In its report titled, IT Trends 2004: Offshore Outsourcing, the research firm has said that offshore outsourcing to India will grow by minimum 30 per cent during 2004, as global outsourcing firms like IBM, EDS and Accenture will continue to increase their presence in India.
These companies will increase their presence in India to compete against the major Indian vendors, to accommodate companies that are struggling to do more with less, the report says. It adds that using India as an offshore destination, has quickly developed into an optimisation strategy rather than a pure cost containment initiative, due to the quality and productivity benefits being realised.
India will continue to be the preferred offshore country and Indian vendors will retain their leadership in the outsourcing marketplace, Giga said, adding that at the same time Indian vendors will continue to develop facilities in low-cost nations Eastern Europe and China.
India subscribes to the if you cannot beat them, join them philosophy. Indian vendors realise that due to Chinas immense inexpensive labour pool and government support for software exports, it will be a strong force in the near future, the Giga report said.