Indian outsourcing takeover is imminent

US to lose its "mega-vendor" crown?

The US outsourcing giants will be knocked off their throne by the emerging Indian powerhouses by 2011, according to analysts at Gartner.

Infosys, Tata Consultancy Services (TCS) or Wipro will augment, or in some cases surpass, "mega-vendors" Accenture, EDS and IBM by revenue in the strategic services market, it says.

Gartner says the "India-3" have used their success at meeting client needs to achieve record revenue growth - of about 40 per cent - over 30 quarters and have enjoyed growth rates almost three times that of the incumbent mega-vendors.

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The market capitalisation of the Indian providers is significantly higher than that of EDS, and almost on par with Accenture, which are much larger companies in terms of revenue, Gartner says.

Partha Iyengar, regional research director at Gartner, said in a statement: "The emerging mega-vendors 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."

Gartner says the India-3 have achieved this by demonstrating process excellence, world-class HR practices, providing high quality services at a low cost and by winning significant "mind share" compared to their size.

But Gartner warns the India-3 will have to continue to evolve to reach true mega-vendor status, in particular they will have to achieve similar levels of revenue per employee to the US big three.