Three of India's biggest outsourcing companies have reported significant financial growth, demonstrating that the offshoring industry is showing no signs of slowing.
Last week Bangalore-based Wipro reported profits of 15.83 billion rupees (£190m) for the financial year ending 31 March, 2005, an increase of 58 percent over last year. Its revenue increased by 39 percent to 81.35 billion rupees (£979m).
Tata Consultancy Services, which is based in Mumbai, increased both its revenues and profits by over a third. It reported an annual profit of 22.56 billion rupees (£272m) and revenue of 97.27 billion rupees (£1.17bn), making it the first Indian IT company to make more than $2bn (£1.05bn) in revenues, according to the company.
But, its Bangalore-based competitor Infosys Technologies hopes to catch up soon. Infosys reported a $419m (£220m) profit and $1,592m revenue (£836m) this financial year, but expects to cross the $2bn revenue mark next financial year.
Although offshoring has experienced significant growth over the last few years, industry experts disagree on how important it will be in the future.
Research firm Gartner published a study in December 2004 that said offshoring isn't as widespread as people think, with lower-cost locations accounting for less than 3 percent of global information technology services spending. It expects this figure to grow to only 7 percent by 2008.
But NeoIT, a consulting firm that advises firms about offshore projects, holds a more optimistic view about offshoring. It predicted that offshoring will grow significantly in 2005 and that 80 percent of the Global 2,000 companies will have an offshore presence by the end of the year.