The research company claims that Indian software developers secured just AU$71.71 million of the Australian sourcing market for development and integration services, out of a total market size of AU$3.585 billion. That's just two percent.
There were five Indian companies that captured most of the Australian business outsourced to India: Tata Consulting Services, Satyam, Infosys Technologies, Pentasoft and three companies in the HCL group. These firms grew by as much as 36 percent.
"These companies can be pleased with this achievement as their competitors are all registering single-digit growth," said Gartner's Asia-Pacific Vice-President for Research, Rolf Jester. "However in the scheme of things, this is a small share of the market. Certainly, it is disproportionate to the large amount of opposition to offshore sourcing that has been expressed in Australia in the last few months."
"Opposition will eventually die away as Australian companies take advantage of the quality and cost benefits and realise there is more to be gained economically by embracing, not resisting, the global delivery model," said Jester, claiming that there was a political backlash against offshore outsourcing because it was seen to threaten the jobs of local software developers.
The top 10 players in the Australian software development and integration sector accounted for 46 percent of the market, or AU$1.649 billion. They were led by IBM GSA, which has recently announced it would establish a sourcing centre in Ballarat.
The compelling reason for those who advocate the offshore move is the quality of work which is available at the fraction of a cost. And it's a fact that even at the higher cost; the quality of work is not as good as the off-shore project teams.
I think the problem is related more to the perception that whatever that comes from non-western world ought to be tof poor quality.
On the contrary, Japan and China lead the world in Manufacturing quality and India leads in software quality.
I agree 300 % with Gartner. I think infact Australia is well poised to offshore european IT work because of the lower cost, provided it builds up the strong quality orientation.
It's a saddening fact that Australia does not even have one company which is of global quality. The industry should push for ore in this direction. Quality improbvement is the key to success.