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Indian IT service providers are poised to look at a larger share of the global USD 28 billion addressable remote infrastructure management RIM services in the next five years, on account of cheaper labour and deeper skillsets, according to a recent report jointly prepared by Nasscom and advisory firm Mckinsey. Indian IT service providers already account for about 60 percent of the global RIM services. RIM, a general term used for the management of various IT services such as applications, network, IT helpdesk, software deployment and support, forms a part of the broader IT BPO outsourcing industry.
IT companies such as Wipro, Patni, Satyam, TCS, Infosys and HCL have been building their capability towards this opportunity through acquisitions. Some of the notable acquisitions were Wipro acquisition of the USbased Infocrossing, Satyams acquisition of the UK based Nitro Solutions, Patnis acquisition of InteQ and IBMs acquisition of the India based Network Solutions.
In the current economic scenario RIM is however looked with different objectives. In the face of the economic downturn the clients in the US are looking at RIM on a cost arbitrage aspect, while those in Europe look at it as their growth enabler, said Stephen Ward, AVP, infrastructure management services at Hyderabadbased Satyam.
About of 24 percent of Satyams workforce handles its RIM business. As part of RIM services it provides managed security and network services to more than 100 clients globally.
The report states that India’s strong position in infrastructure services delivery draws upon cost competitiveness, high quality delivery, and well established process transition and hybrid delivery capabilities.
A Nasscom strategic review 2008 had earlier mentioned that while Brazil and Eastern Europe prove to be twice in terms of cost of outsourcing and China proves to be 30 percent more expensive as compared to India. In talent comparison Brazil stands 15 percent poorer while Eastern Europe and China does not provide diverse and deeper skillsets such as skills required for mainframe computing.
According to the USbased outsourcing advisory firm TPI, the outsourcing of IT and BPO work grew at 7 percent in 2008 of which Asia Pacific region recorded the most followed by EMEA.
Indian IT service providers continue to gain market share within the broader outsourcing market of total contract value TCV of more than USD 25 million. Market share of Indiabased service providers was up to 9 percent in 2007 against 5 percent and 6 percent in 2005 and 2006 and in 2008 it has touched doubledigit growth.
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