India and The Vertical Angle to Outsourcing

Whereas Indian service providers have become major players in the application development and application maintenance space and are making big inroads on the infrastructure side, now the major vendors are looking into bolstering their vertical knowledge.

This means US-based service providers that take great pride in their deep specialized industry knowledge will soon face competition from the offshore providers.

Dean Davison, a VP with META Group, said he recently went to India, where one vendor took him to a real retail store where they had a “whole RFID set-up.” Another had a little model of a factory with electric vehicles and tiny people that could be moved around in order for the company to learn how a factory operates, what its logistics are. As Mr. Davison said, “You take things like RFID, retail expertise, manufacturing expertise, healthcare expertise… these organizations are putting world-class talent in place… Over the next two years you'll see a significant shift [among Indian companies] in becoming credible players in vertical practices.”

As one slide in the opening session at the “Mapping the Future of Outsourcing” conference stated: “Offshore vendors have an insatiable appetite for process, improvement, and quality.”