FT : Infosys Says China Sucks

Thursday, August 30, 2007

Infosys Technologies admitted yesterday that its China operations were growing more slowly than expected, with the company’s customers preferring to use its English-speaking outsourcing base in India.  The comments from India’s second-largest computer services company highlight how China is failing to fulfil its early promise for Indian outsourcers of becoming a rapidly growing alternative pool of talent.  “It is growing slower than expected primarily because the global customers have not taken to China as much as we wanted them to,”S. Gopalakrishnan, Infosys’s new chief executive, said in his first meeting with the press.  “It’s also because India is the ideal location for offshore outsourcing today and there’s no driver to increase their exposure to China at this point.”  Infosys has a base of 700 employees in China in Shanghai and Hangzhou, while India’s number one software firm, Tata Consultancy Services, has more than 1,000 employees, most of them in a joint venture with Microsoft and three state-owned companies.  TCS had to wait 12 months before it was able to officially seal the joint venture last year, illustrating the comparative complexity of doing business in China.  Infosys has chosen to go it alone.  But it has not had any more success in scaling up in China because its customers, who are mostly based in the US and Europe, prefer India, with its base of English speakers and established reputation for outsourcing.  But Mr Gopalakrishnan said that in the longer term, Indian outsourcers could not afford to ignore China.  “China produces about 650,000 engineers every year and India produces 450,000 engineers, and the US produces 100,000 engineers,” he said.  “So you can see, if you want to continue to scale up, you have to look at locations like China.”

Reference : http://www.ft.com/cms/s/0/08401ba8-568d-11dc-ab9c-0000779fd2ac.html

One Response to “FT : Infosys Says China Sucks”

  1. daddyto3 Says:

    That my experience as well. There seem to be far more red tapes (many unseen and ‘unofficial’ ones!) in China than India. Reinforces my belief that India will come up tops to China in the longer term economic race. India has more depth; whereas China is mostly about its market size and volume potential.

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