The competitive intensity of top Indian IT services companies measured against MNC giants has gone up a notch. The country?s largest exporter, Tata Consultancy Services, has added more incremental revenue in the last one year when compared with its global competitor Accenture, which reported a topline in excess of $28 billion.
Accenture in the last one year, spread across four quarters, registered a revenue of $28.56 billion at the end of August, against $27.86 billion a year earlier, showing an incremental topline addition of $700 million, according to data.
In comparison, TCS in the last one year ended June (latest reporting quarter), recorded a revenue of $12 billion with the incremental topline addition being $1.5 billion.
Besides TCS, the other IT major which has also overtaken Accenture in terms of incremental revenue additions is Cognizant. The US headquartered IT major with a large presence in India registered a revenue of $8 billion in the last one year with an incremental addition being $1.25 billion.
Though the revenue size of TCS and Cognizant is not comparable with Accenture, the pace at which they are adding revenue reveals the aggressiveness of the India-based players in the global IT services market in gaining market share.
TCS has already overtaken Accenture in terms of global headcount with the former having a strength of 277,586 and the latter?s count at 275,000.
Though India-based IT majors have over the years consistently beaten the global MNCs like IBM, Accenture or Hewlett Packard in terms of revenue growth rate, as they were of the smaller base, it is for the first time that they have overtaken in absolute addition to topline.
A senior executive with an Indian IT company on condition of anonymity said there is a growing acknowledgment among the global technology giants like Accenture on the competitive threat from India.
There are also other reasons being attributed for India-based companies overtaking Accenture. The global MNC?s greater shift of moving more resources towards offshore location outside of the US would mean lower revenue.
Secondly, Indian firms are now moving more aggressively into Europe, which hitherto was dominated by the likes of IBM and Accenture.
Outsourcing advisory firm ISG?s Asia Pacific president Sid Pai said, ?In the last several years, Indian players were better placed to take advantage of the boom time in the global outsourcing market. They had a clear penetration strategy of land and expand.?
Under the ?land and expand? strategy, Indian IT companies typically enter into relationship with a client through a small contract but over a period of time, it becomes a sizable account. Typically, Indian IT companies enter a deal with rate-based contract and move on to winning larger project-oriented work with the same client.
And finally move into managed-services contracts, which are typically the largest in size. For Infosys, few years ago, of the 14 clients in the $50-million bracket, only two were from large deals, the rest were through penetration strategy.
IT-BPO advisory firm Avasant?s president and managing partner Pradeep Mukherji said, ?One cannot strictly compare the operations of India-based players and a MNC like Accenture as both operate on a different scale and in many areas Indian firms do not compete with them directly.? According to him, there are some areas where one can consider both these segments equal ? in application development and maintenance and infra.