US firms in the BPO space were bought up by the IT outsourcers who were in turn bought up by the Hardware providers. Is this the trend?
In the US and western Europe there were an great number of BPO firms that were founded in the 1990's. In the early part of this decade they began to be bought up by the IT outsourcing firms (EDS, ACS, Perot, etc.) These firms saw the inclusion of an IT delivery platform in the BPO offering as something that would enhance the value of the IT Outsourcer. Most of these firms were bought up and then the IT outsourcers were acquired by hardware providers, who believe they must be in the service business in order to get higher margins on at least some of their offerings.
HP bought EDS, Dell bought Perot Systems, Xerox bought ACS.
The same dynamic will most likely drive the Indian Outsourcers. Wipro and TCS are attempting to enter into the BPO market, but they need an acquisition to get some traction. Infosys already made one acquisition and HCL just bought an SAP provider.
This may provide the vehicle for the PE firms to get cash back for their investment and it certainly is something that is supported by the trends that occured in the US
Source:
Gerson Lehrman Group
Tags: BPO, Indian, US, Will, go, market, market?, of, the, way
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