Indian IT companies will storm the UK market this year

By Nicola Brittain
30 Apr 2010 View Comments
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Seven Indian companies saw combined growth of five per cent in 2009

Despite a a UK IT services market decline of four per cent last year, when inflation is considered, the seven Indian companies in the market saw combined growth of five per cent.

During a webinar looking at key trends within the UK IT market, hosted by analysts TechmarketView and PAC, Techmarketview’s Managing Partner Anthony Miller argued that will enormous cuts to take place in the public sector, and a new openness to offshoring services, the Indian’s share of the systems integration market will continue to rise.

Further reading

The Indian players, including TCS, Infosys, Cognizant, Wipro, HCL and Mahindra Satyam provided services worth a combined £2.4bn in 2009.

All are expecting good growth for 2010 including forecasts from Cognizant of 20 per cent growth with Infosys predicting growth of between 16 and 18 per cent.

Other non-Indian companies in the market, excepting IBM and Capital have flat forecasts for 2010, with those that make least use of outsourcing or offshoring likely to fare worst throughout 2010.

Public sector trends

The public sector was a relative safe-haven for UK IT professionals last year with growth for IT suppliers ATOS and Logica as a result of government deals. However, the general election has stalled decision making, with only one quarter of the money spent on deals made in the first quarter 2010 by comparison with that of 2009.

Miller explained that further deals might not be struck for some time: “How quickly the new government will begin signing deals with the IT suppliers after the election will depend on whether they want to engage with third parties (IT suppliers) to help them scale down head counts, or whether they will make these decisions before they engage with external suppliers.”

Additionally, Miller argued that the government is increasingly open to new ideas from the continent around citizen data management and improving customer services, which is good news for traditional suppliers to continental governments.

CIO trends

The webinar also looked at key trends for CIOs, these include increased pressure to get value for money. This will see CIO’s industrialising service delivery by using lower skilled and less labour as labour is replaced by technology. They will also look offshore for more services and move towards output-based pricing of IT services.

Miller said: “Output based pricing can be very tough for suppliers who must put a lot of work into understanding an organisation before it can even pitch.”

CIOs will also be looking to respond rapidly to business needs, and many will look to do so by adopting cloud computing.

However, Miller argued that “cloud computing” is often not what it seems.

“Cloud computing is often just the repackaging of existing services from suppliers, one of the problems is that there is not industry definition of what it actually is – in many cases a public cloud is just the provision of virtualisation with a few additional services,” he said.

CIOs will also be looking to have more control over the business. This tends to take the form of IT transformation projects, which require partnership or significant consultation with specialists, and there aren’t many of these according to Miller. However he says: “Watch out for the Indian players in this field, they embarked on several transformation programmes in the retail and manufacturing sectors last year and are likely to move into the public sector following a partnership deal with Cardiff council in November last year.”

Finally, CIOs will be looking to ensure that a business has the correct security governance, risk management and compliance as security threats increase and new standards such as the PCI-DSS credit card standard are enforced.

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