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Zinnov study points to leadership of Indian players in global R&D services biz

Bangalore, July 12 2012: As a curtain raiser to its annual Globalization Summit , Market Expansion Advisory firm, Zinnov, has released its ratingsand study of Global R&D Service Providers’ across various geographies like India, China, Russia and Eastern Europe.
While Indian players continue to dominate the R&D services business, the study is an amber sign that warns against any complacency: China based Vanceinfo and EPAM Systems from Central Europe, have significant capabilities in the ISV - Enterprise Software vertical and are clearly in the leadership zone.
Wipro and HCL
are the leaders in the overall rating. While Wipro has a mature practice, HCL has grown significantly over the last two years. iGate, Infosys, Tech Mahindra & Mahindra Satyam and MindTree are some of the other established players with expansive vertical coverage . These companies are hyper-specialized either across a vertical or a service line. Some of the top established and niche players are Infotech Enterprises and L&T IES in Engineering Services, Aricent and Sasken in Telecom, Quest Global in Aerospace, Vanceinfo, EPAM systems, Symphony – Teleca and Persistent in the ISV segment.
The top six players constitute close to 60% of the total R&D service provider market, the study highlights. All 48 participating companies have been assessed on parameters like Human capital, product development capabilities, financials, ecosystem linkages, infrastructure & innovation / IP creation. While HCL and Wipro are leaders with overall capabilities, companies like Aricent, iGate, Infotech Enterprises, L&T IES, Symphony Teleca, Persistent, establish themselves as leaders in specific industry verticals.

The study shows that of all the offshored R&D outsourcing work done in India, about 63% of the work is delivered by the MNC Captive Centres. Service providers like Wipro, HCL, Boeing with the Indian Institute of Science, have created a consortium called Aerospace Network Research Consortium (ANRC). There is another - joint initiative between Imec and Wipro, called Applied Research in Intelligent Systems Engineering (ARISE).
Says Sundararaman Viswanathan, Manager-Consulting, Zinnov:, “We are seeing an increased trend of re-organization of services and verticals within the service providers. The service providers are taking a hyper-specialization approach. Segments like Industrial Automation and Healthcare (Medical Devices) are catered to by specialist service providers.”
With the release of the study this year, Zinnov also introduces the first-ever framework for classifying the Service Providers based on their capabilities and vertical coverage. The framework provides a dashboard view of the service providers across four quadrants Established, Emerging, Niche and Expansive. This is a unique representation because, it brings to light some of the niche service providers who otherwise typically get buried in the headcount / revenue based ratings”.