Indian outsourcing companies target Europe

Tom Espiner ZDNet.co.uk

Published: 16 Apr 2007 08:30 BST

Indian outsourcing providers are gaining traction in continental Europe, and are increasingly focusing their efforts there, according to Gartner analysts.

In the last two quarters Gartner has tracked the growth of the six largest Indian offshore service providers — TCS, Infosys, Wipro, Satyam, HCL and Cognizant. All of these reached or exceeded $16bn in revenues for the 2006 fiscal year.

"Clients in continental Europe are starting to use Indian offshore service providers without announcing the deals," Gartner analyst Claudio Da Rold told ZDNet UK.

The reason for this reticence is that European business leaders still worry about the effect of offshoring on their company's workforce and external image, according to Gartner.

Having developed the UK and US markets first, Indian service providers will increasingly challenge local outsourcing providers, said Da Rold. But Indian providers will find it more difficult to take on the multinational IT services giants, such as Cap Gemini, IBM, Accenture and Atos Origin. These companies have been restructuring towards a global delivery model, in part by reducing workforce in Europe and gradually increasing workforce in India.

To be successful, Indian companies should form partnerships or acquire local providers, and make sure they have front-end staff based in Europe, Da Rold added.