$150 million in 1991-92 to $5.7 billion in 1999-2000 ( $4
billion worth of software exports )
Annual growth rate of Software Exports - over 50 percent
Software exports to around 95 countries around the world
More than one third of the global Fortune 500 companies
outsource requirements to India
Upcoming market openings for Indian IT industry
IT Services
Software products
IT- enables services
E-business
Source: Nasscom
4. OUTLOOK
If company guidance's are anything to go by, then the outlook
for the industry seems bleak
http://www.businessweek.com/globalbiz/content/jan2009/gb20090121_832742.htm
Collapse of the US car industry to impact TCS, Wipro and
Infosys
During recessions, tech spending has historically fallen by
more than the GDP
A McKinsey study indicates that IT spending has typically
fallen by 5-7 times the GDP in the past recessions
The BFSI sector that pioneered the move offshore idea has been
butchered and is expected to worsen
5. MAJOR PLAYERS
Infosys Technologies
Wipro Technologies
Tata Consultancy Services
IBM Global Services
HCL Info systems
Cognizant technology solutions
6. RIVALRY AMONGST EXISTING PLAYERS
Multiple players:
TCS
Accenture
Wipro
Infosys
Cognizant
HCL Tech
Patni . . . . The list is large
Competition is global in nature and stretches across boundaries
and geographies
Replication of the Indian off shoring model by MNC IT
majors
7. RIVALRY AMONGST EXISTING PLAYERS ( CONTD )
Until the recent crisis, the market as a whole was
expanding
A growing market meant that there was enough and more for all
the players in the market
The problem of stagnating markets
Implies that all the players need to gun it out amongst
themselves to grow revenues
Rivalry expected amongst existing players to intensify
8. INFOSYS TECHNOLOGIES
Specializes in delivering technology enabled business
Started in 1981 with seven people and cash worth US $250
Business and technology consulting
Systems Integration
Application services
IT outsourcing
Business Process outsourcing
IT infrastructure services
9. INFOSYS TECHNOLOGIES ( CONTD )
Global presence with over 50 offices and development centers
across the world
2008 turnover excess of $4 billion
SOURCE: www.infosys.com
10. SWOT ANALYSIS
Strengths :
Enhanced competitive edge Indian based operations
Low labor costs, high relative rates of inflation
Relatively high skill levels in IT
Extremely strong financial position enormous capital to
expand
Global brand respected across the world
Positive Cash flows Supporting prospective global
operations
Varied Domains of Businesses foray into products and
services
11. SWOT ANALYSIS( CONTD )
Weaknesses
Occasionally falters to secure contracts in North America
missing out on lucrative business
Small player as far as global players are concerned
Multi cultural environment
Business consulting practices dominated by major players like
Accenture and IBM
12. SWOT ANALYSIS ( CONTD )
Opportunities
Lucrative expansion options in China
Alliance between Infosys and Schlumberger
European and North American companies to outsource a portion of
BPO operations
Provides outsourcing and Cost reduction strategies help clients
during global recession
13. SWOT ANALYSIS ( CONTD )
Threats
Move to offshore service companies in countries like China or
Korea
Has to compete for skilled labor may affect wage levels and
retaining staff
Competitors coming from China, Korea low cost labor and
adaptive to western practices
14.
IFE Matrix indicates that India IT Inc. is strong and it has
done well, so far, to overcome its weakness
INTERNAL FACTOR EVALUATION MATRIX
15.
EFE Matrix indicates that India IT Inc. is not responsive in
exploiting opportunities and in mitigating the impact of
threats
EXTERNAL FACTOR EVALUATION MATRIX
16. STRATEGIES IN DOWNTURN
Companies such as Infosys exhort employees to go on a 1-yr
sabbatical work for an NGO
http://www.business-standard.com/india/storypage.php?autono=340253
Cash rich firms such as TCS, Wipro and Infosys scouting around
for dirt cheap acquisitions
Case in point
TCS $505M acquisition of Citigroups Indian back office
operations in October 2008
Wipros acquisition of CITOS for $127M in December 2008
http://www.vccircle.com/500/news/wipro-acquires-citi-technology-services-for-127m
Slow down in wage hikes and a near recruitment freeze