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Monday, April 5, 2010

Global recovery drives IT cos' plans to expand overseas

The revival in global economy has given a booster shot to the overseas expansion plans of the IT industry. Over the last two months, large IT companies seem to be pulling out all the stops to scale up presence in locations such as Romania, Australia, Brazil and Dubai.

While Wipro announced a new global delivery centre in Curitiba, Brazil in March and followed it up with a new Melbourne development centre, HCL Technologies has opened the regional headquarters for its West Asia operations, in Dubai. Genpact has announced its expansion in Romania by acquiring a new facility in the Transylvanian city of Cluj-Napoca.

The galvanised cross-border investment activity is visible not only for Indian companies but also MNC giants such as Steria and Microsoft that have spruced up their existing bases in India through additional IT services and R&D facilities, respectively, just last week.

“Over the past few months, there has been a significant uptick in the business pipeline, and companies are beginning to invest in anticipation of recovery,” says Mr Sid A. Pai, Partner and Managing Director at outsourcing advisory firm TPI India.

Global delivery models

This trend, he said, is true for all IT segments. “Indian companies looking to be truly global have been going after global delivery models,” Mr Pai said.

Wipro's new centre, located in South Melbourne, will provide consulting, software development, testing and business process services to domestic and global companies in Australia. The unit, along with those in Paramatta and Adelaide, will broaden Wipro's service capabilities.

The Curitiba centre in Brazil will serve as regional headquarters for Wipro offices located in the region - São Paulo (Brazil) and Buenos Aires (Argentina); and cater to global and domestic clients.

Last week, European IT-enabled business service provider Steria announced that it will deliver Remote Infrastructure Management services from its newly expanded centre in Noida.

Just a day later, Microsoft India R&D announced the expansion of its product development activities to Bangalore. It already has a development centre in Hyderabad.

Genpact, which has centres in Bucharest and Cluj-Napoca in Romania, has now started adding capacity in Cluj-Napoca. HCL Technologies recently inaugurated a new facility housed in Dubai Internet City, which will become the hub for regional operations. HCL services over 25 large organisations in West Asia.

“Companies are exploring new growth engines and new geographies, and there is a clear need to be close to end-customers. So, you will see expansion across all categories – IT services, BPO and R&D,” Mr Praveen Bhadada, Engagement Manager, Zinnov Management Consulting, pointed out.

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