'SCAM' to make 2013 a promising year for Indian IT- BPO sector

Dec 23 2012, 15:59 IST
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2012 was a year of challenges for the Indian IT sector. While some players grew strongly, others lagged. (Reuters) 2012 was a year of challenges for the Indian IT sector. While some players grew strongly, others lagged. (Reuters)
Summary2012 was a year of challenges for the Indian IT sector. While some players grew strongly, others lagged.

media and utility models.

2012 also saw elections in the US, which contributes about 60 per cent of the IT exports revenues and Barack Obama assuming the President's office in a second term.

Though Obama has a hard stand on outsourcing, industry experts said his re-election would not have a negative impact.

The year also saw some major acquisitions in the sector. In August, TCS acquired Pune-based Computational Research Laboratories (CRL) for Rs 188 crore in an all-cash deal, while Infosys acquired Swiss SAP implementation firm Lodestone for 330 million Swiss Francs (about Rs 1,932 crore) in September.

"This year, companies have been slow on acquisitions. But in 2013, we hope to see a pick-up and typical size could be between USD 25-50 million on an average as they focus on acquiring either high-end capabilities or customers," IDC's Mehta said.

Some action was also seen in the BPO space. While Infosys' BPO arm McCamish Systems bought US-based Marsh BPO to expand its presence in the group life insurance space, Sutherland Global Services bought out Apollo Health Street in a Rs 1,000 crore deal.

Genpact, which acquired Triumph Engineering and Atyati Technologies during the year, saw Bain Capital buying 30 per cent in the company for USD one billion.

The year also brought relief to Infosys and Tech Mahindra, which were embroiled in legal battles.

Infosys won the case against former employee Jack Palmer, who had alleged that the firm had asked him to sign documents which said workers were heading to the US to have meetings rather than to work there. In December, the software major settled a similar lawsuit by another former employee Satya Dev Tripuraneni through mediation.

Mahindra Satyam also settled claims for alleged fraudulent misrepresentations paying USD 68 million (around Rs 369.24 crore) to Aberdeen Global and 22 other funds, while in July, it had settled a similar suit in the US for USD 12 million.

Tech Mahindra took over the reins of the scam-hit Satyam Computer Services in April, 2009, and re-branded it as Mahindra Satyam.

2012 was a year of challenges for the Indian IT sector. While some players grew strongly, others lagged.

But experts seem to be on a common ground that while the macro environment would remain challenging, 2013 can be a good year with the right investments in platforms and innovation.

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