Indian IT firms eye Japan to counter US slowdown
At present, Indian firms get only 2-4% of their revenues from Japan and doubling this could be in their future growth agenda. Future leaders of tech
By Sreekala G, TNN |
HYDERABAD: Indian IT firms, bracing for an expected slowdown in the US economy, have zoomed in on Japan as a strategic market for future investments.
The Japanese IT market, the biggest after the US, is estimated at around $150 billion. At present, Indian firms get only 2-4% of their revenues from Japan and doubling this could be in their future growth agenda.
TCS, for instance, has built a facility in Yokohama, and set up a Japan offshore delivery centres (JODCs) in Kolkata and Pune. The country's biggest software services company has about 2,000 engineers servicing Japanese customers globally. The Asia Pacific region, including Japan, contributes around 5.5% of its revenues of Rs 5,923 crore in third quarter of FY08.
"Our Kolkata centre is the knowledge hub for Japan. It works with other satellite J-ODCs in China and other global development centers in India to serve Japanese clients," said Ashok Ganesh Pai, deputy general manager, TCS-Japan.
The Japanese IT market, the biggest after the US, is estimated at around $150 billion. At present, Indian firms get only 2-4% of their revenues from Japan and doubling this could be in their future growth agenda.
TCS, for instance, has built a facility in Yokohama, and set up a Japan offshore delivery centres (JODCs) in Kolkata and Pune. The country's biggest software services company has about 2,000 engineers servicing Japanese customers globally. The Asia Pacific region, including Japan, contributes around 5.5% of its revenues of Rs 5,923 crore in third quarter of FY08.
"Our Kolkata centre is the knowledge hub for Japan. It works with other satellite J-ODCs in China and other global development centers in India to serve Japanese clients," said Ashok Ganesh Pai, deputy general manager, TCS-Japan.
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According to Jonathan Browne, senior analyst at Forrester Research-Japan, Indian vendors have a chance to diversify into the Japanese market in the long term. But for now, the Japanese market is not ready for offshoring.
Indian firms believe the Japanese market is under pressure to cut costs and raise efficiency. Wipro has around 450 employees in Japan which made up around 3% of revenues last fiscal. Satyam has set up a Japan Centre of Excellence, with around 100 engineers from India, China, Vietnam and Japan.
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