A Study of Venture Capital in India

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With an estimated revenue growth of 35% in the current fiscal, Indian IT and Software Services is one of the fastest growing industries. According to National Association of Software and Service companies (Nasscom), for the fiscal 2000-01, the country’s software industry was worth $8.26bn. According to a Nasscom-McKinsey study, based on an average growth rate of 35% per year, the Indian software industry is expected to cross $50bn in exports in 2008. Now a basic question arises: what do these IT companies actually do?

Providers of IT services manage Information Technology (IT) systems, philosophically centered on the customer's perspective of IT's contribution to the business. IT services providers can no longer afford to focus on technology and their internal organization, they now have to consider the quality of the services they provide and focus on the relationship with customers.

Information Technology Enabled Services (ITES), also called ‘Remote Processing’, has emerged as the next major driver of the technology service industry. With competitive telecommunication costs, well-developed infrastructure and a huge pool of English-speaking and computer-savvy manpower, India rates higher than many other countries as a hub of ITES. Call centers and BPOs are the latest wave of growth in India. A McKinsey Study indicated that India will earn $18bn in revenues through these services and create additional employment of one million jobs. Already, companies like GE caps, British Airways, Swissair, American Express and British Telecom are using Indian companies for these services. The ITES segment currently employs around 70,000 people and accounts for 10.6% of the total IT software and services industry revenues. According to industry figures, the country’s top five software firms- TCS, Infosys, Wipro, Satyam and HCL Technologies- alone added more than 23,000 employees to their payrolls in the last quarter of 2006. This year they are expected to hire 1,00,000 more. (www.atimes.com)

A Brief History


TCS was founded in 1968; TCS is one of India's largest corporate houses. The company began as a division of the Tata Group, called the Tata Computer Centre. Its main business was to offer computer services to other group companies. Soon the company was spun off as Tata Consultancy Services after it realized the huge potential of the booming IT services.. The potential of computerization and computer services was realized early on, and an electrical engineer from the Tata Electric Companies, Fakir Chand Kohli, was brought in as the first General Manager. Soon after, the company was named Tata Consultancy Services.It is also India's largest IT employer

Infosys was founded on July 2, 1981 in Pune by N. R. Narayana Murthy and six others: Nandan Nilekani, N. S. Raghavan, Kris Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora, with Raghavan officially being the first employee of the company. N.Murthy started the company by borrowing INR 10,000 from his wife Sudha Murthy. The company was incorporated as "Infosys Consultants Pvt Ltd.", with Raghavan's house in Matunga, north-central Mumbai as the registered office. Today, the company boasts of revenues of over $ 4 billion and 1,00,306 employees. Under the leadership of N R Narayana Murthy, the company has become a global brand. The company is now headed by Kris Gopalakrishnan. Wipro Technologies:

What started off as a hydrogenated cooking fat company, Wipro is today is a $5 billion revenue generating IT, BPO and R&D services organization with presence in over 50 countries. In 1977, when IBM was asked to leave India, Premji decided to enter the information technology sector. In 1979, Wipro began developing it's own computer and in 1981, started selling the finished machine—the first in a string of products that would make Wipro India's one of the first computer makers. The company licensed technology from Sentinel Computers in the...
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