Executive Summary

Hyderabad is an important location for the Indian Information Technology & Business Process (IT-BP) industry. It contributes more than 97% to Andhra Pradesh’s IT-BP revenue. Andhra Pradesh is the fourth largest IT-BP revenue contributor in India, accounting for ~12% of the Indian IT-BP industry. The recent news around the division of the state of Andhra Pradesh into Telangana and Seemandhara, and its associated events, such as agitations and protests, have created negative perception around the stability, safety, and security in Hyderabad.

Everest Group closely examined the events and also conducted multiple discussions with industry stakeholders – both Global In-house Centers (GICs) and service providers to form a view on the “reality” behind the impact of the movement. Our assessment reveals that the Hyderabad IT-BP industry remained largely unscathed by the movement. Companies operating in this sector were able to avoid business discontinuity by proactively taking measures for employee safety, creating process back-up and redundancy and also through the preferential government support, in terms of power supply and imposing of Section 144, on this sector.

From a long-term standpoint, in the back-drop of upcoming Assembly elections in the state, there is limited clarity on the impact of this division on political situation, incentives, infrastructure development, etc. However, given the strong support that this sector has always received from the government, industry has pinned similar hopes from the future government.

This event further emphasizes on the importance of business continuity planning, assessment of concentration risk, and ongoing monitoring of location risks in location portfolio for all adopters of global services.