Bangalore, Thursday, Jul 24, 2008: With NASSCOM predicting that India's software and services exports would touch 50 billion US dollars in 2008-09, the question that everyone is asking today is whether the country would be able to sustain such its glorious performance of the past decade.

With the industry facing adverse market conditions largely due to the US economic slowdown, the industry has all but accepted price cuts and reduced volume growth in the offshoring business and are therefore keeping their spending plans pretty much under wraps.

Furthermore, the acquisition of EDS by HP that gives the combine such abilities as IBM and Accenture had acquired in the past, has led to a paradigm shift whereby the global players believe that they are getting what they lacked earlier in terms of cheaper offshore capabilities, published reports say.

The Business Standard quotes Avinash Vashistha, Head of the offshoring consultancy Tholons, to say that such deals are making Indian companies sit up and take notice. There also seems to be a difference in the perception amongst the locally service providers and their erstwhile clients, with the latter going all out to acquire client acquisition, especially in work that's higher up the value chain.

While clients are continuing to outsource work higher up the value chain, "a significant part of that work is going to the MNCs and not to the Indian leaders". Multifunctional business knowledge or plain old consulting skills are emerging as a gap for the Indian leaders who need to make significant acquisitions to fill this gap, says Vashistha.

He also believes that MNCs are quicker to scale up and satisfy clients with global footprint and seek global delivery and predicts that India's three Big Guns - TCS, Wipro and Infosys - might concede ground to the multinational companies in terms this aspect.

The paper further quotes Siddharth Pai, the India head of outsourcing advisory firm TPI as stating that acquisition of global capability is the name of the new game. Indian companies are behind the MNCs on the global presence and states that companies with functional abilities now need to globalise delivery locations.

However, the report believes that BPO exports has nothing to worry. Having touched 10.9 million dollars in 2007-08, this segment has risen rapidly in the value chain by shifting growth from voice and transaction business to process and knowledge sourcing.