Indian BPOs likely to focus more on Europe

New Delhi: Indian companies are expected to focus on mainland Europe to tap growth opportunities in the offshore technology services market worth tens of billions of dollars, global research group Gartner has said.

"There will be tremendous focus on offshore technology services in the next two years... Indian players will be mainly looking at mainland Europe for their next growth opportunities," Gartner's Vice President and Regional Research Director (India) Partha Iyengar said.

Revenue garnered by domestic players from offshore technology services market is estimated to be at $40 billion.

Iyengar noted that Indian firms would be focusing on European markets such as Germany and France where it would be difficult to expand business without good domestic presence.

Even though a major chunk of revenues come from the US market, Indian IT entities also have good presence in various European markets.

Going by estimates, the size of the country's technology services is worth over $60 billion, dominated by IT services exports.

Meanwhile, Gartner has projected global IT spending will touch $3.6 trillion in 2011, an increase of over five per cent as compared to last year.

When it comes to Business Process Outsourcing (BPO), he said that companies would look at offering high-end services such as those to HR and procurement areas.

"High-end services provide more revenues than lower-end offerings like call centre, which are cost driven," he added.

Post global downturn, Iyengar pointed out that Indian players seem to have a "sharper edge" when it comes to offshoring activities.

"(Indian entities) have a good and credible services delivery record and coming out of the downturn, they seem to have a sharper edge (than many competitors)," he said.

According to Iyengar, there would be strong levels of consolidation, especially in the BPO sector, in coming years.

Big players are expected to strengthen their market position while relatively smaller entities need to focus on particular business verticals to survive in the highly competitive market, he added.