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This month, HfS Research Ltd. announced its annual list of the 10 largest Global IT Services providers. There were no big surprises since 2012, except that TCS jumped up from number 13 in 2012 to number 10 in 2013 (displacing Montreal-based IT services firm CGI).
How did TCS (owned by The Tata Group) jump into the Top 10? They seem to have found the secret sauce to creating profitable work from the low margin, low value work that the top tier providers such as IBM, HP, Accenture, SAP, etc. don’t want to do. In addition, they’ve been successful at focusing on managed services and fixed price projects, thereby moving away from the FTE pricing model.[i] Additionally, TCS is frequently seen as being the most flexible service provider on pricing and terms, and has a developing reputation for winning any deal anywhere in the world at any price, if it really wants.[ii]
India-based IT Services companies in general, continue to grab market share, as seen in this chart from The Economic Times.
According to Phil Ferhst, the founder and CEO of HfS, “There are some real factors that could diminish the competitiveness of the Indian majors, namely rising domestic wages, rupee appreciation, robotic process automation, cloud-based offerings and the availability of skilled BPO staff, however they have proven very adept at protecting their existing business, while continuing to grow their market share.” [iii]