Mid-sized Indian Service Providers: Stepping Up in Changing Times

25 Sep 2013
by Ashwin Venkatesan, Chirajeet Sengupta, Jimit Arora

Executive Summary

India continues to remain the dominant IT services offshoring market, characterized by the presence of a large set of diverse and competent service providers. The Indian IT services service provider market, thereby, provides a wide array of choices for enterprise and mid-market IT services buyers, as they seek to optimize their service provider portfolio.

In recent times, the evolving IT offshoring landscape has thrown out a new competitive dynamic, with IT outsourcing no longer remaining just “back-office“, but in effect a key business enablement tool for enterprises. New value drivers for outsourcing, such as innovation and responsiveness, as well as the advent of disruptive technologies, such as cloud computing, are pushing enterprises to look for specialized products and solutions that help lower time-to-market, and enhance the overall customer experience.

Mid-sized Indian IT service providers have identified a unique opportunity in addressing these specialized requirements of enterprises. These players have created specific niches by building specialized offerings (for specific industry verticals, service lines, or technology stacks), and have created a differentiated positioning amongst enterprises of varying sizes through their maturing capabilities and a flexible engagement approach.

This Everest Group research examines the relevance of Indian mid-sized service providers within the context of an enterprise services portfolio. As examples, we also look at the distinctive value proposition of four leading mid-sized service providers – Hexaware, Microland, NIIT Technologies, and Polaris Financial Technology. These service providers, in aggregate, have achieved a higher revenue growth than the industry average over the past few years. This is mainly attributable to their success in establishing differentiated offerings through focused investments, efficient mining of existing clients, and creation of a strong brand in their niche areas.

This is illustrative of the imperative for mid-sized players to break away from the undifferentiated, “me-too” positioning platform that has traditionally revolved around labor arbitrage values. In order to succeed in the market, mid-sized Indian IT service providers must pick their areas of specialization, excel in them, and communicate their capabilities to the broader market.

In this report we examine:

  • The role of mid-sized service providers in a buyer’s portfolio
  • Dimensions for differentiation of mid-sized service providers
  • Fact-based snapshots, including details on the differentiated foundations for growth, and a case study highlighting success for each of the four service providers
  • Implications for buyers and service providers
 

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