15 Surprising Facts About Indian Outsourcers - InformationWeek

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9/30/2014
09:06 AM
Shane O'Neill
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15 Surprising Facts About Indian Outsourcers

Thinking of outsourcing with Infosys, Wipro, or Tata? Here are some points worth knowing about the IT services heavyweights.

Over the past five years, the rapid revenue growth of Indian outsourcing firms has slowed due to the rise of cloud services, automation software, and non-technical factors like political unrest and the difficulty of obtaining visas.

Yet Indian outsourcers are still growing at a much higher rate than their Western counterparts (16% versus 0.5% between 2009 and 2012). Lower wages, a favorable rupee/dollar exchange, and a much larger pool of younger skilled programmers and engineers make it appealing to offshore certain IT workloads.

In IT infrastructure deals, India-based outsourcing providers are also competing more vigorously and beating out US-based providers more often, says David Rutchik, a partner at IT consulting firm Pace Harmon.

[Why are automakers better at outsourcing than IT? Read 4 Outsourcing Lessons IT Can Learn From Automakers.]

Major Indian providers such as Infosys, Wipro, and Tata Consultancy Services used to be "traditionally on the outside, used by necessity," says Rutchik, but they can compete now with IBM, CSC, and Hewlett-Packard by using technologies that allow remote management of data center monitoring, servers, and patching.

But before making the critical decision to ship off IT duties to India, ask yourself: How well do I really know these firms? Along with your own due diligence and vendor research, check out these 15 nuggets of information about Indian outsourcing giants Infosys, Wipro, and Tata Consultancy Services:

Infosys

  • Infosys is the third-largest India-based services company by 2013 revenues, according to Gartner, and the fifth-largest employer of H-1B visa workers in the United States in fiscal year 2013.
  • Infosys recently began moving some operations to the US. In 2012, the company opened its 18th office US office in Milwaukee. It hired 1,200 US employees in 2011 and an additional 2,000 US employees in 2012.
  • Infosys was ranked as the 18th-largest IT services provider in the world by HfS Research in its 2013 ranking, and was ranked number 19 among the world's most innovative companies in 2012 by Forbes.
  • In 2011, Infosys was accused by an employee of committing visa fraud by using B-1 visitor visas for work that required H-1B work visas. The case was dismissed in 2012, but it led to more investigations by the Department of Homeland Security and a federal grand jury. Ultimately in Oct. 2013, Infosys agreed to settle the civil suit with US authorities by paying $34 million, but the company refused to admit guilt.
  • On Aug. 1, 2014, former SAP technology chief Vishal Sikka took over from founder S.D. Shibulal as Infosys CEO and managing director. One of Sikka's first decisions as CEO was to approve thousands of promotions to improve morale and curb Infosys's rather high 2014 attrition rate of 19.5%. Sikka receives $5 million and stock options worth $2 million as annual compensation.

Wipro

  • As of March 2014, Wipro Ltd, headquartered in Bangalore, has 146,000 employees servicing over 900 large enterprise and Fortune 1000 companies in 61 countries.
  • Its market capitalization as of March 2014 was approximately $20.8 billion, making it the seventh-largest IT services company in the world.
  • Wipro provides IT services including systems integration, consulting, information systems outsourcing, IT-enabled services, and R&D services. Its services span financial services, retail, transportation, manufacturing, healthcare services, energy and utilities, technology, telecom, and media.
  • Wipro's long-standing founder and chairman, Azim Premji, 69, is the third-wealthiest Indian and the 61st richest man in the world, with a net worth of $16.4 billion in 2014, according to Forbes.
  • Wipro's global workforce consists of 98 nationalities working from 61 countries, and 8.5% of its workforce is non-Indian. The average age of a Wipro employee is 29 years old.

Tata Consultancy Services

  • TCS is the largest Indian company by market capitalization and is the largest India-based IT services company by 2013 revenues. It's the 10th-largest IT services provider in the world, measured by 2013 revenues.
  • TCS and its 59 subsidiaries provide IT-related services such as application development, business process outsourcing, capacity planning, consulting, enterprise software, hardware sizing, payment processing, software management, and technology education services.
  • As of March 2013, TCS had 199 offices in 44 countries and 124 delivery centers in 21 countries.
  • Tata Subsidiary TCS BPS (Business Process Services) is the third-largest India-based IT outsourcing company, with revenues of $1.44 billion in 2012-13, which was 12.5% of the total revenue for the entire company. TCS BPS has more than 45,000 employees serving 225 million customers across 11 countries.
  • In the fiscal year 2012-13, TCS hired 69,728 new staff, with 59,276 based in India and 10,452 based in other global locations. In 2012, the Tata group companies, including TCS, were the second-largest recipient of H-1B visas.

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Shane O'Neill is Managing Editor for InformationWeek. Prior to joining InformationWeek, he served in various roles at CIO.com, most notably as assistant managing editor and senior writer covering Microsoft. He has also been an editor and writer at eWeek and TechTarget. ... View Full Bio
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nasimson
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nasimson,
User Rank: Ninja
11/28/2014 | 10:28:59 AM
Re: mind boggling
@vbierschwale01:



I exactly did what you said - and what an eye opener it is.

The text at the top says:
When we buy steel bars for dollar 20 from England, then America has the rail and the England has the money.

When we buy steel bars for dollar 25 from America, then America has the rail and the money.

What a powerful analogy.
batye
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50%
batye,
User Rank: Ninja
10/1/2014 | 11:32:23 AM
Re: mind boggling
thank you, this days with speedy changes in technology, no one could really see the trends, or know what Co. future will be...
PedroGonzales
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PedroGonzales,
User Rank: Ninja
10/1/2014 | 9:56:20 AM
Re: mind boggling
@bateye.  I agree. It didn't take Indian companie a long time to become global IT super powers.  May be as a country we should try to imitate what these companies are doing right. Otherwise, our IBMs will be have a hard time to compete with them, may be they are having a hard time now.
vbierschwale01
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vbierschwale01,
User Rank: Strategist
10/1/2014 | 7:24:23 AM
Re: mind boggling
There is something that everybody seems to be missing.

Google Infosys investor relations and take a look at their last annual earnings report.

Only 2% of their revenue comes from India and the majority is from America.

Now go to Keep America At Work and click on "Where are the jobs" and click on the quantity link in the computer and mathematical row and drill down to your city after clicking on Infosys or any of these big companies.

Don't forget to look at the management quantity as well.

When you get down to the city that you live in, send me an email at [email protected] if the wages they are paying those people is not comparable to what your job used to pay.

This is their achilles heel.
batye
50%
50%
batye,
User Rank: Ninja
10/1/2014 | 12:42:47 AM
Re: mind boggling
@nasimson, same here, as this giants never look like giants to me... but now it global IT giants... 
nasimson
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50%
nasimson,
User Rank: Ninja
9/30/2014 | 12:03:42 PM
mind boggling
I knew that TCS, Vipro and InfoSys were Indian IT giants. Didnt know that these are global IT giants already. The stats are mind boggling. Seems like Indians are soon to overtake world IT. When your company's data is in cloud you dont know if its in kentucky, connecticut, chinnai or calcutta.
JakeL642
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JakeL642,
User Rank: Strategist
9/30/2014 | 11:23:29 AM
H-1b Gave a Monopoly based on Job Desctruction to the Offshore Outsourcing Companies
These Offshore Outsourcing companies have grown big because the H-1b Federal Government program allows them to use DISCRIMINATON AS A TOOL to replace US citizens, with H-1b-Trainees.

The better qualified, more experienced, US citizens are never given a chance to compete for the job, by taking a competitive pay-cut.

This effectively destroys the Free Market in the United States, and gives Offshore Outsourcing companies a complete monopoly on who gets hired and who gets fired.  They use that monopoly to create a larger IT monopoly offshore.

Let's face it, H-1b is a clear example of Government picking the winners and losers in the market place.  And every US TAX PAYER is the loser, because the high US unemployment has ballooned our Federal Deficits.

Other losers include, the half of all US STEM graduates that cannot find a job in a STEM field, after five years of looking.  You want to get ripped off, go pay 100,000$ for a STEM degree, that you'll never be able to use, thanks to the H-1b Federal Government program.

The simple fact is, unemploying U.S. citizens, as an ethnic class, is an extremely profitable business model that does nothing but feed the Offshore Outsourcing business.

H-1b is desirable because an H-1b worker is indentured to the sponsoring company.  U.S. citizens are constitutionally barred from indenturing themselves.

So the disenfranchised H-1b worker will never ask for a raise, comes and goes from the United States at the will of the employer.  If the H-1b is employed by an Offshore Outsourcing company (*most are), they will never get a Green Card.

If our nation's ethnic leaders are wondering why some people of color (blacks and hispanics) are finding it hard to break into tech (blacks and hispanics are 18% of all IT grads, yet less than 9% of all IT employees), it is because ALL OF THE STARTING JOBS are taken up by H-1b trainees.

The H-1b U.S. Federal Government Program is disproportianetely affecting certain people of color in the United States, more so than Asians and Whites.  And our leaders should be railing for reform of this program, because we all know that all the great tech leaders had to start somewhere. With these positions stolen using ethnic discrimination, we can expect a smaller group of leaders from our ethnic minorities in the United States in the future.

*Most is referring only to the capped (65,000) standard H-1bs.  (Surprize, some H-1b visas are not subject to a cap, who do you think bought that amendment?)
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