Ramadorai told ComputerWire that the application support market is becoming increasingly commoditized, as Western IT services vendors such as IBM Global Services and EDS build up their own offshore delivery centers.

If we do the same thing of applications maintenance and enhancement, we are not going to continue on our growth track, he said. The investments that we have made in intellectual assets and software tools are essential to our future growth.

The company’s growth over the last 10 years has been spectacular. It is recruiting at a rate of more than 3,000 employees per quarter, taking its current headcount to more than 44,500. In the nine months ending December 31, 2004, net income rose 56.7% to INR 17.9bn ($408.8m) on revenue that rose 40.5% to INR 71.4bn ($1.6bn).

The vendor last year completed a listing on the Mumbai Stock Exchange where it commands a market capitalization of more than $14bn, and now faces extra pressure from the investment community to continue its rate of expansion.

Ramadorai highlighted several areas of growth opportunity. He said: Clients will continue to invest in applications re-engineering around open source, web services, and SOA technology. He also expects the sales of the company’s range of proprietary applications for markets such as financial services and healthcare to drive further services revenue.

By 2010, TCS is looking to capture $1bn in annual revenue from its business process outsourcing activities, an area in which it employs 1,800 people accumulated through acquisitions in the airline and insurance sectors. The company said this $1bn revenue figure would make it one of the top 10 global BPO vendors.

TCS is keen to develop in areas of infrastructure support services that can be readily run remotely from offshore locations such as helpdesk management, software distribution, and security monitoring. This might not necessarily be delivered from India. N Chandrasekeran, executive VP at TCS, said: We are particularly bullish about Hungary for infrastructure services…If any of the other major offshore centers scale up and show the potential to be the next India, we want to be the new number-one vendor there.

M&A activity will also play an important part in TCS’s future strategy if it is to achieve its goal of becoming one of the 10 largest IT services suppliers by 2010. Based on its last full-year revenue of $1.56bn, TCS ranked as the 27th largest global player, some distance behind tenth-placed Capgemini SA with $7bn in sales.

M&As will happen, said Ramadorai, but we are from a different culture, and for us axing a large set of employees [following a takeover] is not an option. Industry analysts name UK insurance software and services vendor Marlborough Stirling Plc as a potential takeover target for TCS.

Ramadorai agreed with comments made by Azim Premji, head of rival Indian company Wipro Technologies, who told ComputerWire last week that he believes the days of clients signing outsourcing mega-deals with single suppliers are numbered. Ramadorai said: The days of 10-year deals are gone. Customers want to see benefits from outsourcing more quickly.

More then 95% of TCS’s revenue comes from repeat business, with American Express a client since 1977 and General Electric since 1979. General Motors is also a customer, and TCS said it would also bid for a share of the $3bn in annual value of IT services contracts the automaker will tender next year.