IT majors set to gain mkt share
Leadership changes, large deals to enable Cognizant, Infy, TCS enhance their market share in global IT outsourcing space
image for illustrative purpose
- Infosys is expected to win large deals
- Cognizant under new CEO a clear favourite for improving mkt share
- TCS has to overcome the leadership / organisational changes
- Global IT spending to grow 5.5% to $4.6 trn in 2023
- IT majors continue to win large deals above $100 mn
Bengaluru: Cognizant, Infosys and Tata Consultancy Services (TCS) are likely to improve their market shares in the global outsourcing market in the current financial year owing to leadership changes and bagging of large deals.
Industry experts are of the view that these companies have a track record of improving market share during market slowdowns in the past. Especially, Cognizant under the new CEO, Ravi Kumar is seen as a clear favourite for improving its market share after years of underperformance.
“With changing market conditions, there is always the potential for share changes. For example, we expect Cognizant to improve its positioning now as it has new leadership and can regain some of its lost ground. Historically, TCS, Infosys and Cognizant have been able to add share in difficult times. Cognizant looks well positioned to regain share with Ravi Kumar changing the focus and moral,” Peter Bendor- Samuel, CEO of global consultancy firm Everest Group, told Bizz Buzz.
With regard to TCS, he said that the company has to overcome the leadership changes and missteps caused by the organisational change to improve its share. Infosys on the other hand is expected to win large deals, one of the key pillars of improving revenue growth despite project ramp-downs.
According to global consultancy firm Gartner, the IT spending worldwide is projected to grow 5.5 per cent to reach $4.6 trillion in 2023. Despite strong growth projections in the IT services segment, Indian IT industry is not likely to clock strong growth as rating agency Crisil has projected it to grow around 10-12 per cent in FY24, a fall of 7-9 per cent from the previous fiscal.
No large-cap IT firm is likely to clock double-digit revenue growth in the current financial year. However, all domestic big firms including HCL Tech and Wipro have a strong deal pipeline and continue to win large deals worth $100 million and above.
Sources in the know said that vendor consolidation is the critical factor that is favouring large service providers. Usually, enterprises prefer to consolidate their IT operations with one vendor, giving it most of the work than distributing it among many players. This helps in saving costs and the current market has seen more cost takeout deals than digital ones.
Sources in the know has earlier told Bizz Buzz that companies are accelerating their sales efforts with regard to large deal teams in order to corner bigger share of outsourcing market.
With changing market conditions, there is always the potential for share changes. For example, we expect Cognizant to improve its positioning now as it has new leadership and can regain some of its lost ground. Historically, TCS, Infosys and Cognizant have been able to add share in difficult times
- Peter Bendor - Samuel, CEO, Everest Group, tells Bizz Buzz
