November 15, 2006
As the debate on outsourcing continues, Indian companies are gaining market share through acquisitions
Analysis of:
Small Acquisitions Broaden Indian Outsourcer's Services | www.investors.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Implications: The data is conflicting... how much of an advantage do companies get by outsourcing their IT and call centers to India? My experience through three expansions is the quality is very good, but the cost advantage is diminishing. But that adds to the debate. Companies are becoming slower to move on international outsourcing, and at times, are withdrawing their operations (Apple recently pulled the plans for a 3,000 person call center in Bangalor). If this trend continues with the slower pace, how will these countries continue to expand? Acquire domestic US outsourcing companies.
Analysis: Wipro is just one example of an aggressive, India-based company expanding its market share through acquisitions. While some India based companies are buying competitive India-based companies, the aggressive firms are targeting US based outsourcing companies. This is a great way to continue the country's growth... buy the business, show the quality standards are high, and drop the costs. As more and more US and Europe based company hesitate to make the move, this strategy to buy the business and bring it overseas will continue to grow (at least until the cost advantage disappears).
Analysis: Wipro is just one example of an aggressive, India-based company expanding its market share through acquisitions. While some India based companies are buying competitive India-based companies, the aggressive firms are targeting US based outsourcing companies. This is a great way to continue the country's growth... buy the business, show the quality standards are high, and drop the costs. As more and more US and Europe based company hesitate to make the move, this strategy to buy the business and bring it overseas will continue to grow (at least until the cost advantage disappears).
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