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.

DQ Top 5

1 HCL
Group
2. Tatas
3. Wipro
4. Compaq
5. Infosys

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.

Slices of the Pie
  2000-01 1999-00
  Revenue (Rs
crore)
Revenue % Revenue (Rs
crore)
Revenue %
Top 5 15,298 31 10,308 31
Top 20 31,298 63 19,980 60
Others 18,379 37 13,072 40
Industry 49,677 100 33,052 100

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?
  2000-01 1999-2000 1998-99 1997-98 Group
Companies
Rank Group Revenue
(Rs crore)
Growth
(%)
Revenue
(Rs crore)
Growth
(%)
Revenue
(Rs crore)
Growth
(%)
Revenue
 (Rs crore)
Growth
(%)
Group
Companies
1 HCL* 4,413 51 2,922 21 2,424 6 2,284 34 NIIT, HCL Info, HCL Tech,
                    HCL Perot *
2 Tatas 4,032 43 2,812 10 2,551 35 1,886 13 Tata
Consultancy
                    Services,
TIL, Tata Elxsi,
                    Tata Liebert
3 Wipro 3,007 48 2,036 41 1,443 38 1,049 8 Wipro
Ltd,
                    Wipro ePeripherals
4 Compaq 1,945 79 1,084 59 681 57 435 21 Compaq
India,
                    Digital
Equipment
5 Infosys 1,901 115 882 73 509 95 260 81 Infosys
Technologies
6 Tech Pacific 1,727 47 1,172 61 729 65 442 99 Tech Pacific
7 HP 1,705 26 1,356 101 674 3 656 10 HP, HP ISO
8 IBM 1,662 41 1,182 32 894 35 664 15 IBM India
9 Satyam 1,388 87 744 97 378 112 178 100 Satyam
Computer
                    services, Satyam Infoway
10 Redington 1,345 80 749 76 426 48 287 68 Redington
India

What Makes Up the Top 20 Giants?

What
Makes Up the Top 20 Giants?
  2000-01 1999-2000 1998-99 1997-98 Group
Companies
Rank Group Revenue
(Rs crore)
Growth
(%)
Revenue
(Rs crore)
Growth
(%)
Revenue
(Rs crore)
Growth
(%)
Revenue
 (Rs crore)
Growth
(%)
Group
Companies
11 Pentafour 1,136 42 797 34 596 109 285 66 Pentamedia
Graphics,
                    Pentasoft Tech
12 Ingram Micro 930 91 486 202 161 313 39 225 Ingram Micro
13 Samsung 881 76 501 54 325 60 203 Samsung Electronics India
14 Tandon 851 132 366 861 38   Celetron, Cortech
15 Aptech 766 50 511 32 386 27 304 32 Aptech,
Hexaware
16 Cisco 765 113 360 143 148 111 70 84 Cisco
17 Patni 759 58 479 30 368 49 248 42 Patni
Computer Systems,
                    PCS, data conversion,
                    PCS
UK, PCS GMBH
18 Silverline 709 61 440 300 110       Silverline technolgies,
                    silverline
tech US,
                    Sky Capital, Seranova
19 Cognizant 704 70 414 43 290 156 113 139 Cognizant Technology
                    Solutions
20 CMC 672 12 601 33 451 38 327 35 CMC, Rouge Baton

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