Big IT service deals go east, threatening IBM, Accenture and EDS

The business IT analyst says that, by 2011, the likes of IBM Global Services, Accenture and EDS will face “stiff competition” from what it terms the ‘India-3’. Gartner says its research shows these relatively young IT service providers are increasingly being considered for strategic service deals – and that those will add to, but in some cases replace, today’s acknowledged leaders in terms or revenues. The organisation acknowledges that the India 3 are much smaller than the current leaders, but insists that their success in handling big clients’ needs to date has already led to record growth over 30 quarters – outperforming the incumbents by almost a 3:1 margin. Partha Iyengar, vice president and regional research director at Gartner, cites process excellence, world-class HR practices, providing high quality services at a low cost and the achievement of significant and disproportionate mind share compared to their size. He also points to a very rapid rise in market capitalisation of the India 3 – significantly higher, for example, than that of EDS, and almost on a par with Accenture, despite their currently much larger revenues. “The emerging megavendors have made dramatic progress in the past few years and have more than doubled their revenue in a four-year period, with the 2007 revenue being 2.6 times the 2004 revenue,” he insists. “This level of growth differential has continued even as these vendors have become multibillion dollar enterprises. To put this in context, there are just 100 service enterprises globally with more than $1 billion in revenue.”