Indian IT Firms rush in as Europe takes to outsourcing in new normal

Indian IT services providers will step up focus on Europe this year to tap a market that has traditionally shied away from outsourcing, experts said.

Large software services exporters such as Tata Consultancy Services (TCS), Infosys and Wipro have made many acquisitions or won large deals in the region in the last few months as the Covid-19 pandemic pushed companies to transform their businesses quickly.

These firms will target more acquisitions and bigger deals in the region, analysts said.

“Germany is where the recent ‘mega-deals’ have taken place (in Europe) because most large German firms have never outsourced at scale before, and the current market made it appealing for the likes of Infosys, TCS and Wipro to secure a foothold in the lucrative German market,” said Phil Fersht, CEO, HfS Research.

TCS has increased its interest on Europe and is likely to make more acquisitions in the region, analysts said. According to the company’s chief operating officer NG Subramaniam, the region continues to grow at more than 20% year-on-year for the company. In November, TCS acquired Postbank Systems AG from Deutsche Bank in a deal that involved the takeover of 1,500 employees based in Germany. In the same month, the company acquired the IT assets of Pramerica Systems Ireland from insurance firm Prudential Financial Plc.

“It (Europe) is a growth market. In all the places where there is a constraint in quickly getting visas… (both in case of Postbank Systems and Pramerica) we now have access to about 2,500 people who are highly talented with the latest skill sets whom we can quickly deploy,” Subramaniam told ET recently. News Of India