Vendor Saga
The domestic IT services market in 2006-07 drew similar parallel with the current national cricket team. Just as every sport analyst harps about the Big Four and the rest (supposed to constitute a cricket team), its a similar story. Beyond the Fab Four of the domestic market, the gap in 2006-07 was substantial; interestingly, the next five players were almost in a cluster, with even the tenth contender (Datacraft) not that behind.

Again it was the top guns who were largely responsible for making the 30% overall growth possible; while three of them had more than 50% growth (Wipro in excess of 70%), the comparatively sober 36% growth for TCS was more owing to its decision to stay away from services arrangements that involved large hardware plus software deals. Also, except its strong focus on the government (leveraging on CMC too), TCS was consciously looking at India more as a testing ground to finetune its SI capabilities for global forays.

The others in the Top 10 too did not belie expectations. GTL fell away from last years list after moving away from IT services altogether (eventually selling off the business to Orange Business Services); while Sify made its entry, riding strongly on corporate data services as well as security and VPN-related offerings. That the HCL group had two entities (and still claimed that there were no conflict areas) remained a conundrum; probably that HCL Technologies was more into remote infrastructure management, while HCL Infosystems was into network integration helped.

Tulip IT Services was the success story of the year. The launch of managed services as well as VPN services ensured a stupendous 242% growth; network integration earned the bread for Datacraft, while CMS too posed a significant 64% growth to reinforce itself into the big league. That so many of the Top 10 players like Wipro Infotech, HCL Infosystems, Tulip IT Services, CMS Computers, Sify and Datacraft had substantial network integration as well as NMS businesses explained its Rs 6,734 crore contribution to the domestic services pie.

IBM retained its pole position, imreasing the gap with the #2. Though the Bharti outsourcing deal continued to reap results, it still inked multiple deals in FY 07 across a diverse spectrum of varied industries. If the ten year business transformation pact with Idea Cellular to integrate, innovate and transform Ideas business processes and IT infrastructure was the cake, the icing came from the $29 mn deal with DLF to transform and manage its IT infrastructure.

Other significant contracts included the one for Financial Information Network and Operations (FINO), an ICICI Bank promoted services provider, for the first of its kind Micro Finance project in the country; a five-year services agreement to modernize Central Board of Direct Taxes (CBDT) IT infrastructure and to modernize key business processes of the Delhi International Airport to meet burgeoning air traffic in India. The acquisition of Network Solutions the year before (2005-06) too culminated into IBMs success: both financially as well as in terms of clients like Oriental Bank of Commerce, Andhra Bank, and Cosmos Bank among others.

Wipro Infotech too gained by the acquisition of 3D Networks, but the impact was more perceptible in the Middle East and Asia Pacific. While HDFC Bank and Dena Bank were marquee wins in the total outsourcing category, Wipro also set up the primary data center and DR site for BPCL; a turnkey data center for Gati; deployed the Dealer Management System for Suzuki; offered core IT Infrastructure services and Business Service Management and Application Operations to 240 branches of HDFC Standard Life; besides comprehensive SAP implementation for Hyundai. Wipros elevation to the #2 spot in the pecking order was further testimony to its growing maturity in business offerings, especially on the consulting front.

Wipro Infotech provided advisory services to customers in the areas of e-Governance, security governance, strategic cost reduction and process consulting through tools like Six-Sigma & LEAN. The company consulted fifteen state governments in the areas of capacity planning and IT roadmap creation for providing citizen services eg land records, tax transactions; it provided advisory services to Center for Railways Information Systems for optimization of Freight and Passenger movement; in addition, Ashok Leyland entrusted Wipro consulting to optimize their entire spend in areas like spend analysis, vendor base optimization, global sourcing, and value engineering, while Navi Mumbai SEZ relied upon Wipro consulting to define the processes and develop a comprehensive long term IT strategy.

Though HP trailed IBM and Wipro, it still bagged a number of blue-chip accounts during the year. On the government front, the seven-year deal with the Karnataka government involved e-procurement services deployed across all departments, while the deal with the Government of Maharashtra healthcare department involved IT solution deployment in 20 hospitals across the state. Among other key accounts, the Ashok Leyland contract was extended; Bajaj Auto deal was re-signed; and the scope of Madura Garments deal expanded to include entire IT landscaping.

TCS was riding high on the MCA 21 deal, where it was following a classic BOT model. The core banking expertise derived from the FNS acquisition and formation of C-Edge Technologies enabled BANCS core banking deployment in State Bank of India, Central Bank of India as well as the Bank of Maharashtra. TCS led the way in many of the SWAN projects too, while the expertise of the erstwhile Tata Infotech was leveraged on certain defense-related projects.

Rajneesh De
rajneeshd@cybermedia.co.in

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