Indian software developers snare just 2% of Australian market, says Gartner
Announcement posted by Gartner 28 Jul 2003
Indian companies have captured just 2 per cent of the Australian sourcing market for development and integration services, new figures from the worlds leading IT research company, Gartner (NYSE: IT and ITB), reveal.
Australian business worth $US47.52 million was won predominantly by five of Indias leading service providers, Tata Consulting Services, Satyam, Infosys Technologies, Pentasoft and three companies in the HCL group in 2002.
Some of those firms grew as much as36 per cent, leveraging their low-cost business models by fulfilling contracts in Indiaas well as using Australian developers, Gartners Asia-Pacific Vice-President for Research, Rolf Jester, said.
"These companies can be pleased with this achievement as their competitors are all registering single-digit growth," he said. "However in the scheme of things, this is a small share of the market. Certainly, it is disproportionate to the large amount of opposition to offshore sourcing that has been expressed in Australia in the last few months."
Mr Jester said that given the surveys findings, Australia was witnessing only the beginning of a political backlash against offshore sourcing because it was seen to threaten the jobs of local software developers.
"Opposition will eventually die away as Australian companies take advantage of the quality and cost benefits and realise there is more to be gained economically by embracing, not resisting, the global delivery model."
Australias software development and integration sector was worth $US2.376 billion in 2002, according to Gartners survey. The top 10 players, led by IBM GSA, dominated by capturing 46 per cent of the market.
Mr Jester said: "Indian companies are just starting to penetrate the Australian market. However, the others are fighting back by establishing software operations in low-cost regional centres and adopting differentiated strategies."
IBM GSA had recently announced it would establish a sourcing centre in Ballarat, Victoria, while others now had operations in Adelaide, New Zealand and even India.
Recent Gartner market studies say Business Process Outsourcing (BPO) a strength of Indias IT industry and a key element in the sourcing sector will grow 11 per cent worldwide this year while global IT services revenue should increase 3 per cent.
The new findings come on the eve of Gartners summit, "Outsourcing The Next Generation", at Darling Harbour, Sydney, on Tuesday and Wednesday (July 29-30). It is the biggest ever single-topic conference hosted by Gartner in Australia and will be attended by more than 300 delegates.
Gartner Technology Summit Outsourcing the Next Generation beginstomorrow at Darling Harbour Convention Centre.A media roundtable will be held in the Analyst Workroom at 11.45am. Hosted by Craig Baty, Linda Cohen, Sujay Chohan and Rolf Jester, the above and other issues will be open to discussion.To register attendanceto the roundtable and event, please call Jo Lobban on 02 9459 4692 or email joanna.lobban@gartner.com****
About Gartner:
Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. Gartner's businesses are Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has more than 3,800 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. Revenue for calendar year 2002 totaled $888 million. For more information, visit www.gartner.com.
Australian business worth $US47.52 million was won predominantly by five of Indias leading service providers, Tata Consulting Services, Satyam, Infosys Technologies, Pentasoft and three companies in the HCL group in 2002.
Some of those firms grew as much as36 per cent, leveraging their low-cost business models by fulfilling contracts in Indiaas well as using Australian developers, Gartners Asia-Pacific Vice-President for Research, Rolf Jester, said.
"These companies can be pleased with this achievement as their competitors are all registering single-digit growth," he said. "However in the scheme of things, this is a small share of the market. Certainly, it is disproportionate to the large amount of opposition to offshore sourcing that has been expressed in Australia in the last few months."
Mr Jester said that given the surveys findings, Australia was witnessing only the beginning of a political backlash against offshore sourcing because it was seen to threaten the jobs of local software developers.
"Opposition will eventually die away as Australian companies take advantage of the quality and cost benefits and realise there is more to be gained economically by embracing, not resisting, the global delivery model."
Australias software development and integration sector was worth $US2.376 billion in 2002, according to Gartners survey. The top 10 players, led by IBM GSA, dominated by capturing 46 per cent of the market.
Mr Jester said: "Indian companies are just starting to penetrate the Australian market. However, the others are fighting back by establishing software operations in low-cost regional centres and adopting differentiated strategies."
IBM GSA had recently announced it would establish a sourcing centre in Ballarat, Victoria, while others now had operations in Adelaide, New Zealand and even India.
Recent Gartner market studies say Business Process Outsourcing (BPO) a strength of Indias IT industry and a key element in the sourcing sector will grow 11 per cent worldwide this year while global IT services revenue should increase 3 per cent.
The new findings come on the eve of Gartners summit, "Outsourcing The Next Generation", at Darling Harbour, Sydney, on Tuesday and Wednesday (July 29-30). It is the biggest ever single-topic conference hosted by Gartner in Australia and will be attended by more than 300 delegates.
Gartner Technology Summit Outsourcing the Next Generation beginstomorrow at Darling Harbour Convention Centre.A media roundtable will be held in the Analyst Workroom at 11.45am. Hosted by Craig Baty, Linda Cohen, Sujay Chohan and Rolf Jester, the above and other issues will be open to discussion.To register attendanceto the roundtable and event, please call Jo Lobban on 02 9459 4692 or email joanna.lobban@gartner.com****
About Gartner:
Gartner, Inc. is a research and advisory firm that helps more than 10,000 clients leverage technology to achieve business success. Gartner's businesses are Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has more than 3,800 associates, including approximately 1,000 research analysts and consultants, in more than 75 locations worldwide. Revenue for calendar year 2002 totaled $888 million. For more information, visit www.gartner.com.