TCS opens 1000-seat development centre in US

MUMBAI: Tata Consultancy Services Ltd, India's top software exporter, said on Tuesday it had set up its first delivery centre in the United States to serve its dominant North American clients.

The facility, near Cincinnati, Ohio, will be its primary software development and delivery centre for North America, and can hold 1,000 employees, "most of whom will be locally hired from the region and its universities", TCS said in a statement.

"It reflects our long-term commitment to customers in one of our key markets globally," Chief Executive S Ramadorai said in the statement. TCS has also been beefing up its presence in emerging markets including Latin America and Eastern Europe amid fears of a recession in its key US market.

Tata Consultancy Services expects demand from emerging markets like Latin America and Eastern Europe to jump, an official said, amid fears of a recession in its key US market. India's top software services exporter sees emerging markets accounting for about 20 percent of its revenue in five years, up from around 8 percent now, Gabriel Rozman, its executive vice president for emerging markets, told media in an interview.

In the fiscal year ended March 2007, Tata Consultancy's consolidated revenue rose to $4.3 billion. "We believe that there is a lot of local work that can be for local customers in those markets. We believe that there's a lot of local talent that can be used to build new development centres," Rozman said.

In January, Tata Consultancy, part of the Tata Group that has interests in cars, commodities and services, set up a strategic unit to focus on emerging markets, which include Latin America, Africa, the Middle East, Russia and Eastern Europe.

India's export-driven outsourcers like Tata Consultancy and Infosys Technologies, which get more than half their revenue from the United States, are increasingly eyeing deals in emerging markets amid widespread fears that a weakening US economy will cut into spending on technology.

Last week, Tata Consultancy said two of its 15 biggest clients have delayed some projects in this quarter. "We have a very aggressive growth strategy, so you need to keep opening new markets," Rozman said. "So far we have noticed that the emerging markets are pretty much decoupled from the slowing down of the economy in the US" India's large pool of English-speaking workers and comparatively lower wages have helped software services companies grab large outsourcing deals from Western firms looking to cut their costs.

But worries about a possible sharp slowdown in the United States have roiled global markets and weighed on software services stocks in the local markets. Rozman said Tata Consultancy saw strong business potential in emerging markets, as banks and other financial institutions, telecom firms and government departments step up outsourcing.

In November last year, Mumbai-based Tata Consultancy said it had won a four-year outsourcing deal worth more than $200 million from Social Security Institute of Mexico. Tata Consultancy plans to raise headcount in emerging markets to 10,000 by end-March 2009 from 7,500 now, and set up new software development centres in places like Russia and the Middle East over the next two years, the official said.

It currently has nine development facilities in emerging markets, including in Argentina, Brazil, Mexico, Hungary and Morocco.

Source : The Economic Times