India's five largest IT services suppliers look set to double their market share in the UK by 2011.
This is according to Karen Geldenhuys, MD of Abacus Recruitment, who says research shows that Infosys, TCS, Wipro, HCL and Satyam are on track to boost their share of the UK's software and IT services market over the next three years from 3% to 7%.
"A 7% market share might not sound that big. But it is a big market. It was also reported in the UK-based online publication, www.contractorUK.co.uk that at least one of these software giants will breach the $1 billion-a-year revenue mark," says Geldenhuys.
"Despite a lot of conjecture about India losing its foothold as the leading software outsourcing destination of choice, it still has a lot of clout. Despite facing capacity problems – such as energy supply problems – they are still a force to be reckoned with. It is unlikely that they are going to tumble from the world rankings very far in the next decade – if at all."
The online publication reports that, in the last 18 months, UK companies including Carphone Warehouse, Skandia and DSG, have all committed to contracts with Indian IT suppliers worth over £100-million.
"Yet to continue to secure deals of this magnitude, the IT vendors must also tackle the steady erosion of their price advantage in light of rising domestic labour costs," says Nick Mayes, senior consultant at PAC.
"Low prices are no longer the only weapons in the armoury of the Indian services vendors, and they are winning business against Western suppliers on the quality and depth of their offerings," he adds.
Commenting further, Geldenhuys says these "market rumblings don't augur well for South Africa's brain drain."