INTRODUCTION

The Indian IT services market remains the single largest location for offshore delivery accounting for approximately 50 percent of the global sourcing industry. Consequently, the provider landscape in India has matured significantly and comprises of global majors, Tier-1 Indian majors (revenues greater than US$2 billion), Tier-2 Indian service providers (revenues US$100 million to US$1 billion), and other small players.

While the global majors and Tier-1 Indian service providers are widely recognized to have contributed significantly to India’s dominance in the offshore IT services market, the efforts of Tier-2 Indian service providers are often overlooked. These providers played an important role in India’s growth as an offshore IT hub and currently account for a sizeable segment of the market. Further, select Tier-2 service providers have developed differentiated and competitive offerings to compete on the global stage, and constitute an important segment of buyer’s (esp. mid market) global sourcing portfolios.

This complimentary research report analyses the relevance and future role of Indian Tier-2 service providers in the offshoring of IT services and the resultant implications for buyers of global services. In addition, this report examines the differentiated value propositions of five leading Tier-2 service providers – Headstrong, Microland, MindTree, MphasiS, and Sonata Software.

CONTENTS

The report examines:

• The role of Tier-2 service providers in a buyer’s portfolio (illustrated by three client case studies)
• Differentiation themes and key leverage points of five Tier-2 service providers
  • Headstrong
  • Microland
  • MindTree
  • MphasiS
  • Sonata Software
• Fact-based snapshots and details on the differentiated foundations for growth of the five service providers
• Key implications for buyers and service providers

Some of the findings in this report among others are:

• Over the past few years, Tier-2 service providers developed credible, competitive offerings in offshore IT services and established an important position in the Indian offshore IT market
• While Tier-2 providers have a more obvious and complete proposition for small/mid-sized buyers, they can continue to play an important role as “specialists” for large enterprise buyers
• To achieve future success in the intensely competitive offshore marketplace, Tier-2 service providers will need to carve out niches and demonstrate a differentiated value proposition that goes beyond pure labor arbitrage and lower billing rates