The NASSCOM rankings

October 10, 2007

NASSCOM Top 20 software and services exporters in FY 2006-07

Methodology for ranking
NASSCOM sends out a detailed Snap Survey questionnaire annually to all its member companies, accounting for 95 percent of the Indian IT software and BPO industry revenue. Information collated through the questionnaire includes: aggregate performance; service lines; verticals and geographies. The Snap Survey form also takes into account the contribution of the 100 percent owned overseas subsidiaries after deducting all the double accounting.

Rankings

Key highlights of the NASSCOM survey

1). Industry employee base estimated at nearly 1.6mn in FY07

  • Employment in the exports segment estimated at over 12,00,000 which translates into a year-on-year increase of ~34%
  • IT software and services added over 177,000
  • ITES-BPO added ~138,000
  • Indirect employment attributed to IT-ITES estimated to be 4x, translating to ~6mn additional jobs

2). Industry performance

  • Exports grew by over 33% – was the main factor in the industry performance exceeding expectations
  • Year marked by scope and scale expansion
  • India is an integral part of most major global sourcing strategies
  • Increasing traction in application management and infrastructure services
  • Strong growth in FAO demand; steady expansion in emerging service lines (legal, risk management)
  • Overseas M & A complementing organic growth

3). Market indicators support a positive outlook for global IT-BPO demand

  • Large unaddressed market potential for global sourcing
  • Continued momentum in new contract signings, renewals / restructuring
  • M & A activity in key client industries / PE activity to drive new opportunities; focus on mid-market
  • Concerns of US economic recession moderating, corporate performance and outlook is positive

4). India continues to maintain its distinctive lead as the destination of choice on parameters like talent suitability, maturity and business environment

  • 28% of the suitable talent available across all offshore locations
  • Outranks the next destination by a factor of 2.5
  • Broad service portfolio
  • Keen emphasis on security, quality
  • Leveraging the experience curve to derive gains from operational excellence
  • Rupee appreciation a concern

5). Six key focus areas for sustained leadership have been defined as

  • Enhance the talent pool advantage by focusing on soft skill development
  • Rapid growth in key business infrastructure strengthening -plan for emerging cities and aim for proactive regulatory reform to facilitate business in India
  • Operational excellence to be driven amongst industry players to ensure world leading benchmarks in performance in India based delivery model
  • Catalyzing domestic market development
  • Emphasis on quality and information security
  • Fostering an ecosystem to breed innovation

6). Projections for FY 2007-08 estimate overall software and services to grow by 24-27% to USD 49-50 bn

  • Lower growth rate masks the fact that incremental revenue of $10 bn is higher than ever before
  • Exports growth projected at 26-29%; IT software & services $28-29bn; ITES-BPO $10.5-11bn
  • Domestic market growth forecast at 20-22% with transportation, retail, hospitality to supplement strong demand in financial services & telecom

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