The Glocal Top Twenty Analysis



So here we are, another Top 20 issue is in your hands and as
you flip through looking for the starting point of the analysis the whole
industry waits for, you want to know what contrarian idea you can pick up in
this column? For a start, try the Glocal Top 20 analysis–an examination of
companies which would figure in a list of potential worldwide success stories,
with an interesting twist that this list is not based on current revenues or
profits but on opportunity share, the ability to continue to capture
disproportionate market and customer attention in the years to come.

The analysis is based on the premise that in a year when IT
spending remained flat, business stayed largely with the incumbents, but in the
years to come when spending recovers–albeit in a cyclical fashion–market
share shifts will be an interesting factor to watch. Who are the Top 20 glocal
(or global and local) players from India and abroad who have the ability to
shine in this emerging new world of CIO preferences?

“In the years to come, when spending recovers, marketshare shifts will be a very interesting factor to watch out for”

Ganesh
Natarajan

In the hardware segment, the best-positioned companies are
those with industry-leading cost structures and the ability to minimize cost of
new computer acquisition. A JP Morgan study points to three definers of
competitive dynamics in the hardware industry—traditional capital budgeting
economics, with "good enough" solutions that minimize total cost of
ownership being preferred to "best of breed", a return to the old
preference for hardware vendors who package a bundle of integration services and
standardized technology being the preference for all traditional corporations
over "islands of incompatible computing environments". In such a
context, the ability of Dell to take marketshare away from rivals makes it the
top contender for pole position. IBM’s service-centric business model makes it
a top pick as the firm most likely to succeed in the long term if the trend of
looking for integrated solutions continues. Question-mark companies are HP,
which has IBM and Dell eating away at marketshare at the top and bottom end of
the buying spectrum and, of course, Sun–whose core Unix market faces an
uncertain future and whose diversification efforts have still not garnered
enough momentum. Add to this list Cisco and Avaya, and you have a half-dozen
names to watch.

The winners from the packaged software industry are
unarguably Microsoft, Oracle and SAP. Our own company’s evaluation of the
feasibility of moving from Microsoft to a Linux environment showed that even if
corporate users could be weaned away from their daily diet of Windows, Outlook,
Word, Excel and Powerpoint, it was inconceivable that the developer community
would even consider abandoning their core development platforms, mostly provided
by the ubiquitous Microsoft. Oracle as the numero uno apps provider and SAP with
its quiet dominance of the manufacturing enterprise space make it to the list.
In the domain-specific package segment, one proudly puts in the first Indian
name–i-Flex. Retek, a company that dominates the ERP suite market for
retailers, and Microstrategy, the company likely to succeed in an era of
continuing focus on datawarehousing and business intelligence, are also on their
way to the top.

In services providers, while Accenture and EDS will score,
the former, with its ability to scale offshore capabilities, and the latter,
with its best shore strategy and newfound ability in the BPO space… One can
also add Cognizant with its consistent record of outperforming both global and
Indian companies, and the Indian trio of TCS, Wipro and Infosys. One is tempted
to choose Polaris, after its integration pains are complete, and Zensar, with
its unique solution blueprinting framework strategy and low-cost, high-quality
offshore development, as players to watch for the future. For the BPO space,
Msource and Spectramind are the top picks. Add to that global successes like
Convergys and Exult, and one training name from New Horizons, NIIT or Aptech,
and we have a Top 20 to watch out for in the future.

Ganesh Natarajan
The author is deputy chairman and MD of Zensar Technologies and chairman of
Nasscom’s SME Forum for Western India

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