Revenues from Top 5 European IT Providers to Reach EUR 5Bn in ’08 – Value Leadership

According to Value Leadership Group, a New York-headquartered management consulting firm, revenues from the top five European IT companies (Capgemini, LogicaCMG, Atos Origin, Indra, and Tietoenator) are expected to increase from EUR 2 billion in 2006 to EUR 5 billion in 2008.

Among the key findings, India’s top two IT companies – Tata Consultancy Services (TCS) and Infosys – collectively generated net profit of about USD 1.7 billion in 2006, while the entire European IT industry generated net profit less than this figure of USD 1.7 billion. In addition, the combined market capitalization of the top five IT companies in Europe was USD 23 billion last month as compared to USD 100 billion among the top five Indian IT services firms including Infosys, TCS, Satyam, Wipro, and Cognizant (a US-based company having India-centric operations). However, the European IT market is expected to display various fluctuations by 2009 to compete with their Indian counterparts.

About 92 percent of the German firms are yet to realize the need for establishing offshore operations in India. However, some European big IT firms such as Capgemini have established their presence in India (Capgemini acquired Kanbay in 2006 to access Indian professionals).

Among the other key findings, Infosys’s revenues from Europe are expected to increase from EUR 950 million in 2007 to EUR 1.4 billion in 2008, reflecting a CAGR of 62 percent for the next decade. Even Wipro acquired few niche companies in Europe.