REUTERS[ WEDNESDAY, MARCH 30, 2005 10:34:42 AM]
LONDON: European information technology service firms are turning more and more to India in a bid to cut costs, raise profits and ward off an emerging threat from Indian rivals on their own turf.
Capgemini, Atos Origin, Xansa and LogicaCMG are among IT firms hiring thousands of staff in India as they look to improve margins by providing services at cheaper rates.
"The main driver for local service providers here in Europe is the need for them to be able to compete cost effectively and profitably," Phil Codling, a senior analyst at European IT consultancy Ovum, told Reuters.
"If one of your competitors -- an Indian or a U.S.-based player -- has the option of delivering lower-cost services from offshore, then clearly you have to be able to compete."
Companies say customers are forcing the change by demanding services at cheaper rates.
"That's what has caused a huge scramble in the marketplace in the last 12 months," said Alistair Cox, chief executive of UK-based Xansa. "It's fair to say that if we did not have the sort of scale or skills that we have in India today, most of our private sector work would be under some sort of threat."
http://economictimes.indiatimes.com/articleshow/1065127.cms