06.18.08
More Evidence of Market Fragmentation
This year’s TiECon East conference focused on the continued likely growth in outsourcing to India - seeking to dispel rumors of a bubble in the outsourcing market. While this is not surprising - TiECon is the conference of the Trans Indus Entrepreneur organization - and may, in fact, prove true - that assertion was not the news in this article.
More interesting was the presentation given by Malcolm Frank, the chief strategy officer of Cognizant, which asserted that the days of “Offshore-R-Us” is over, and that €œ[s]ubject matter expertise is really important to [customers]. In retail, you want a company with point-of-sale experience. In pharmaceuticals, you want a company that has experience with clinical trials.
If this assertion is true, the door may open for boutique organizations that can develop specific expertise. However, the counterpoint is that it will become more difficult for new companies to enter the offshoring market and existing companies to grow into new, unrelated, lines of business.
On the other hand, the article points out that market saturation for Indian outsourcing is 10% in the U.S. and only 1% in Europe. If these markets can be encouraged to grow, there may be room for new entrants.
For more on the article, click this link.
