You are here: Home » Technology » News » Apps
Business Standard

Foreign IT firms growing fastest in India

Leslie D'Monte  |  Mumbai 

For many like IBM it's where they have the biggest staff and are getting the big returns.

India is among the fastest-growing markets for a majority of leading information (IT) multinationals (MNCs). Most MNCs do not discuss India figures - except for Dell and IBM.

However, industry estimates peg the turnover of MNCs like Dell, Intel, Microsoft and IBM at much over the half-billion dollar mark. Firms like Cisco are said to have crossed the billion-dollar mark in domestic sales in 2006-07, and a player like HP India is estimated to have an India turnover that is around $2.5 billion.

"We have beefed up our strategy to cater to the mid-market segment which is booming. India is one of the fastest-growing markets for us. Our growth rates range between 40 and 45 per cent, nearly double that of the industry," said Nitin Chaudhry, director, commercial business (PSG), Hewlett-Packard India.
"The low adoption of IT in the mid-market segment, low penetration of computers in households and institutions and e-governance initiatives are helping all our business divisions - personal systems (which accounts for about 50 per cent of its revenue in India), imaging and printing and solutions group - to grow rapidly."


HP 9,500
IBM 2,800
CISCO 4,200
DELL 2,400
LENOVO 2,600
Indian ITs left behind Indian IT service providers, however, are lagging on this score.
Tata Consultancy Services (TCS) is the only player to come anywhere close, with its domestic turnover (including revenues of CMC) totalling a little over $600 million.
Indian MNCs have a strong focus on small and medium enterprises (SMEs or the mid-market segment), e-governance projects, and a full suite of offerings (from hardware, software, systems integration and maintenance) which has helped them post growth rates of 25-50 per cent year-on-year.
Big deals
Players like IBM (with about 53,000 employees in India) are strong in the space.
A couple of days back, IBM India signed a $600 billion, five-year outsourcing agreement with Vodafone Essar. It is already working with Bharti Enterprises and Idea, and has entered into big deals with other Indian corporates as well. Its revenues from these deals have crossed the $2 billion-mark.
The management plans to invest $6 billion in India over the next three years.
It hardly came as a surprise, then, that IBM Vice-President (Financial Management) Jesse Green told the media recently: "We expect our revenues (in India) to reach $1 billion by the end of this calendar year, up from $700 million in 2006, driven by strong factors."
Getting aggressive
"With a US slowdown round the corner and a depreciating dollar, US tech firms are likely to push for export-led growth for earnings. Hence, the Indian market is emerging as a hot spot growth area," says Alok Shende, head (IT & Telecom), Ovum India.
The aggression to grab more market share is showing. Microsoft India now reports directly to the company's headquarters in Redmond. It is the only subsidiary outside the US where Microsoft has an end-to-end presence through six business units.
The company, with an estimated turnover of over Rs 3,000 crore, has reworked its price strategy and is localising its offerings. Its Windows operating system (OS) "" XP and now Vista - still has over 90 per cent market share and is a leading player in the server OS segment, too.
More examples
India has also become the fastest growing market for the $57 billion IT firm Dell. In its third quarter of financial year 2008, the company posted 47 per cent growth in revenues, as compared with 22 per cent in China. Its India turnover stands at around $600 million (Rs 2,400 crore). India is also Dell's largest employee base (13,000 employees) outside of the United States.
India is also an important market for Cisco where it has already committed $1.1 billion. It will be launching a huge brand re-positioning campaign in the first quarter of CY2008. Cisco's IP phones have already hit the Indian market with over 200,000 sold over the last few years.
Intel India is banking on the mobility boom (laptops, mobiles), gaming, SMEs, e-governance, education initiatives and low-cost computing initiatives in India. It is also banking on its WiMax forays in the country.
For Lenovo, India is the only PC market, other than China, that contributes around eight per cent of its revenue in the APAC region.
The IBM legacy has helped in brand recall "" especially for the 'Think Pads'. Oracle India, on its part, controls about two-thirds of the domestic database market and is strong in the e-governance area.
Nortel, on the other hand, has bagged multi-million dollar deals to provide solutions to Indian airports and metro-ethernet solutions to the Indian Railways.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, December 13 2007. 00:00 IST