Executive Summary (This is a document excerpt)

Polarization between the offshore providers in India is tightening. Fast growing and enviably profitable, India's top three providers — Infosys, Tata Consultancy Services (TCS), and Wipro — now drive almost half of India's total IT services exports by value. While Cognizant, HCL, and Satyam still hold their ground and continue to grow, most nonspecialized and undifferentiated tier two and tier three firms stand to lose out. Margin pressures do not allow them to invest enough in building specialization or take proactive initiatives such as process consulting or cultural workshops to help clients ramp up. The result? The majority of sub-billion-dollar firms is falling prey to a staff augmentation deathtrap and is increasing headcount without corresponding returns. Forrester predicts that many firms will shed up to 30% of their current clients to pursue a more specialized strategy and rebuild competitiveness. Forrester recommends that sourcing professionals reassess their vendor's survival readiness and review their supplier selection criteria in response.

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