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| IT services deal size gets bigger |
While the number of IT services deals is increasing in the domestic market, the sizes too are getting bigger and the margins are increasing.
Moreover, with research and advisory firm Gartner’s prediction of the IT services market growing at a Compound Annual Growth Rate (CAGR) of 20.4 percent for the next 5 years, the scenario will only get more lucrative for these firms.
IT services deals now range between Rs. 40 crore and Rs. 80 crore on an average - from less than Rs. 10 crore earlier. BPO deals too, which earlier averaged at Rs. 60 lakh and Rs. 80 lakh, now range between Rs. 6 crore and Rs. 8 crore on average, according to Gartner.
Arup Roy, Senior Research Analyst, Gartner, says while telecom, government, manufacturing and BFSI sectors have traditionally been the big spenders, verticals like retail and utility are also catching up.
Industry players say $25-50 million (around Rs. 100-200 crore) deals are becoming the norm. The margins in the domestic market are also getting bigger. A few years ago, margins in the domestic market would be in the range of 8 to 10 percent. Currently, the margins vary between 15 and 20 percent, says Roy.
Despite being a multinational, IT giant IBM scored on home turf with cumulative IT outsourcing deals of nearly $2.5 billion - most of them in the telecom sector.
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- Excerpts from a report in Business Standard |
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