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