Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
IT Consulting: The unpenetrated market - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Mar 19, 2007

    IT Consulting: The unpenetrated market

    Many of the top Indian IT firms are focusing on IT consulting services during the last few years. With a market size of around US$ 50 bn, it is still one of the most unpenetrated segment in the Indian IT market. Through this article, we try to look into the IT consulting market and what opportunities it offers to the Indian IT majors.

    What is IT Consulting?

    IT consulting is a service that focuses on advising companies on how to use information technology in the best possible way to meet the business objectives. IT consulting, in addition to advising, also includes implementation, deployment and administering the IT systems on behalf of the company.

    Major players in India and across the globe

    In India the companies, which are offering services in IT consulting includes iGate, Infosys, Satyam, TCS and Wipro. Global majors include IBM, Accenture, Affiliated Computer Services, Unisys, Cognizant and Hewlett Packard.

    Indian IT companies in consulting

    IT consulting is a specialised job and requires skilled manpower/consultants. Gone are those days when the Indian IT companies can boast of plentiful and cheap manpower. Indian IT industry is facing a severe crunch of talented and skilled professional required for these types of jobs. For the IT companies to move up the value chain, they have to focus on high-end value creating services rather than sticking to the low-end tasks of application development and maintenance.

    Consulting revenue as a % of total revenue
    Name of the company % of revenue How the service is rendered
    Satyam Computer Services Limited 5%

    Satyam renders its IT consulting through the UK based Citisoft Plc., which it acquired during FY06. Citisoft specialises in business and system consulting and has offices in London and Boston and a wholly owned subsidiary Citisoft Inc. in the US.

    Infosys Technologies Limited 4%

    Infosys has its separate wholly owned subsidiary named Infosys Consulting Inc., which the company established in April 2004 and services around 55 clients in the US. Investment as on 31st March 2006 in Infosys Consulting Inc was US$ 17 m.

    Tata Consultancy Services 3%

    To expand into the consulting domain, TCS acquired FNS, a banking product company in Australia.

    Wipro Limited 1%

    Wipro, as of now, does not have a separate entity for its consulting business. However, in May 2006, it acquired a Europe based retail solution provider (Enabler) that specialises in consulting and implementation of integrated solutions and effective support of retail system.

    Challenges from global players
    Indian IT bellwethers are relatively new in the business of IT consulting whereas their global counterparts like IBM, HP, Unisys and Accenture derive a greater chunk of their revenues from the consulting business. They have been around in this business for a very long time and possess the required expertise in this field, which is the key to success in this business. While this in itself poses a serious challenge to Indian IT companies that are trying to penetrate deeper into the consulting domain, non-availability of skilled consultants in future might also hurt prospects.



    Equitymaster requests your view! Post a comment on "IT Consulting: The unpenetrated market". Click here!


    More Views on News

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    Ankit Shah's First Five Insider Recommendations (The 5 Minute Wrapup)

    Aug 5, 2017

    How to get exclusive insider recommendations from Ankit Shah.

    TCS: Currency Volatility Plays Spoilsport (Quarterly Results Update - Detailed)

    Jul 14, 2017

    TCS starts FY18 decently despite an adverse currency impact.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE IT

    Aug 17, 2017 03:37 PM