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Top Indian IT companies rated ‘positive’

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CIOL Bureau
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PUNE: Gartner has rated Tata Consultancy Services (TCS), Infosys Technologies, Wipro Technologies and Cognizant Technology Solutions as `positive' overall, its second highest rating in its offshore vendor-rating grid. Among these, TCS, the company with the largest revenue base among Indian service providers, has been tipped as a leading contender to join the ranks of the large global external service providers.





This is the first comprehensive rating grid of the top nine Indian offshore service providers, who have been assessed in five evaluation levels across 14 parameters. "This is a tremendous rating for the companies who have around $ 10 billion revenues. This reveals that these companies have achieved a competitive positioning vis a vis the global market, " Gartner India VP Partha Iyengar said at a press conference held in Pune.





The remaining five companies Satyam Computer Services, HCL Technologies, Patni Computer Systems, Syntel and Covansys Corporation have been rated as `promising' overall. "The rating aims to dispel the myth that evaluating vendors on their financial strength and the size of orders alone is sufficient. The grid ratings focus on the vendor as a whole, not just the position within a single market or based on a few select criteria," he explained.





Iyengar said that although India was the undisputed leader today, there were still issues related to brand management and positioning that need to be tackled. These ratings are meant to provide the end-user organizations a holistic view of the vendors from which they are purchasing products and services, financial investors with an independent and complete view of a vendor's strengths, challenges and vendors with a total view of their potential partners, competitors and suppliers. The ratings provide a clear indicator of each vendor’s overall status of initiatives such as strategy, organization, organization, product, technology, marketing, financials and support.





According to Iyengar, enterprise buyers are now demanding that IT service providers (IT SPs) offer a range of global alternatives, including onsite, domestic, nearshore and offshore capabilities. In 2002, Gartner had mentioned that by 2004, more than 80 percent of the US executive boards will have discussed offshore sourcing. And more than 40 percent of the US enterprises will have completed some type of pilot or will be sourcing IT services through a global delivery model, such as nearshore and offshore (0.7 probability).





Despite economic and geopolitical uncertainties, offshore IT service providers are the dominant offshore vendors with regard to exporting IT services to the US enterprise buyers and software companies. Indian IT service providers account for an estimated $10 billion of IT services delivered in 2002.



"Using Gartner's Vendor Ratings process, we analyzed a select group of ESPs that have significant resources in India, and that deliver IT services to customers in the US and Europe," he said.





"Offshore outsourcing is the world's fastest growing delivery model and it is critical that Indian vendors develop capabilities that allow them to compete in international markets," Iyengar said. He also adds that the vendor evaluation grid will allow both the vendors and the customers to determine as to, who is most likely to succeed as a `global player' in the long term offshore service scenario.





The positive rating given by Gartner to the four companies implies that these companies have demonstrated their strength in certain areas, but these are largely opportunistic. For customers, the global research firm has advised continuing incremental investments while potential customers have been advised to put these vendors on a short list of tactical alternatives.





The promising rating signifies that the companies have shown potential in specific areas, however the initiative or the vendor has not fully evolved or matured. Customers have been advised to watch for a change in status and consider scenarios for short term and long-term impact. Suggestions for potential customers include planning for and being aware of issues and opportunities related to the evolution and maturity of this initiative or the vendor.





Compiled over a period of six months, the report states that Cognizant Technology Solutions has delivered consistent financial results through good execution. It must differentiate from its Indian top-tier competitors and break out of commodity-based pricing.





Covansys has been rated as promising. Covansys' challenge for growth is to clearly articulate the benefits of this value proposition and compete with leading companies in India and the US for the emergence of global options for end-user buyers.





Infosys Technologies that has been ranked positive overall, has established itself as a top vendor among its peer group in India, however competition beyond Indian IT services provider is formidable. To move to the next level, Infosys must harness its ambitions to focus on managed growth, the report stated.





Patni Computer Systems has been rated as promising. According to the Gartner report, Patni clients report solid performance. Yet, while Patni is known in India, it is not well known among the US and European buyers. Patni needs to increase its brand equity. It also needs to differentiate itself from its peer group in India.





Satyam Computer Services rated as promising, needs to differentiate itself and expand its offerings to offer higher value-added service categories.





Syntel, a hybrid US- headquartered IT professional service company, with investments and capacity in the US and India, needs to articulate the benefits of this value proposition and compete with leading Indian and U.S. companies.

While Wipro Technologies, which has established itself as one of the leaders among Indian IT service providers, along with a select group of its competitors faces the challenge to differentiate itself and move beyond commodity selling.

HCL Technologies, rated as `promising’ is amongst the larger IT service companies in India. Its growth has been predominately through its technology-led software engineering work, the report said.





(CNS)

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