Yesterday i had written a post on the growing / large ambitions of Indian IT services firms, well today i came acorss this post at the Infoworld site on how the small players are getting "squeezed" out of the IT Services industry, What it looks like is without those large ambitions , plans & size companies are going to get out of the race.

Attached is a chart highlight the number of companies to revenue scenario in India, indicated in a previous post here.

Small and medium-size outsourcing companies in India are getting marginalized as customers look for larger outsourcers with big brands and strong financial results, according to Forrester Research.Staff too prefer to join larger Indian outsourcing companies, Sudin Apte, Forrester's senior analyst and country head for India, said on Friday. In a tight labor market, small and medium-size companies have to compete for staff with both large Indian outsourcers and the Indian operations of multinational services companies like IBM and Accenture.

The small and medium-size outsourcers have to differentiate to survive. These companies generally spread their limited staff and monetary resources too thinly among different services and lines of business, according to Apte. "They usually want to be mini-TCSs or mini-Wipros," he said.Small and medium-size companies are better off if they pick a few service lines, and vertical markets, and focus on creating domain expertise, Apte said. They also have to invest more in their marketing, and in processes offshore, besides investing in skills for negotiations, deal management, and customer engagement management, he added.

Source:1

Prashanth Rai