/9

93/9

9

Req. Vol.Effort Vol.

Staffing

00.5

11.5

22.5

33.5

8/98

9/98

10/98

11/98

12/98 1/9

92/9

93/9

9

PlannedActualAttrition

CumulativeMilestones

0

10

20

30

40

8/98

9/98

10/98

11/98

12/98 1/9

92/9

93/9

9

PlannedActual

Schedule Variance

-4

-2

0

2

8/98

9/98

10/98

11/98

12/98 1/9

92/9

93/9

9

Bull's EyeVariance

Wee

ks

CTR Factor

00.5

11.5

2

Goal Orig Fcst.

Replan

Source: Motorola India Electronics Private Limited, IIMB Case, Ramachandran and Dikshit, 2002

22


Exhibit 15 Executing with Quality at Wipro Technologies

Source: Website of Wipro Technologies

Exhibit 16 Marketing Spends of Major Indian Companies

FY00 FY01 FY02 FY03 FY04 FY05 Infosys 4.7% 5.0% 5.0% 7.4% 7.0% 5.7% Satyam 4.3% 1.8% 1.7% 1.7% 1.9% 1.5% Wipro NA NA NA 6.0% 8.3% 5.9%

Figures for: Infosys - as fraction of its total revenues; Satyam - as fraction of its software revenues; Wipro - as fraction of its Global IT & Products and India-Asia Pac IT & Products Divisions Source: Official Websites of Infosys, Wipro and Satyam

People CMM • Better Performance

PEOPLE • Strong sense of process ownership • Retention

• Development • Highly motivated workforce • Productivity • Collaboration

Integrated CMM • Repeatable, measurable and

predictable software processes

• Increased use of metrics

People

Six Sigma • Reduced Defects • Increased productivity • Cycle time reduction

OPERATIONS • Integration • Low Total Cost of

Ownership • Scalability • Flexibility

Continuous Improvement

Process

STRATEGY • Cost Reduction • Technology

Innovation • Time to Market Leader • Quality Leader

Quality systems and processes address the three core processes required for execution excellence and enable measurement of results

23


Exhibit 17 Global Delivery Model of Infosys Technologies

Strategy and

Roadmap Definition

Development and Integration

SI and package implementation

IT Outsourcing, BPO and AMO

Onsite

Client Interaction, interviews, reviews, program leadership, goal setting

Architecture requirements, change management and implementation

Client interaction, process mapping, solution definition, architecture, change and program management

First level support, facilities support, program management

Near-Site Analysis and synthesis

Requirement analysis, high level design, prototype building, implementation support

Prototype building, high level design, implementation support

Near site support centres, service redundancy

Offshore

Background research, thought leadership and information support

Detailed design, code development, testing and integration

Custom components, integration interfaces, reports building

Large offshore centres, core service delivery

SI: System Integration; AMO: Application Maintenance Outsourcing Source: Infosys Technologies Limited

Exhibit 18

Process Differential between Indian and Global Majors

Architecture and Consulting Team

Indian Vendors

Global VendorsA Typical Outsourcing Workflow Start of Project End of Project

Functional Design Business Testing Onsite

Architecture Design Full Assembly Testing

Technical Design Testing for Components

Application Development Offshore

Development and Technical Team

Source: “Indian IT Services: Sector outlook”, CLSA Asia-Pacific Markets Report, February 2005

24


Exhibit 19 Traditional Consulting Approach and the New Paradigm

Consulting

Source: “Indian IT Services: Sector Outlook”, CLSA Asia-Pacific Markets Report, February 2005

Exhibit 20 Evolving Structure of Indian IT and ITES-BPO Exports Industry

Number of Companies Annual Turnover

(INR) FY01 FY02 FY03 FY04 Above 10 billion Tier 1 5 5 7 9 5-10 billion 7 5 5 8 2.5-5 billion 14 15 15 24 1-2.5 billion

Tier 2 18 27 41 53

500 million – 1 billion 25 55 71 56 100-500 million 193 220 244 367 Below 100 million

Tier 3 544 2483 2644 2653

Total 806 2810 3027 3170 Note: MNC captives account for about 31% of the industry turnover (exports for India) Source: NASSCOM Strategic Review 2005

Implementation

Operations

Hand-off to implementation team / separate vendor

Hand-off to internal operations or separate vendor

Strategy Process Design

Consulting Architecture

Integrated Teams Full responsibility, end to end

Design Use of global delivery bases Develop Deploy

Implementation Operations

Maintain Enhance Upgrade

Traditional Model New Paradigm

25


Exhibit 21 IT Software and Service Exports (excluding ITES-BPO)

In USD Million FY05 FY04 FY03 FY02 TCS 1644 1199 941 813 Infosys 1502 1026 734 535 Wipro 1198 854 577 481 Satyam 745 539 415 357 HCL Technologies 588 413 317 277 IBM Global Services 412 NA NA 160 Patni Computers 342 266 189 153 i-flex Solutions 245 168 123 82 Mahindra BT 201 159 131 113 Polaris Software 154 126 76 52 Perot Systems TSI 145 119 93 94 Hexaware 129 82 53 50 Larsen and Toubro 123 77 48 51 Mastek 121 83 78 54 iGate Solutions 118 106 87 84 Siemens 111 NA NA NA Mphasis BFL 103 86 70 66 Tata Infotech 102 75 53 NA NIIT 99 117 88 84 Flextronics 94 70 44 NA

Source: (1) NASSCOM Strategic Reviews 2003, 2004 and 2005 (2) NASSCOM Newsline June 2005

Exhibit 22

Profit Convergence of Indian and Global Majors

USD Million FY00 FY01 FY02 FY03 FY04 FY05 FY06*

Accenture 2463 1057 244 498 690 755 817

CSC 233 344 440 519 605 683 831

EDS 1143 1363 1116 (1698) 123 381 643

Global Big 3 3839 2764 1800 (681) 1418 1819 2291

TCS 170 232 226 351 512 722 869

Infosys 137 169 197 271 414 596 740

Wipro 146 186 170 224 376 512 648

Indian Big 3 453 587 593 846 1303 1830 2257

* Estimate for FY 2006 Source: “Indian IT Services: Sector Outlook”, CLSA Asia-Pacific Markets Report, February 2005

26


Endnotes 1 “Technology: IT Services”, Goldman Sachs Global Investment Research, September 2004 2 Website of Infosys Technologies 3 CLSA Asia Pacific Report, February 2005 4 Forrester Report Offshore Outsourcing: The Complete Guide, 2004 5 Mukherji and Ramachandran, “Complementary and Continuous Innovation: Case of the Indian software

industry”, Journal of Academy of Business and Economics, 2004 6 “Year 2000, The Day After”, Business Today, 22nd September 1998 7 NASSCOM Strategic Review 2001 8 Ramachandran and Dikshit, Motorola India Electronics Private Limited, IIM Bangalore Case, 2002 9 ibid 10 “Critical Success Factors for Offshore Outsourcing”, Giga Information Group, Inc., December 12, 2002 11 “Criteria for Selection: Offshore Outsourcers”, Giga Information Group, Inc., January 2, 2003; “Demand

Analysis of Offshore IT Services”, Gartner Dataquest August 2002 etc. 12 “Offshore Outsourcing: The Complete Guide”, Forrester Research, September 2004 13 “Indian Outsourcing in the 21st Century: Benefits and Risks”, Forrester Research, September 2003 14 Eric Pfeiffer, “From India to America”, Forbes.com, 23rd August 1999 15 NASSCOM Strategic Review 2005 16 CLSA Asia Pacific Report, February 2005 17 “Low-Cost Global Delivery Model Showdown”, Forrester Research Report, August 2004 18 CLSA Asia Pacific Report, February 2005 19 “The Face-Off”, Business World, 26th September 2005 20 ibid 21 ibid

27

indian software industry details report on all it industry of india

Documents

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