Indian IT contracts except at Infy and TCS were never the largest shares of outsourcing rlelationship in the IT Services market and having enjoyed 4-5 yearso of success growing share of outsourcing at the top , have now landed hard on their nose with larger relationshipps being destroyed by smaller fragmented share at most signings. 

A clear example of a banking and financial services customer, with seeming commitment to outsourcing, both Deutsche Bank and Citi employ questionable division of labor by enforcin gof contract and without, to divide work to their partners to ry and ensure the one best served for the customer bank unit e.g. derivatives is quickly balanced by a rival provider. DB sold its outsourcing ready IT unit to HCL Tech then ramped its service relationships with TCS by awardin gthe latter a large outsourcing relationship. Even such cases are going to become rare and thse customers retain pride of place among outsourcers as new customers are more than satisfied with the offshore presence of a IBM or a n Accenture, both increasingly losing their share of $200 MM per annum consulting accounts replaced by offshore delivery heavy accounts and at the expense of probable market share gains of Indian IT from earlier.

MindTree's first INR 5 bln quarter ( if it maintains 5-6% QOQ growth will probably signal just that. Its recent headwinds apart, both MindTree and Happiest minds again tackle the same fragiule IT delivery ecosystems 10 years ago in Java to now the cloud and IMS where server farms in Brazil and the relative unlikelihood to move beyond level I Service helpdesk limit growth in the large data center accounts dotting the US and Europe landscape. Admittedly, the world outside these two continents is growing but the IT deliveery is already concentrated out of these two continents and the new architecture usually slimmer and without that much of an outsourcing leg as the legacy systems or the larger bans and consultants who again are not looking for growing any fresh relationships.

The number of relationships allowing a MindTree more than even 5% of their outsourcing ofr to KPIT for that matter is unlikely to be more than none to one % of the client/prospect/suspect universe out there. Consulting led growth wth local hiring has probably a 5% probability of bettering these chances. Whither Indian IT then? Nether. , the existing legacy business of INR 750 bln unlikely to go anywhere for the next decade or two and with the rupoee steadily losing value, an incentive for standing still in dollar terms as quality vendors like india's Top 5 and Cognizant pass on the depreciation gains oto customers. 

Posted via email from The India Investment Post