IT industry is looking at Nordic countries for more business

Worries on the European economy notwithstanding, IT industry is looking at Nordic countries for more offshore business.

Denmark, Norway, Sweden, Finland and Iceland make up the Nordics.

Indian companies currently earn around $500 million from the region.

An ‘Emerging Market Series’ report compiled by IT body Nasscom in association with PricewaterhouseCoopers said the IT services market in the Nordics is estimated to be $10-12 billion and growing at the rate of 5%. “It is estimated that less than $1 billion worth of IT services are offshored to low-cost destinations from the Nordic countries,” said the report.

In recent times, the European market has been a point of worry for Indian IT firms due to decreasing revenue from the continent.
India’s largest IT company by headcount, TCS, saw its
Europe market revenue growth reduce to 26.4% in Q3 compared with 27.1% in Q2.

Similarly, Infosys Technologies, the second-largest, saw revenue from Europe reduce from 28% in FY07-08 to 26.2% in FY08-09.
Wipro Ltd, on the other hand, saw European revenue fall from 26.5% in Q2 to 26.3% in Q3 this fiscal.  

“It is just that we were focused on 7 or 8 largest markets in the world all this while. It is not as if focus on Nordics has emerged because Continental Europe is not doing well for us. This is just natural focus that Nasscom is providing. In fact, they are taking a delegation to the Nordic region in a couple of weeks from now,” said the CEO of a top IT firm based in Bangalore.

His firm is in the mandatory silence period before the announcement of quarterly results.

According to the report the small IT market against the region’s GDP of $1.6 trillion is due to the presence of a large number of small and medium-sized enterprises. However the region is mature to the phenomenon of outsourcing.

“Over 55 % of the market is dominated by international and global
IT services vendors like IBM, CSC, Logica and Accenture,” stated the report.