The top ten leading IT vendors cornered a 39 percent share of the highly fragmented £3.36 billion Indian IT Services Market in 2008, according to a report from Springboard Research. According to the report, the top three players, IBM, Wipro and TCS, took up a quarter share of the market, while the top ten ranking had many players with near one percent market share.

In terms of growth, Wipro led the established Services vendors with an over 43 percent growth in 2008 over the previous year. Satyam and HCL Infosystems registered second and third highest growth rates respectively, both growing well above the overall market growth rate of 18.6 percent.

“The overall market showed clear preference for vendors with end-to-end services portfolio, execution capabilities and the ability to combine software, hardware and consultancy,” said Sudip Saha, Research Analyst for IT Services at Springboard Research. “Big multinational players leveraged their ability to invest to corner a major chunk of the infrastructure outsourcing market, while large Indian vendors proved their mettle in the systems integration and application development markets,” Mr. Saha added.

However, speaking to sourcingfocus.com, Sudip commented that the country’s smaller players are also doing very well.

“The dominance of the larger players is actually down on previous totals. It was at around 50 percent for a time and now is down to 39 percent. Smaller players are still growing at around 45 percent a year which is two and a half times the worldwide average.”

According to Springboard’s research, the market in 2008 saw an overall increase in the average deal size of contracts where buyer enterprises are not only using IT vendors as technology providers but as business partners, providing them with means of competitive differentiation.

“Indian outsourcing is moving to create higher-value relationships where things are more quantifiable. The days where India could sell on price alone are gone – the market is too mature for this. Vendors are looking to become partners and create new risk and revenue-sharing relationships. This move towards high-value, business partner relationships is the future of Indian IT.”

The Springboard report, “India IT Services – Competing for Tomorrow’s Market”, is a companion document to Springboard’s earlier report “Indian IT Services Market and Forecast, 2007-2011” and is part of Springboard’s annual Asia Pacific IT Services Market Canvas subscription service.