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  • 1. Making Leaders Successful Every Day June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors by Sudin Apte for Sourcing & Vendor Management Professionals
  • 2. © 2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com. For Sourcing & Vendor Management Professionals Executive Summary While almost the entire tech industry struggled with the recession, many offshore players remained upbeat as they continued growing and in fact increased profitability. Our research shows that new work that is currently coming offshore and that will come offshore in the future will be substantially different in terms of complexity, nature of work, deal and pricing models, and the way it will be delivered to the clients. To cope with this new IT services reality the top five Indian providers recently retooled their strategy. Our analysis, however, shows that most parts of their strategies are similar in nature. Age-old offshore advantages (low cost, labor availability, and quality) are quickly commoditizing, so sourcing professionals should focus on how these players execute their strategy, and more importantly, watch how they are engaging with the clients to deliver the next level of value. table of Contents The Top Indian Companies Weathered The Recession Successfully Offshore Leaders See Opportunities In New Market Segments The Top Five Indians’Strategy Showdown How Do The Top Offshore Firms Rank On Emerging Success Criteria? Recommendations Validate That Your Provider Can Deliver Business-Aligned Services NOTES & RESOURCES Forrester interviewed and/or studied the top five Indian vendors including Cognizant, HCL Technologies, Infosys, Tata Consultancy Services, and Wipro, and spoke with more than a dozen user companies that use these providers. Related Research Documents “Accenture, Cognizant, And Infosys Boost R&D Services Competition” February 8, 2010 “US And Global IT Market Outlook: Q4 2009” January 11, 2010 June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors Will The Indian Big Five Deliver Business Value Post Recession? by Sudin Apte with Christine Ferrusi Ross and Philipp Karcher 2 4 5 7 10
  • 3. © 2010, Forrester Research, Inc. Reproduction ProhibitedJune 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 2 The TOP INDIAN COMPANIES weathered THE RECESSION successfully As a result of the recession, most clients cut their IT spending, which in turn caused the global tech industry to shrink in size. However, the situation in the Indian IT industry was quite different. While the offshore firms felt the brunt of the economic meltdown, it was less severe when compared with many top tech companies, and it was also mild compared with many other IT service providers. As offshore projects were not the first thing that most clients cut, Indian companies got some time to plan for the downturn and could take steps to mitigate the risks of the recession’s fallout. While several small and midsize Indian companies lost revenue when they picked up business at reduced profitability, or even at a loss in few instances, the top five Indians — Cognizant, HCL Technologies, Infosys, Tata Consultancy Services (TCS), and Wipro — demonstrated continued growth even at the peak of the recession. In fact: · The top five firms reported positive revenue growth when the economy shrunk. In the Indian financial year ending March 31, 2009 — which included the early part of the recession — these top five companies grew by more than 20% in size. Even in the subsequent fiscal year (ending March 31, 2010) — which also included the recession — these companies continued to see an increase in revenues. While the past 12 months have been difficult, and during the two quarters from April 2009 to September 2009 some of these firms had a drop in revenue compared with preceding quarters, overall these leading Indian providers closed the quarter ending on December 31, 2009 on a positive note — and expect to close the full year with a moderate growth of 2% to 10%. Cognizant, however, continues to record much higher growth and is expected to grow by 15% to 20% in this accounting period (see Figure 1).1 · Thanks to stringent cost cutting, these firms improved profitability. To beat the recession, most Indian firms — like every other firm worldwide — took serious measures to cut their costs. They cut their salary bills by reducing (or even removing for a period) the variable pay, and as attrition was at a record low, recruitment costs and annual raises were flat or reduced by 5% to 7%. Some firms even reduced their headcount or asked employees to take a salary cut. Other cost-cutting measures included reducing marketing spend, cutting long-term R&D and intellectual property (IP) investments, stalling the start of new development centers or GDM investments, and slashing overhead. Systematic budget cuts companywide coupled with tight approval mechanisms helped these companies to cut their costs by double-digit percentages. However, while costs were down significantly, they offered only a 4% to 6% discount to their clients. The result? The top five firms actually increased their profitability in the past 12 months (see Figure 2). · The firms adopted new pricing and engagement models. In addition to cutting costs, the smart providers also moved their clients from traditional time-and-materials pricing (T&M) to fixed prices wherever possible. They also encouraged their clients to move to new engagement models like managed services or platform-based service delivery. An analysis of operating metrics of these top five firms show a shift of 6% to 8% from labor-based T&M pricing to fixed
  • 4. © 2010, Forrester Research, Inc. Reproduction Prohibited June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 3 prices, and in addition, each of these service providers told Forrester that they now generate around 5% to 6% revenue via new engagement models. These companies also reported that their clients are rapidly adopting these highly industrialized, shared risk-reward-based, domain IP- driven engagement models to derive the next level of benefit (see Figure 3). Figure 1 The Top Indians Continued To Grow Even During The Recession Source: Forrester Research, Inc.56214 Revenues for the 12 months ended March 20101-2 The quarter ended March 2010 showed signs of recovery1-1 Source: Quarterly reports from the companies Cognizant HCL Infosys TCS Wipro Revenue for the quarter ended March 2010 (USD millions) Year-over-year growth $960 29% $685 21% $1,296 16% $1,686 18% $1,114 11% Cognizant HCL Infosys TCS Wipro Revenue for the 12 months ended March 2010 (USD millions) Year-over-year growth $3,493 $2,574 $4,804 $6,340 $4,391 20% 24% 3% 5% 2% Note: For financials published only in rupees, a conversion rate of 1 USD = 45.11 INR was applied. Source: Quarterly and annual reports from the companies Note: For financials published only in rupees, a conversion rate of 1 USD = 45.11 INR was applied. Figure 2 The Top Offshore Providers Made More Money During The Recession Source: Forrester Research, Inc.56214 Source: Quarterly reports from the companies Cognizant HCL Infosys TCS Wipro Net profit (USD millions) Net profit as a % of revenue % increase in net profit $152 34% $77 78% $349 9% $420 60% $287 17% 16% 11% 27% 25% 26% Note: For financials published only in rupees, a conversion rate of 1 USD = 45.11 INR was applied. Financials for the quarter ended March 2010, compared to the same quarter in 2009
  • 5. © 2010, Forrester Research, Inc. Reproduction ProhibitedJune 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 4 Figure 3 The Components Of Emerging IT Services Source: Forrester Research, Inc.56214 • Lower labor costs • Offshore scale and resource availability • Technology skills, software engineering • High quality standards and certifications like CMMI 5 • Process superiority, methodologies, and initiatives like Six Sigma • Productivity improvement measures like Lean and factory approach • Horizontal services lines capabilities: ADM, enterprise apps, testing, infrastructure • Limited industry vertical process knowledge • Harnessing new and emerging technologies like Web 2.0, green, pervasive • Deep industry vertical/business process knowledge • Developing new engagement and pricing models • Building global delivery including nearshore and onshore scale • Creating industry solutions and intellectual property (IP) strategy • Showcasing strong thought leadership and management depth • Sales, marketing, and value articulation or differentiation capability Traditional value proposition of offshore providers Next-gen IT services success criteria The new offshore IT services value proposition OFFSHORE LEADERS SEE OPPORTUNITIES IN NEW MARKET SEGMENTS During the height of the recession, most companies across North America and Europe cut their spending by more than 10%. In many situations, Forrester saw projects and deals get cancelled. In contrast, Forrester’s latest survey data anticipates growth in IT spend in 2010 and 2011.2 The offshore leaders that held their revenues and grew marginally in the toughest times will surely show higher growth in the coming two to three years. In fact, while announcing quarterly earnings recently, two of the five providers raised their guidance and gave indications of 4% to 5% sequential (quarter-over-quarter) growth. Our interactions with executives of these firms indicate that they anticipate double-digit growth in 2011 and possibly higher than that, with several providers even crossing 20%. While a steep drop in rates put pressure on offshore projects, mild cost pressures and small budget drops actually accelerates offshoring as clients view sending work to locations like India as a way to cut costs. Our research during the past two recessions confirms such acceleration during the later stages. We see many new offshore markets opening to complement this growth. For example, midsize North American companies as well as Continental European clients face globalization and competitive pressures from companies from developing economies and see offshoring as a way to fight that difficulty. The new offshore buyers, often less mature tech users, will take the safe bet and sign up with the top established offshore brands. For example, our more than two dozen interactions with Continental companies show their inclination to work with top Indians like
  • 6. © 2010, Forrester Research, Inc. Reproduction Prohibited June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 5 Infosys and TCS. While their suitability and interest to bid for first-time offshore users is debatable, the top Indians are seeing a large number of incoming leads as the popularity of offshoring grows beyond Fortune 500 companies. The TOP FIVE INDIANS’STRATEGY SHOWDOWN To understand how these firms are preparing to win in the post-recession world and compete against each other as well as their global competition, Forrester interviewed the CEOs and members of the senior management teams at Cognizant, HCL Technologies, Infosys, and Wipro. During the approximately 120- to 150-minute interactions, each IT services firm talked about their respective strategies and how they plan to prosper post recession. Forrester also reviewed the financial and operating data of these companies and reviewed a strategy presentation made by TCS at its recent industry analyst day. Among the providers: · Cognizant leverages client references to grow faster than the pack. To understand the market, Cognizant approached its top clients systematically to understand their changing requirements and business issues. Then the top 30 executives in the company got into a huddle — a process repeated periodically — to discuss how the firm can remain highly relevant to their clients who are looking for not only cost cutting, but also business value and innovation. The company then took a bold step and increased its spend in a tough economy on activities such as R&D and innovation, account management, building new offerings and solutions, and continued recruiting at the senior and middle management level when arguably many other firms were cutting their budgets. Cognizant also planned to expand its technology capabilities by strengthening its service lines like app development and management, adding new lines like analytics, and building specific offerings to handle clients’ M&A situations. Based on its higher domain expertise and consulting skills, Cognizant plans to take client relationships to a new level in the next 12 to 24 months. In the long term, it wants to leverage its proprietary global delivery methodology — Cognizant 2.0 — to win in new areas such as cloud computing and IP-led solutions like platform BPO. Cognizant also talked about its “four-point diamond” strategy that focuses on efficiency, effectiveness, innovation, and virtualization. · HCL takes the unbeaten path to differentiate itself. HCL talked about key initiatives like “employee first,” which empowers its employees and assures them of internal support while they focus on delivering client benefits; “destroy the office of CEO,” which makes each business unit self-controlled and self-managed; and its new “value portal,” which will help the company to shift from a volume or labor-centric business to value-driven client relationships. It wants to differentiate and build a strategy in areas where, as HCL believes, global as well as the top Indian firms are too much alike.
  • 7. © 2010, Forrester Research, Inc. Reproduction ProhibitedJune 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 6 HCL also talked about capping profitability at 20% and reinvesting anything above that back into the business — similar to what Cognizant has done. Other initiatives include shifting focus from vanilla application work (which is getting fast commoditized) to what HCL calls full- service sourcing, which includes application combined with infrastructure support as well as the process layer on top; extending transparency in the transaction to boost client trust; building a transformation mindset to deliver business-aligned IT; and encouraging more clients to go for a shared risk/reward-based new engagement models. · Infosys prepares to make its clients smarter. To build a broader services footprint from consulting to maintenance, Infosys is focusing on extending its GDM, improving efficiency, and harnessing new engagement models. It wants to leverage its current relationships to sell additional lines of services such as testing, product design/R&D services, and analytics. Infosys is also investing in building platforms for delivering a range of services from FNA, HR, legal, customer service, and insurance to learning. To achieve this and evolve as prime supplier in a given account, it is extending its system integration capabilities, planning to increase local delivery capabilities, and looking to build IP-based industry solutions. Overall, it intends to help clients in their mission of building a smarter organization based on ideas such as collaboration, trusted partnerships, and employee reorganization to better leverage decision tools and social networking. As Infosys prepares to help clients move in to the 21st century and to understand what will make them successful, Infosys has also created a small team to track the top business trends, how technologies are changing and the impact of these changes, and what Infosys can do to make client organizations into “smart companies.” It also believes that its earlier “flat world” strategy has helped it penetrate deeper into client accounts and has helped to develop more long-term relationships.3 · Tata Consultancy builds on its leadership position. TCS wants to build on its current leadership position and leverage its large number of existing client relationships, wide range of service lines, globally distributed delivery centers, and strong presence in emerging markets. To that effect, it continues investing in areas such as platform-based BPO, components and framework, and software products for the financial services industry. It also anticipates a huge success with its unique offering, “IT-as-a-service (ITaaS),” which it is successfully piloting in the SMB space. It also plans to take its collaborative innovation strategy (T-COIN) to the next level using its proprietary platform, IDEAMAX. In order to win in the new world, TCS articulated a strategy of being more agile and announced its new organizational structure to support nimble, empowered business units. Some other initiatives that TCS is working on include building ethnic diversity, large-scale recruitment plans and continued recruitment of fresh university graduates, and building a new center of excellence for emerging technologies like social networking, cloud, and Web 2.0.
  • 8. © 2010, Forrester Research, Inc. Reproduction Prohibited June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 7 · Wipro focuses on technology, delivery innovation, and productivity to help clients save more. Some of the top themes that Wipro is working on include integrating IT services and BPO, enhancing its consulting capabilities, and building a nonlinear service delivery to break the link between headcount and revenue. To compete in the 21st century, Wipro told Forrester that it is taking key steps such as building a global workforce, striking strong alliances with partners that tie Wipro and the partner together on various fronts such as selling, building a product/solution, and distributing partner products, as well as looking actively for acquisition targets. To focus on large accounts, Wipro is revamping its client engagement program with dedicated engagement management and consulting-led selling. It continues to invest in building IP- led technology solutions, new engagement models to strengthen its services delivery, and harnessing capabilities for technology initiatives like Web 2.0 and green technologies. Wipro’s three-phased execution of its strategy addresses incremental cost savings and cash conservation in the near term, new engagement models and SI capability to impact client business in the medium term, and expands transformation capabilities to reinvent the client business model in the long term. Wipro strongly believes that such a plan will allow it to help its clients as the technology and business base line — what Wipro calls a “new normal” — changes in the years to come. HOW do the TOP OFFSHORE FIRMS RANK ON Emerging SUCCESS CRITERIA? As these firms work on their new strategies, they need to address two challenges. First, their strategy needs to help them fight global competition as their age-old differentiation is getting fast commoditized. Second, their strategy needs to be prudent enough to cope with the new, changing features of IT services: scope, business buyer’s influence, complexity, delivery mechanisms, and pricing models. Considering these requirement shifts, Forrester developed a new framework that includes a combination of traditional success factors that will not go away (such as low cost, quality, efficiency, and reliability) and new criteria to meet the demands of next-generation IT services (see Figure 4). Given the leadership position of these five providers in the current market format, they obviously score highly on success factors for their existing services model. Our newly added success criteria include: · Harnessing new technologies and domain capabilities. Clients are leveraging India for more and different types of services. They want to leverage offshore providers for work related to newer technologies such as SOA, Web 2.0, and pervasive technologies like RFID or GPS that connect the physical world to the digital. They are also looking for industry vertical or business process expertise from their offshore suppliers. Arguably, all five providers score well on the technology front. Over the past two to three years they have also invested in building business- side capabilities by either recruiting industry experts or by acquiring small firms with deep, strong, or specialized capabilities.
  • 9. © 2010, Forrester Research, Inc. Reproduction ProhibitedJune 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 8 But not all five players possess high-end business skills across all verticals. For example, while Cognizant is historically strong in the financial services, insurance, and healthcare domains, it is quickly building capabilities in some other verticals like manufacturing and retail. HCL, on the other hand, has limited vertical capabilities as several of its stronghold service lines like infrastructure services or engineering are predominantly cross-industry or technical in nature. · Developing new engagement and pricing models. All of the five providers Forrester spoke with understand the clear shift from a time-and-materials (T&M) pricing model or dedicated development centers (ODCs) to more industrialized engagement models wherein vendor payment will be a function of the output they deliver, not how much effort they put in. To that effect, providers have set up special groups to analyze client business models, forecast demands, and financials and come up with win-win price levels. These five providers also told Forrester about the early success they have achieved and how they have converted 8% to 10% of their existing business from old models to new ones like managed services or transaction-based pricing. While this is a long-term trend and all of the providers are at the initial stage, our analysis shows that factors such as the ability to understand and model a client’s business and financials, engaging with clients to assess that client’s historic cost data, and the ability to take on some risk are some key factors in determining provider success. Early indications show that HCL and Cognizant lead the pack, with Wipro and Tata Consultancy exploring various avenues to offer new models. Infosys, however, struggles here as it is risk averse when compared to the others, and several clients have also told Forrester that they found that Infosys is slow moving when it comes to the actual bidding. Infosys reiterates that it is committed to new engagement and pricing models but wants to be selective on the deals it picks as this trend evolves. · Building a global delivery network. The future of IT services demands that the providers shift from a simple offshore model involving an onshore client site and an offshore India location to multiple client locations supported out of globally distributed provider locations. While Tata Consultancy has a clear lead with its multiple and sizable development centers across Europe and Latin America, others are working hard as well to build a global delivery footprint. For example, Wipro’s acquisitions, such as Infocrossing, gave it not only resources but also hosting and data center facilities in the US. Infosys’ acquisition of the Philips facility in Poland and HCL’s Axon deal are some other examples of providers growing their delivery networks outside of India. · Creating industry solutions and strategies for intellectual property (IP). With IT becoming aligned with the business, and the business partially controlling IT’s decisions and budgets, IT service providers need to offer solutions that help with business goals and not just CIO issues. They also need to deliver IP-based solutions to help clients build industry-leading business processes. The key factors here include the provider’s ability to find the right white space and to employ effective governance so the opportunity is well leveraged. Infosys and Cognizant have
  • 10. © 2010, Forrester Research, Inc. Reproduction Prohibited June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 9 made big strides with their development and deployment of IP-led solutions across several verticals. They also have a strong executive commitment, dedicated experienced resources, and a structured review method in place. HCL has also made good progress in building IP as well as product development in IT, and the Axon acquisition gave the firm IP in several verticals where it did not operate in the past. Tata Consultancy and Wipro lag behind as most of their IP initiatives are technology and tools-centric and feature limited client success stories to talk about. · Showcasing thought leadership and management depth. One of the main reasons for the growth of the Indian IT industry in the past was that clients wanted to cut costs and as a result pushed more work offshore. But as offshore services are commoditized, with almost all global providers offering them, the opportunity is diffused. Like any other highly competitive business, factors such as how the company is managed, quality of top management, brand recall, and thought leadership have become important not only in opening the doors for the vendors and striking the deals, but also for strengthening the executive relationships and building trust and visibility among global business community. With each of top five firms undergoing a management reorganization of sorts in the past two to four years, this aspect is evolving as a battle of nerves as C-level executives from these five competing firms fight to get away from the shadow of their predecessors and build their individual brands. Traditionally, Infosys’ top leadership was seen as the light bearer of not only IT, but all Indian industry, and led the country at global platforms like the World Economic Forum or through industry associations. The new management team at Infosys, however, is not able to sustain the charismatic leadership standards set by their earlier CEO and has had limited success in opening business opportunities for Infosys via those avenues. On the other hand, management changes at Tata Consultancy and HCL have positively affected not only the public image of these firms, but also visibly increased the energy levels and motivations of their employees. At Wipro, the high concentration of ownership of the company and the unique organizational structure with two CEOs remains a concern for many clients. · Extending marketing and value articulation capabilities. As the battlefield shifts from an internal, delivery-centric offshore focus to more of a client focus, the importance of all client- facing roles has skyrocketed. Factors such as the ability to segment and target a specific market for pointed solutions, the sophistication to articulate the value proposition, the ability to engage successfully with business buyers at a client’s location, and leveraging the capabilities or past successes to build the next level of a relationship have become key to the service provider’s success. A provider also needs to invest enough in building these capabilities, even at the cost of increased profitability. Cognizant and Infosys have achieved great success with their continued focus on this area — and they continue to recruit the right skills to man the client-facing roles. HCL is also starting to follow Cognizant’s blueprint and impose limits on profitability by investing more on in the field
  • 11. © 2010, Forrester Research, Inc. Reproduction ProhibitedJune 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 10 resources. While this is now also a top issue at Tata Consultancy and Wipro, they still have some distance to travel to catch up with the leaders. Infosys was an early starter on this front, but can’t rest on its laurels and needs to put sustained efforts into maintaining its leadership in this area. Figure 4 A Baseline Qualitative Analysis Of The Top Five On Emerging Services Success Criteria Source: Forrester Research, Inc.56214 Very low Some Average Good Excellent Harnessing new and emerging technologies like Web 2.0, green, pervasive Depth of business knowledge across verticals, breadth of industry verticals served Developing new engagement and pricing models Building global delivery including nearshore and onshore scale Creating industry solutions and intellectual property (IP) strategy Showcasing strong thought leadership and management depth Sales, marketing, and value articulation or differentiation capability Cognizant HCL Infosys TCS Wipro R e c omme n d at i o n s Validate That Your Provider Can Deliver business-aligned services The providers that get a berth in the top five ranks in today’s offshore market may not make it to the coveted leadership position in the next several years. To identify if your provider(s) will be able to provide higher-level services, sourcing executives should: · Treat all five firms almost at par for mundane application-related work. More than 50% of the work that comes offshore falls under the application development and management category. The top five providers have been successfully delivering this type of work for decades. However, we see many clients still evaluate the top five firms on things like technical skills, number of people, scale, attrition, and tools or methodologies they are adopting to improve their productivity. Our research shows that all five players deliver reasonably good
  • 12. © 2010, Forrester Research, Inc. Reproduction Prohibited June 9, 2010 A Strategic Review Of The Top Five Offshore Vendors For Sourcing & Vendor Management Professionals 11 services across these areas and typically undertake very similar new initiatives to boost efficiency and to contain costs. Hence, Forrester suggests that buyers focus mainly on the contract terms and rates the providers offer in this highly commoditized space. · Focus on diverging strategies and new success factors. We find that the top providers differ substantially when it comes to creating new solutions, developing IP strategies, pursuing white spaces, choosing which verticals to specialize in, and building new nearshore or onshore centers. As expectations from services firms change to deliver more business value, factors like end user support, knowledge of specific business processes, and IP-led solutions that can offer better client experiences or strategic advantages are more important. Sourcing professionals should revisit their service provider evaluation models and scorecards to accommodate these new criteria and either remove or place less emphasis on some older ones like CMM. · Look at their execution, not only at their plans. Dig into the investments that your provider is making. Ask for periodic updates on their strategies related to industry solutions, IP governance and success stories, and growth in nearshore and onshore centers. Also insist on appointing an executive sponsor and dedicated account team that can engage with their top management and business leadership to assure shared risk and a value-based trusted partnership, not a provider relationship where a delayed project means more billable resources and more money to the provider. · Stop evaluating top offshore vendors and onshore vendors separately. Many clients maintain two exclusive lists of providers that offer onshore and offshore services and evaluate them separately. Forrester suggests that sourcing professionals rework their service provider lists. The first list should include top Indians and MNC providers that deliver a large set of end-to-end, enterprise-class services to globally distributed companies, and the second list should include the specialists that can deep dive in a niche capability and can deliver incremental value over and above what the broad-based generalists in the first list can deliver. Endnotes 1 Infosys, Tata Consultancy Services, and Wipro announce their results on an April to March cycle, and their fiscal results are taken accordingly. For Cognizant and HCL — which follow different accounting years than the typical Indian fiscal year — we have used reports for the12 months preceding March 31, 2010, to make a fair comparison. 2 A recent Forrester report predicted that the US IT market will grow by 6.6% in 2010 (twice the 3.1% growth in nominal GDP), following a drop of 8.2% in 2009. See the January 11, 2010, “US And Global IT Market Outlook: Q4 2009” report. 3 Anticipating a huge growth in the offshore product development market, top IT services firms Accenture, Cognizant, and Infosys are investing in it. See the February 8, 2010, “Accenture, Cognizant, And Infosys Boost R&D Services Competition” report.
  • 13. Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward- thinking advice to global leaders in business and technology. Forrester works with professionals in 20 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com. Headquarters Forrester Research, Inc. 400 Technology Square Cambridge, MA 02139 USA Tel: +1 617.613.6000 Fax: +1 617.613.5000 Email: forrester@forrester.com Nasdaq symbol: FORR www.forrester.com M a k i n g L e a d e r s S u c c e s s f u l E v e r y D a y 56214 For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions. For a complete list of worldwide locations visit www.forrester.com/about. Research and Sales Offices Forrester has research centers and sales offices in more than 27 cities internationally, including Amsterdam; Cambridge, Mass.; Dallas; Dubai; Foster City, Calif.; Frankfurt; London; Madrid; Sydney; Tel Aviv; and Toronto.