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HCL Tech expects financial services business in Europe to cross Rs 6,000 crore [Software & Services] [Times of India]
[March 13, 2014]

HCL Tech expects financial services business in Europe to cross Rs 6,000 crore [Software & Services] [Times of India]

(Times of India Via Acquire Media NewsEdge) BANGALORE: HCL Technologies expects its financial services pipeline in Europe to be in excess of $1 billion (Rs 6,100 crore) this fiscal year, a senior official said, as economy improves and European clients become increasingly comfortable with offshore outsourcing.

India's fourth-largest software services company, which gets nearly 30% of its revenue from Europe, said it is seeing increased appetite for offshoring from customers in Europe, a market that has in the past shied away from outsourcing technology work to Indian companies. "Financial services pipeline in Europe has never been bigger. About 70% of this is expected to be signed this year," said Stuart Drew, executive vice-president in charge of HCL's financial services business in Europe and global head of insurance business.

Drew was referring to the value of the contracts that HCL Technologies was competing for, against Indian peers as well as multinational competitors. Drew, who joined the Noidabased company a decade ago from Deloitte, where he was a senior director in charge of financial services , said HCL's financial services business in Europe grew 21% last year.

"We expect similar growth this year." HCL's buoyant outlook comes at a time when India's top software companies are betting on continental Europe as their next growth engine. Europe contributes nearly one-third of the $108-billion (. 6.4 lakh crore) IT industry but the bulk of that currently is accounted for by Britain.

For years, Indian software companies have struggled to win large contracts from clients in the continental European market, where local companies such as Atos, Capgemini and Siemens have higher market share, as well as multinational providers such as Accenture and IBM.

However, over the past few years, top software services providers Infosys, Wipro and TCS have made significant strides and gained market share. They have made acquisitions, increased local hiring and strengthened local delivery centres.

HCL Technologies has 4,000 people across nine delivery centres in Europe, including Britain, Drew said. While Wipro hired former T-systems executive Ulrich Meister to head its continental Europe business , Infosys CEO SD Shibulal had said he expects higher growth from countries such as Germany and France. India's fifth-largest firm Tech Mahindra has just agreed to buy a small unit carved out from the IT services division of German chemicals maker BASF, while in 2013, and is open to further acquisitions in the region.

Drew said Indian software companies , for whom success in Europe has so far largely been limited to the UK and Nordic countries, are finding increased business in Europe mainly as large customers look for ways to reduce costs in the aftermath of the 2008 financial crash and the European financial crises that followed. "The barriers are coming down," he added.

(c) 2014 Bennett, Coleman & Company Limited

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