The consultants

On a visit to the Middle East, S Ramadorai, CEO and managing director of Tata Consultancy Services, spoke to Brid-Aine Conway about growth plans, and rumours of free products and services.

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By  Brid-Aine Conway Published  June 1, 2008

Much discussion has gone on around the return of skilled IT workers to India. Is this a good or a bad thing for India, and for the rest of the world in terms of the market for skills in various places?

I think the market for skills in various places will emerge as necessary for multiple reasons. Yes, when it comes to English-speaking and affordability, the number of graduates that come out of India will always be there and that will form a very critical mass to service quite a few markets.

But then you need local presence or you need localisation, for example in China and in Latin America as well.

The second aspect of it is that if innovation has to be the driver - and innovation has to be very clearly the differentiator for companies like us - then you seek talent or seek innovation wherever it is available.

If I find accelerated mathematical skills or developers in Eastern Europe, Hungary for example, I would not hesitate to go there, or if, for example, you need to go to Canada to get some skills in media and entertainment, or life and biological sciences, or the energy and utility segment where they might have an enormous amount of capabilities in software engineering.

There are still two locations from the global context which will have big critical mass - that'll be India and China. The regional locations will be some of the others and then localisations in a small measure will be the third set of locations.

There are reports that TCS is offering some services for free in the US to convince clients to sign large contracts because of the slowdown for banks and finance companies there. So would you say that TCS' focus is going to move into other markets apart from the US?

I think we won't reduce any dependency [on the US] - the IT spend is highest in the US, there are opportunities there for us and we're not going to walk away from them. The US will still be a dominant market because of the sheer spend and sheer presence.

The second aspect is that emerging markets will grow at a much faster pace than the US because mature markets traditionally tend to grow a little slower - Europe has been slow in outsourcing though it's picked up in the last couple of years. And then we see Asia/Pacific, Japan for example, growing, China's domestic market has an opportunity, India's domestic market has an opportunity - they are big markets and they've been showing excellent growth.

India's market grew 22% year-on-year - the margin structures may be different but they're very important.

The UK has passed $1 billion in terms of revenue for us, Europe has passed half a billion, so I think these are all becoming sizable markets where you will see growth.

The question you asked, which I still want to articulate, is whether we give services free - we never give any service free!

TCS: Background

Tata Consultancy Services is part of the all-encompassing Tata Group, a US$50 billion conglomerate covering everything from tea to cars (Tata Motors has just bought Land Rover and Jaguar from US carmaker Ford).

TCS itself was founded in 1968, and now boasts annual revenues of $5.7 billion with double-digit growth. Its stated aim is to become one of the top ten global companies by 2010 - although it faces stiff competition from other Indian tech firms, including Infosys and Wipro.

Currently receiving around half its revenue from the US market, TCS is also driving growth in emerging markets, including Latin America, the Middle East - and its home market of India.

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