Chinese versus Indian IT service providers
August 5, 2009
Indian service providers continue to mature and this helps them to penetrate the continental European market after having captured large parts of the IT service cake within the United States and UK. Where some American contracts state the scope as “ hiring 50 IT employees performing network management”, demand many European companies a more ‘functional blackbox’ kind of service. Instead of hiring a couple of network engineers to do the work a typical client of mine (I’m Dutch) would require ’100Mb network bandwidth to desktops with a response time of X and an availability of Y for price $$ per connection’. This latter one requires a more sophisticated service delivery model and is more in line with the in Europe widely adopted ITIL methodology.
While there are still some IT contracts signed using a resource-based delivery model, are also American and English companies moving to a model using service descriptions and accompanying service levels. The experience Indian companies gained with transforming their internal processes and capabilities give them a much needed head start. Because China is coming.
Where the Indian companies grow and mature in a more natural and organic way does China things differently. There are still very strong ties between the Chinese government and the corporations and if the central governments decrees: we want to become a serious destination for IT or BPO services, I believe that Indian service providers have something to be seriously worried about.
Here China can also play out one of its ‘advantages’ over India: it is not a democracy and if China puts its might behind something (and a couple of billions of its reserves) things could get ugly fast for the traditional ITO and BPO destinations in India. Of course does India (and many other countries) have a huge advantage in terms of language skills and experience, but China always plays for the long run. They do not think in one or two years, but in ten or twenty years.
That China is also starting to probe into the service market is demonstrated by China’s Neusoft which entered the group over performers of Black Book’s 2009 survey. So China is already getting slowly into the market traditionally dominated by India and a few others, but I wonder what will happen when China starts to align its education, infrastructure etc with the aim to become a service industry. I believe the board members of TCS and Wipro have then really something to worry about (instead of the tax ideas from Obama).
You can read some more about the differences between India and China here and here.
Comments
3 Responses to “Chinese versus Indian IT service providers”
Got something to say?
-
Advertisements
Text Links
All the major Indian outsource vendors have opened offices in China and in other countries. As the competition heats up I’m sure China will take some market share from Indian outsource vendors, but I’m not sure if China can over take India in ITO and BPO market.
Good information, I think Chinese outsource vendors will dominate in Japanese and Korean market due to language and cultural closeness. I do not think they can compete with Indian outsource vendors for US and UK market. I’m not sure if there is any publicly traded Chinese outsource companies exist today.
-Amit
Good info in the blog