Indian IT companies eye European IT services firms as potential acquisitions

by Editor 7/18/2008 2:25:00 PM
Indian IT companies are sizing up IT services firms in Europe as potential acquisitions, reports The reason for this is Indian IT firms’ having more than enough money from various outsourcing deals, but being short of staff as they grow faster than the supply of new graduates come in.

Indian business press has speculated that French consultancy Capgemini is a possible target for acquisition and that IT giants Wipro and Infosys have both shown interest in buying it.

These days, Indian firms are being advised to seize the opportunities that open up because the economic crisis has lowered the price of such potential acquisitions.

Many European IT services firms that had already set up their own business operations in India have sold them to Tata, Infosys and other major Indian IT companies.

The problem companies face is the lack of qualified graduates to fill in new positions as business rapidly keeps growing. Universities in smaller cities don’t always provide the same quality of training. Professors with good IT skills usually swap teaching for more lucrative jobs in the IT sector.

A study by the McKinsey Global Institute shows that out of the 360,000 engineering students who graduate every year, only 25 percent are employable, while only ten percent of the remaining 600,000 graduates may be ready to take on a job.

To address the situation, India’s IT services giant Tata Consultancy Services has reportedly started spending more than two percent of its annual revenue on staff training.

Acquiring a company like Capgemini, for instance, would not only get Wipro or Infosys the qualified IT staff they need, but it would also get them employees who already speak the native language of the country.

To browse and apply for the latest consulting jobs at Capgemini, please visit our IT consultant job board.

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