Indian IT companies will storm the UK market this year

Nicola Brittain, Computing, Friday 30 April 2010 at 12:55:00

Other key trends for the market will include output based pricing and the
industrialisation of service

Despite a a UK IT services market decline of 4 per cent last year, when
inflation is considered, the seven Indian companies in the market saw combined
growth of five per cent.

During a webinar looking at key trends within the UK IT market, hosted by
analysts
TechmarketView and
PAC, Techmarketview?s Managing Partner Anthony Miller argued that will enormous
cuts to take place in the public sector, and a new openness to offshoring
services, the Indian?s share of the systems integration market will continue to
rise.

The Indian players, including TCS, Infosys, Cognizant, Wipro, HCL and Satyam
provided services worth a combined �2.4bn in 2009.

All are expecting good growth for 2010 including forecasts from Cognizant of
20 per cent growth with Infosys predicting growth of between 16 and 18 per cent.

Other non-Indian companies in the market, excepting IBM and Capital have flat
forecasts for 2010, with those that make least use of outsourcing or offshoring
likely to fare worst throughout 2010.

Public sector trends

The public sector was a relative safe-haven for UK IT professionals last year
with growth for IT suppliers ATOS and Logica as a result of government deals.
However, the general election has stalled decision making, with only one quarter
of the money spent on deals made in the first quarter 2010 by comparison with
that of 2009.

Miller explained that further deals might not be struck for some time: ?How
quickly the new government will begin signing deals with the IT suppliers after
the election will depend on whether they want to engage with third parties (IT
suppliers) to help them scale down head counts, or whether they will make these
decisions before they engage with external suppliers.?

Additionally, Miller argued that the government is increasingly open to new
ideas from the continent around citizen data management and improving customer
services, which is good news for traditional suppliers to continental
governments.

CIO trends

The webinar also looked at key trends for CIOs, these include increased
pressure to get value for money. This will see CIO?s industrialising service
delivery by using lower skilled and less labour as labour is replaced by
technology. They will also look offshore for more services and move towards
output-based pricing of IT services.

Miller said: ?Output based pricing can be very tough for suppliers who must
put a lot of work into understanding an organisation before it can even pitch.?

CIOs will also be looking to respond rapidly to business needs, and many will
look to do so by adopting cloud computing.

However, Miller argued that ?cloud computing? is often not what it seems.

?Cloud computing is often just the repackaging of existing services from
suppliers, one of the problems is that there is not industry definition of what
it actually is ? in many cases a public cloud is just the provision of
virtualisation with a few additional services,? he said.

CIOs will also be looking to have more control over the business. This tends
to take the form of IT transformation projects, which require partnership or
significant consultation with specialists, and there aren?t many of these
according to Miller. However he says: ?Watch out for the Indian players in this
field, they embarked on several transformation programmes in the retail and
manufacturing sectors last year and are likely to move into the public sector
following a partnership deal with Cardiff council in November last year.?

Finally, CIOs will be looking to ensure that a business has the correct
security governance, risk management and compliance as security threats increase
and new standards such as the PCI-DSS credit card standard are enforced.

Full story at http://www.computing.co.uk/computing/news/2262321/indian-companies-continue