Based on research of some 20 Indian software services companies during August, JP Morgan believes that Indian companies such as Wipro Technologies Ltd and Infosys Technologies Ltd can offer a cost advantage of 35% over their counterparts based in the US and Europe. The bank claimed in a research note that as much as 50% of Paris, France-based CGEY’s sales from application services are at risk from less expensive offshore service providers. India now accounts for 38% of all software development, according to JP Morgan estimates.
CGEY is currently in takeover talks with Boulogne, France-based systems integrator Transiciel SA, but JP Morgan believes that a takeover would show the company addressing short-term earnings needs rather than long-term competitiveness. CGEY has 2.5% of its people in low-cost markets, whereas Accenture Ltd and IBM Global Services both have 10% of their workforces based in low-cost, so-called offshore locations.
Source: Computerwire
