MUMBAI: Traditionally, China is seen
as the main competitor, as well as a huge opportunity, for Indian software
However, East Europe has also emerged as a source
of potential threat and opportunity for the Indian software industry. In fact,
Indian companies are busy chalking out
their strategy for East Europe.
Countries in East Europe have good
educational infrastructure and language skills, which make the region an ideal
launch pad for tapping opportunities in the rest of Europe.
the Indian software industry
on its customer base in the US. While Western Europe is an equally big IT
market, it has been difficult to tap, due to multiple languages and cultural
Moreover, European companies are not used to outsourcing
their IT or BPO requirements, quite unlike their US counterparts. The lack of an
outsourcing mindset in Europe makes it more difficult for Indian companies to
take this work offshore.
Besides the language disadvantage, it is
also difficult to get temporary work permits or visas in Europe. European unions
are very conscious of immigrant workers and do not give an easy entry to
visitors who want to work. This makes things difficult for software services
companies, which need a certain number of employees to be located at the
customer’s premises (onsite in the industry jargon).
why East Europe is becoming the gateway for entry into the European Union.
Countries in Eastern Europe are emerging as a popular destination for Indian
companies to set up development and sales centres for servicing the whole of
Says Kees Ninenjuis, vice president (Europe), Wipro,
“Eastern Europe has high-skilled resources with language capabilities but
the labour arbitrage is limited and will reduce over the next few
Countries in Eastern Europe that are seeing increasing
near-shore activity are Hungary, Romania and Poland. Hungary is aligned to the
German, Austrian and Swiss markets, while Romania is aligned to the French
market due to language and cultural affinities.”
countries like the Czech Republic, Hungary, Poland, Belarus, Romania and Ukraine
have good education infrastructure with strong mathematical and computer
Hungary has the highest number of Field medal winners in
mathematics, the equivalent of a Nobel prize. Industry expertise and application
management skills are poor in these countries, but they are acquiring these
skills. Some programming and embedded software skills are much better in East
European countries as compared to India.
Some Indian companies have
recognised this advantage and are setting up development centres there. Satyam
Computers has recently set up one in Hungary. Keshab Panda, head of
Satyam’s European operations says, “East Europe can be utilised as a
near-shore centre for targeting West European customers.”