Europe could be a smaller but growing market for outsourcing for Indian IT companies perturbed by the U.S. government’s stated antipathy towards outsourcing.
Gilbert van der Heiden, Research Director, Gartner, specialising in outsourcing, told The Hindu on Tuesday that “While Asia Pacific, including Japan, is the most interesting market for India, several members of the European Union can be outsourcing partners. But, Indian IT service companies need to understand the cultural and business needs of individual countries.”
The U.K. was still a strong market, followed by the Nordik/ Scandinavian nations like Sweden and Denmark the Benelux (Belgium, the Netherlands and Luxembourg) grouping, each with varying market growth, he said. While the U.K. was forecast to spend $160 million on outsourcing by 2011, Germany could spend $125 billion, France $92 billion and Italy $50 billion. The Nordik countries might together invest $63 billion this year, Mr. Heiden said. Benelux may spend $59 billion and was considered a growth market for IT services.
“While some Indian companies such as HCL and TCS already had a footprint in the Nordik countries, others need to make their presence felt and cultivate potential clients who no longer look at only call centres but look for value-added services,” he said. IT firms had to be prepared for stiff competition over pricing in Europe, he said. The privacy and data security concerns have to be addressed even more than in other markets. “Europe has at least 36 regulators monitoring the security and privacy aspects, reflecting the concerns of the potential customers. This is where Indian companies offering cloud computing services have to tread carefully and study the rules framed by Data Privacy Authorities in each country and understand the complexities involved,” Mr. Heiden said