As U.S. demand softens, Indian firms eye Japan

Indian tech service vendors have set their minds to increase their foucus on Japan, which is the world's second largest economy. The Tata Consultancy Services, Wipro, Satyam Computer Services and HCL Technologies move are in response to the softening of demand for their services from buyers in a slowing U.S. economy, reported Livemint.

Traditionally, Japanese corporations have outsourced tech and support units to local vendors. There has been "a lack of competitive element which has not pushed them to think differently," said Sanjeev Nikore, Corporate Vice-President and Global Head of Sales and Marketing, HCL Technologies.

According to estimates by India's largest tech services firm Tata Consultancy Services by 2010, spending in Japan will touch $95 billion growing at an annual rate of 3.2 percent from 2005. Currently, work worth around $32 billion is outsourced, a number expected to grow by a quarter to $40 billion by 2010.

The top five tech service vendors in Japan are Fujitsu, NEC, Hitachi, a local unit of International Business (IBM), and NTT Data Corp. IBM Japan, set up in 1937, is the only?Machines non-Japanese firm with a strong presence.

TCS, which set up its subsidiary in Japan in 2002, today has some 1,800 workers servicing Japanese businesses, including more than 300 based in that country. An offshore delivery centre in Kolkata drives all Japan specific initiatives for the firm. TCS? revenues from Japan amount to around $100 million.

 

Viral Thaker
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