Infosys or Accenture

What started out as a benign Y2K venture has mushroomed into a multi-billion dollar IT outsourcing industry over the last ten years. Unheard of players in the IT consulting space are today behemoths of the outsourcing/offshoring revolution. Today Infosys, TCS, WIPRO and Cognizant are the recognized brand names that epitomize the Indian outsourcing space.

And the established brands are paying acute attention to this phenomenon. Accenture, IBM, CSC and D&T have been aggressively trying to expand their Indian operations in response to this threat. The US consulting firms are seeking to extend their delivery capabilities by tapping into the Indian IT talent pool and offering competitive prices to their customers. The big advantage the Indian outsourcers have had is price and now the US firms are trying to level the playing field.

But the Indian firms are also expanding oversees. Recently WIPRO announced plans to establish a software delivery center in Atlanta, GA which will eventually house more than 200 software engineers. There are plans to setup more such centers. Infosys has been hiring US IT graduates and after training them in India – placing them on US assignments. The Indian firms are offering a broader service portfolio and by emphasizing a global brand – they are trying to move up the value chain.

So what does the future entail? As the IT outsourcing/offshoring market matures there is bound to be changes in terms of consolidation, specialization, niche offering and possible extinction. With years of experience playing the US IT market the Accentures and IBMs have the credibility and management expertise to be effective global outsourcers. But it’s hard to discount the Indian firms either since they have built their business model by capitalizing on technology, cost and efficiency – valuable commodities for most cost conscious CIOs .

One thing is for sure – the IT consulting space will look a lot different in 5 years. Bet carefully!