Outsourcing: Vivek Chopra of Computer Sciences Corp. (Part 13)

By guest author Tony Scott

The Future Giants of Outsourcing

Tony: The move to cloud computing clearly will increase the pace of change toward globalized delivery, but many are still concerned about the issues of security and confidentiality of data – do you see this changing over the next few years?

Vivek: I think that what are now considered cutting-edge technologies in the cloud will become a reality everywhere over the next few years.  In the next twelve to eighteen months, some of the impediments in security, confidentiality, and other problems will be addressed.  Once that happens, I believe that ultimately there will be maybe five, six, or seven top suppliers.

Tony: Do you think the survivors will they be the big U.S. players or Indian companies?

Vivek: Some of the India-based companies will become more global, and the already-global companies such as IBM, Accenture, and CSC will become more local to the markets in which they operate.  I believe India will remain the mainstay of the outsourcing world, but you could have significant growth in China, parts of Latin America –  Chile, Mexico . . .

Tony: Brazil?

Vivek: Yes, Brazil. Argentina is coming on as an off-shore location as well.

I also believe that there will be a large chunk of business that will be driven by domestic markets. Today, India is becoming a large domestic market itself.  You have companies in India that are becoming global both in terms of revenue scale and aspiration. There is the same thing in China as well.

I think that it will start getting to the level, and Indian and Chinese companies are going to start focusing on India, China, Mexico, Brazil, Argentina, and parts of Eastern Europe and the Middle East rather than just the United States or Western Europe.  The local requirements of these new regions will become significant enough for people to feel that they should invest in them.  These are not only markets that are mature, but markets that will give you the same return that American or European markets can give you.

The talent issue will remain; no question about it. You will have to have a brand which will attract talent, but you also have to have fundamental processes and frameworks that rescue you from being completely dependent on talent. You still must have a knowledge base and processes that keep you embedded with the customer.

Tony: If there is no differentiated advantage, it all becomes about whoever provides at the lowest cost. You have to have something beyond that if you’re actually delivering a solution.

Vivek: Sure. I also believe that some of the work that gets done will be driven by a certain level of partnership. CSC and IBM could come together because CSC is very strong in the federal government market and in cyber security, for example; that’s what we do for living. I don’t think IBM has the ability to make investments in that space. So CSC and IBM will come together on some level on projects. One company will bring in the product, another the IT, and somebody else the infrastructure and the hardware to deliver what it takes. So partnerships will evolve and mature. What form they will take, I don’t know. Cisco is getting into servers; they encroached on HP’s space. Dell is getting into services.

So, how that will affect relationships and partnerships? We will see but that’s another piece where everyone is now trying to see how they can expand and get into a portfolio offering that is significantly different from what they might have invested in before. It’s happening with Cisco, IBM, HP, and even Xerox. How they are going to monetize and justify something like this is anybody’s guess but these are things which will continue to happen.

This segment is part 13 in the series : Outsourcing: Vivek Chopra of Computer Sciences Corp.
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