The Indian information technology sector is likely to witness
heavy consolidation in the coming months as mid-size companies
struggle to sustain growth amid a rising anti-outsourcing tirade
in the United States.
"We expect many mergers and
takeovers in the IT sector. It will be among Indian companies and
also overseas deals. This is very important for mid-size
companies," P.N. Sudarshan, senior director at global consulting
firm Deloitte Touche, told IANS in an interview.
He said the focus of Indian outsourcing companies in the coming
months will be on Europe and the Asia-Pacific region.
"The map is much wider now. There are good opportunities in
European countries like Germany and France and also in
Asia-Pacific. Outsourcing companies will have to diversify revenue
base to sustain growth," Sudarshan said.
The $50-billion Indian IT industry gets over 60 percent of its
revenue from the US. Nearly 20 percent of the revenue come from
Europe and rest of the world accounts for 20 percent.
Eric Isabey, chairman of Pierre Audoin Consultants, who is
advising the Indian IT firms on European ventures, told IANS
recently that software giants like Infosys, Mahindra Satyam,
MindTree and HCL Technologies were looking for local partners in
Germany and France to expand their business in the European
"We see a lot of value creation in cross-border deals. It will
help Indian companies in getting a strong foothold in Europe,"
said Sudarshan, adding such deals were very important for mid-size
According to a Deloitte survey, smaller IT companies have not been
able to catch up with their larger counterparts in the last three
Deloitte is conducting the sixth India edition of Technology Fast
50 survey, which ranks 50 fastest growing companies in technology
and related sector by comparing their three-year revenue growth.
Sudarshan said Deloitte would publish the survey result in the
second week of November. "Nomination is closed and we are now
analysing the data. The findings will be available in November."
On changing dynamics of the Indian technology sector, Sudarshan
said software companies have increased their dominance in the last
few years. The share of software in the sector has increased to 80
percent while that of telecommunications and networking declined
to six percent, according to the 2009 survey of Deloitte's
Technology Fast 50.
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