Indian IT services organizations have been consistently expanding their share in global IT outsourcing. Presently with $116 billion worth of IT contracts coming up for renewal in 2017 and developing pattern towards parting up large deals, they can anticipate some more gains in the coming year.
Of the $116 billion, the main five Indian IT services suppliers represent $20 billion, the big five American organizations (IBM, Accenture, CSC, HP, Xerox) represents $29 billion, and the top four European firms (Capgemini, Atos, BT, T-Systems) represents $17 billion. The remaining part is split among a host of other smaller global and Indian providers, according to data from IT advisory firm ISG.
Two new patterns can possibly change the way the contracts have till now been circulated. Customers are tending to part large contracts -those who are in the $1-billion range -into smaller contracts. Indian organizations have traditionally been weak in the extensive contract space. Along these lines, any split should work to their advantage. The other pattern is the expanding digital scope of deals -cloud, analytics and automation are becoming key parts of IT contracts coming up for renegotiation. This also reduces the total contract value (TCV) available on these deals.
“While the net impact of this trend may not be accurately estimated, we expect that this would result in ACV (average contract value) drop of 2030% depending on the nature of deals and possibility of inclusion of disruptive solutions like cloud and automation,” said head of ISG- Dinesh Goel.
This implies Indian IT organizations services’ gains will depend to a great extent on how well they have adjusted to the new digital world in contrast with their global peers.
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Sameeksha Bhardwaj, From ITvoir News Desk