Within IT services, the Indian IS Outsourcing segment is one of the fastest growing – with an annual average growth of about 18 per cent. In FY2012, the market size had crossed USD 7 billion, a growth of nearly 2x in the last five years. This serviceline is also emerging as the key growth driver for service providers. This segment has evolved from a heavily off shore (remote) oriented to a hybrid model, requiring service provider presence both onsite and off shore. In the recent times, it has also been impacted by emerging technologies like cloud, mobility and unified communications. The rapid pace of changes that are being brought in by disruptive technologies, shifting customer needs and preferences and changing competitive landscape is fast transforming the market dynamics.
Although the new market landscape off ers a new set of opportunities and challenges, the paradigm shift requires IS providers to quickly reinvent market strategies, align value proposition and build necessary capabilities. The mega-trends of cloud computing, mobility and unified communications will not only alter the service opportunities but also change the competitive ecosystem, giving rise to competition from new breed of players including telecom service providers, hosting providers, SaaS vendors and OEMs.
Given the strategic importance of Infrastructure services to the overall service revenues, it is essential to re-look at the road-map from a long-term perspective. Investing in emerging opportunity areas, developing the appropriate IP tools to create differentiation and forming strategic alliances to expedite time-to-market will be critical to sustain leadership over the next decade.
Changing relevance of IS Outsourcing drivers altering core value proposition
This study puts forth the changes in core markets and the impact of megatrends on the provider ecosystem. It also examines the altering customer needs and expectations that demand Indian providers to re-devise their growth strategy and value proposition. The study also defines the way forward for this segment – strategies to adjust to changing technologies to maintain competitiveness and details a call to action for stakeholders within the ecosystem. This business transformation will be essential to maintain India’s leadership and ability to spearhead the next wave
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