The Biggies Get Bigger...

The Indian IT industry never had a better time, nor did the

groups on the DQ Top 20 list. While the industry marched ahead at an astounding

speed of 50.3%, romping home with overall revenue figures of Rs 49,677 crore in

financial year 2000-01, the Top 20 players went ahead to garner Rs 31,298 crore-63%

of the total industry revenues. Interestingly, the magical figure achieved by

them is 94.7% of the total industry revenues of Rs 33,052 crore in 1999-2000.

The Giants

As

for the DQ Giants of 2000-01, there were few surprises-it was HCL, Tatas and

Wipro in the top three slots, same as the previous year. Compaq jumped three

rungs to finish at No 4 this time, while Infosys steamed in at No 5, pushing HP

and IBM out the Top 5. While HCL raked in a massive Rs 4,413 crore, the Tatas

showed total IT revenues of Rs 4,032 crore (of this, TCS alone had a lion's

share of Rs 3,142 crore). Wipro showed revenues of Rs 3,007 crore. Compaq with

Rs 1,945 crore (including Digital India's first full-year revenues of Rs 184

crore) and Infosys, the only software-only company in the Top 5, recorded Rs

1,901-crore revenues at a growth rate of 115%.

Overall, the giants cornered 30.8% of the industry revenue

while contributing 48.9% to the Top 20 kitty.

There were other interesting numbers. Only two of the 20

players that made it to the elite club registered growth of less than 40%. There

was the downside too-HP, for instance, had capped off its measly growth of 3%

in 1998-99 with an outstanding run in FY 1999-00, when it showed a growth of

101%. In 2000-01, however, it grew by only 26%, much below the industry average,

and was relegated to seventh position. CMC was the worst performer of the lot,

managing only to increase revenues from Rs 601 crore to Rs 672 crore, a growth

of 12%, It was no surprise then that the group slipped from No 12 last year to

No 20 this time around. While five of the remaining 18 members-Tatas, Wipro,

Tech Pacific, IBM and Pentafour-registered 40-50% growth, 13 of the Top 20

groups were well ahead of the industry growth rate.

There was shuffling within the pack too. The Tandon entities

entered the club after their bad run in 1998-99, jumping straight into 14th

position. Their growth rate was the highest at 132%. It was a year of

consolidation for this new member, which merged two of its group companies,

Advanced Technology Devices and flagship Tancom Electronics, to form Celetron.

Software giant Microsoft, with revenues of Rs 660 crore, was the only one from

last year's Top 20 list to make an exit, slipping from 17 to 21.

HCL Group

After two consecutive years of restructuring, the Shiv Nadar-led

HCL Group went ahead to reap the benefits-growing from a Rs 2,922 crore last

year to Rs 4,413 crore this time, posting a growth rate of 51%, against 21% in

the last fiscal. But while the restructuring at the group level helped the

companies create more synergy, the real growth came from juggling within each

company.

While

HCL Technologies, the only company under the direct stewardship of Nadar, has

been shifting focus to high-end value-added services and offshore-centric

development in the areas of Internet, e-commerce, networking and embedded

systems, HCL Infosystems too has changed its business mix. From a company that

used to sell plain vanilla boxes, HCLI has emerged as a top systems integrator

selling solutions, while also offering IT services and consultancy services.

With NIIT always a services company, Nadar has been able to

drive the group seamlessly through a paradigm shift-from a primarily

hardware-oriented focus to being a software and services giant. NIIT, meanwhile,

went ahead full steam to consolidate on its leadership position in the IT

training segment, capitalizing on the slowdown, as aspirants started rushing to

big brands for assurance on placements. Q4 also saw NIIT investing more to

create a brand pull and get aggressive with promotions.

Tatas

There's nothing like putting your money where your mouth is-and

no one proved this maxim better than the Tatas. Despite a slow takeoff last

year, the Indian monolith slapped shut all detractors who had questioned the

group's IT interests by clocking a revenue growth of 43% to scream across the

Rs 4,000-crore mark. This was a huge achievement for a group that posted a

meager 10% growth in the previous year. The group also ventured into new areas

like broadband and Internet access. Ratan Tata also capitalized on group muscle

power, getting Tata Industries, Tata Steel and Tata Power to bid for acquisition

of the government's stake in VSNL.

The IT companies in the stable-Tata Consultancy Services (TCS

is still a division of Tata Sons), Tata Infotech, Tata Liebert and Tata Elxsi-together

accounted for 10% of the total group revenue of over Rs 40,000 crore. The APAC

push continued and TCS set up shop in Singapore, while added 4,000 more to its

list of employees worldwide. Tata Infotech also doubled its growth from 11% in

1999-00 to 21% this fiscal, improving revenues from Rs 432 crore last year to Rs

524 crore this time. Power supply systems major Tata Liebert, meanwhile, jumped

by 39%, against 28% previously. The group's Bangalore-based technical

computing arm, Tata Elxsi revenues jumped from Rs 146 crore to Rs 179 crore.

Wipro

For Azim Premji and Wipro, it was another year of steady

growth. The group posted a 48% jump in revenues (41% last year) to cross the Rs

3,000-crore mark. Wipro has a reputation for being a giant that moves slowly but

steadily and surely. No 100% growth rates for this company, just a slow and

steady increase. Not contended with last year's reorganization, when the

company realigned and recreated its IT division by merging and consolidating its

line of businesses, the group went in for further change. Wipro Infotech's

peripherals division was hived off to create Wipro e-peripherals. Also, the

global support division was taken over by Wipro Technologies. The year-end also

saw the board recommending the merger of Wipro Net into Wipro Infotech in

financial year 2001-02. Meanwhile, Wipro Infotech president Arun Thiagarajan

retired and Wipro01markets' CEO Suresh Vaswani took the helm.

Wipro Technologies had been trying to target the Japanese

market for some time, and July of 2000 saw it setting up an offshore development

center in Hyderabad for Bussan Systems Integration Co, a Japanese telecom firm.

The company also set up offices in Germany and France and its first European

development center at Reading, UK, with 50 application specialists.

Compaq

Compaq

No 4 and No 5 yes, but Compaq and Infosys were the giants

that really made it big. Both galloped with more horse power than the others

could even think of. While Compaq thumbed its nose at PC leader HCL Infosystems

on its home turf to emerge as the new segment leader, Infosys and chairman NR

Narayana Murthy became the best-known company and most-talked-about Indian

businessman. And not without reason-Infy's net shot up by 115%. It was also

the only Giant apart from TCS to increase its manpower base substantially-from

5,389 to 9,831-this at a time when the global IT industry was seeing massive

layoffs.

For Compaq, the company that went through turmoil in 1999,

the fiscal was a period of resurgence. Not only did it catch up with MNC rivals

like HP and IBM, Compaq also emerged as the top player in the overall server

space. What led to Compaq's success this year was its focus on channels.

Compaq's DQ Top 5 entry was helped by services subsidiary Digital India's

strong performance. The company more than doubled its last year's revenue to

return with Rs 184 crore. While the company's hardware and networking services

businesses were transferred to parent Compaq, it stayed focused on software and

services.

Infosys

Infosys, conversely, benefited from its strategy of

de-risking business with a smaller proportion of revenues coming from its top

five and top ten customers. An unhappy experience with GE-its largest customer-at

one point of time ensured that the company would never again depend so heavily

on any single client. At the same time, its SEI CMM Level 5 certification and a

sound global delivery model ensured that 85% of its revenues came from repeat

customers. Another major initiative that helped Infosys outrun the slowdown was

its decision to diversify its geographical reach. Despite the fact that the

company started feeling the pinch at its US' operations, the initiative to

look for greener pastures yielded results-the year saw Infosys increase its

European revenue share from 15% last year to 18.5% this time. As for the US

market, the dependence came down, from 78% to 73.5%. 

What Makes Up the Top 20 Giants?

What Makes Up the Top 20 Giants?