India - Biggest IT Consultancy Service Provider

In the past decade, India's IT industry emerged as an important player in this global market. While worldwide IT services revenue increased less than 2 percent from 2000 to 2003, India's IT services industry experienced a 22 percent revenue growth - a pace comparable to the rise in Hong Kong's electronics industry during the 1970s.

India now is being acknowledged the world over as an important base for the growth and development of the industry. The push for increased IT spending is being led by the Indian government itself, and IT spending is predicted to touch 2.5% of GDP by 2008.

India's main competitive advantage in the industry is its enormous and high quality pool of human resources. Indian software professionals, besides being extremely cost-effective and having a good standard of English, have the experience of developing systems and applications of international quality and at world-class levels of productivity.

India has also become the most widely accepted destination not only for software outsourcing, but also for of several other types like business and knowledge etc. A recent study has found out that more than 40 percent of software development and other types of services are being outsourced to India. In other words, India is the most preferred country for outsourcing of any kind including IT consultancy.

Hence, within most IT areas and disciplines the world’s highest competence levels can be found in India. This can be seen, by looking at the IT quality certification “SEI-CMM Level 5”, which is the hardest certification to obtain in the IT industry. Worldwide there are only 52 companies, which have that certification – 43 of these have an entity in India. All in all the Indian IT service industry is only second to that of the US.

As per the NASSCOM survey, the Indian IT Service industry has recorded 33-per cent growth in exports, clocking revenues of US$23.6 billion in FY 2005-06, as compared with export revenues of US$17.7 billion in FY 2004-05. FY 2005-06 also saw the overall Indian IT industry (including domestic market) growing by 31 per cent registering revenues of US$29.6 billion, up from US$22.5 billion in 2004-05. The IT companies are hiring people like there is no tomorrow. The top Indian IT-services firms – Tata Consultancy Services (TCS), Infosys and Wipro – are each recruiting more than 1,000 people a month.

By 2008, says NASSCOM, annual sales are likely to surpass $50 billion. The Indian IT consultancy market is bound to grow a lot bigger than it is now. In fact, the size of the Indian IT Consultancy market now is only a small fraction of what it has the potential to become.

Software Services in India

India’s software services industry is one of the world’s most successful information technology industries. Begun in 1974, it employed 345,000 persons and by the end of 2004 had earned revenue worth $12.2 billion, equal to 3.3% of global software services spending.

According to a recent study by Forrester, India will continue to grow its software industry in scale, scope, and value added and it’s edge over other competing nations in the area of software development and IT outsourcing business comes from the country’s decade old experience in this area, fluency in the English language, supportive government policy infrastructure and high quality offerings.

India has also become the most widely accepted destination not only for software outsourcing, but also for outsourcing of several other types like business and knowledge etc. A recent study has found out that more than 40 percent of software development and other types of services are being outsourced to India. In other words, India is the most preferred country for outsourcing of any kind.

The primary focus of the Indian software industry has been export – sometimes in corporation with foreign companies who are established in India as a subsidiary. The main reason for the foreign companies to establish themselves in India is still the low cost of labor coupled with a highly educated workforce. The Indian IT/software service industry spans from huge world-renowned Indian companies like Infosys,Tata Consulting Services (TCS), Wipro etc. who are almost in the same league as international companies such as IBM, Sun Microsystems, Oracle, Microsoft, Dell etc. who are also present in India, to a host of small startups.

Talking of the India's software development and services industry its exports were estimated to grow by 32.6 percent to over $31 billion in the current fiscal year to March 31, according to data released by the National Association of Software and Service Companies (Nasscom).

IT services including software development were expected to contribute $18 billion to exports in the current year to March 31, while business process outsourcing (BPO) and call centers are likely to contribute another $8.3 billion, according to Nasscom in Delhi. Engineering services, research and development (R&D) services, and product development work are expected to contribute a further $5.0 billion.

Software Leasing

With information technology’s continuous change in today’s current business scenario, software has become as vital of an investment as hardware. As software prices are increasing with the advancing technologies, an old approach is fast gaining momentum, as the way to purchasing business applications. It's the concept of software as a service (SaaS), where a company leases or rents instead of buying business applications outright.

Software leasing can be equated to a loan for purchases that consist of 100% software or possibly software combined with training, installation or other products and services. Software leasing is a smart and flexible solution to obtain costly software. Not only does software leasing offer the same benefits as traditional leasing, clients also have access, and can utilize the most modern software development solutions available in the market.

Primarily, software leasing services involves the user/client, who has to make payments as a monthly fee and is most commonly issued under a capital lease, in which the lease term is 75% of the property’s estimated economic life. Under a software lease, individual parts such as the software licenses or even customization packages are available.

Software leasing is enabling companies to be more flexible, as it helps them to spread payments out over the term of the lease rather than have a large up-front cost to purchase outright. Software leasing is also a handy resource for software development companies that may not require a specific software for a longer term. Another feature that stands out is, a company can upgrade to newer version of the software during the lease period.

Software leasing also offers some key business benefits such as reduction in total cost of ownership, conservation of capital, preservation of existing credit lines and protection against obsolescence.