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TECH TALK: India’s Software Industry: Overview

February 11th, 2002 · No Comments

Software Services have been perhaps one of India’s biggest export successes in the past decade. Led by companies like TCS, Infosys, Wipro and Satyam, India’s software industry earned USD 6.2 billlion in the year ended March 2001. Growth for the current financial year is pegged at 30-35%, impressive given the turn of events and the global economic environment. This is, however, lower than the 50%+ growth rate the industry has been used to in the past few years. What are the challenges facing India’s software industry? In the words of a recent Business India cover story, “Can Software Shine Again?”

The advantages of India’s software industry are summarised by Business India (Jan 21-Feb 3, 2002):

According to a Forrester study conducted in November 2001, India’s IT strengths are:

  • the country’s decade-old experience in this area
  • fluency in English
  • supportive government policy infrastructure, and
  • high-quality offerings

This is amplified by a 1999 World Bank study, which says that India is the only country that figures in the high-quality-low-cost segment of the quality-cost matrix. An October 2001 survey by McKinsey indicated that the cost of doing offshore software development in India was almost 30-80% lower as compared to development in Europe and US.

India also has a talent base with enormous potential. It has the world’s second largest pool of English-speaking scientific manpower.

It churns out a huge number of engineers every year and the government aims to triple that number by 2008.

The tremendous growth (and potential) has helped companies like Infosys, Satyam and Wipro list on US stock exchanges. Fresh from its acquisition of CMC, TCS is considering an IPO in the coming year. All the leading Indian companies have strong management teams, a growing clientele and are cash-rich.

Here’s a look at the top 10 Indian software companies, ranked on 2000-01 export revenue (Rs 1 crore = USD 0.2 million, or USD 1 million = Rs 5 crore):

Rank Company Exports
(Rs, crore)
1 TCS 2870
2 Infosys 1853
3 Wipro 1756
4 Satyam 1241
5 HCL Technologies 1127
6 Cognizant 703
7 Silverline 647
8 NIIT 570
9 Pentasoft 555
10 Pentamedia 548
11 Patni Computers 516
12 IBM Global Services 506
13 Mahindra British Telecom 450
14 HCL Perot 439
15 DSQ Software 438

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