Enter the dragon: Clock ticking for Indian outsourcing model, says HCL

13th October 2010
Enter the dragon: Clock ticking for Indian outsourcing model, says HCL
Tick tock, tick tock for Indian ITeS

Leading India-based global IT services company, HCL Technologies has hoisted a cautionary flag about competition hotting up to India’s hitherto unchallenged position in the outsourced services space. Chief Executive  Officer, Vineet Nayar expects China to be the lowest cost manpower supplier in the IT sector by 2015. “Look at the technology companies from China…how does that fit in with the assumption that they do not understand English or technology? Chinese companies in telecommunication and electronics hardware have shown that they are capable of much more than cheap labour -- they are producing cutting edge technology at a price which is lower than everyone else”.

But this could be opportunity rather than crisis: Indian companies should exploit the situation by setting up shop in China – and hiring Chinese employees, Nayar suggested.
HCL is working to make money in China by serving local corporates, before the potential is grabbed by others: . It had set up a 150-strong development centre in 2007 and was working to increase its headcount, he added, speaking at

As its own counter measure, HCL had decided to invest $ 50 million in five new focus areas : cloud computing, e-governance, mobility, smart grid and biometrics, Nayar told 5000 employees at “Directions” the company’s annual “townhall” interface with its staff, just two weeks ahead of announcing the company’s second quarter results..

The 5.3 billion HCL Technologies, which went public in 1999, provides holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare in 26 countries.

Links to print sources for this story:

Financial Express: HCL to focus on 5 new areas
Times of India: 'IT cos face competition from China' http://timesofindia.indiatimes.com/business/india-business/IT-cos-face-competition-from-China/articleshow/6739418.cms  
Economic Times: Indian IT cos need to take Chinese competitors seriously: HCL http://economictimes.indiatimes.com/infotech/ites/Indian-IT-cos-need-to-take-Chinese-competitors-seriously-HCL/articleshow/6736799.cms  
Hindu Businessline: China, biggest threat in five years, says HCL Tech CEO http://www.thehindubusinessline.com/2010/10/13/stories/2010101353180700.htm