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Indian Offshoring Not a Threat to Engineering and R&D Services Players in Western Europe ... For Now, Says IDC

LONDON, July 8, 2004 The main Indian offshore players do not currently represent a threat to the R&D services industry in Western Europe, according a new IDC study on offshore services. Indian players are currently rushing into Western Europe, after meeting significant success in the U.S. In the past, Indian offshore players focused on engineering and R&D services, in several vertical markets including telecom, high-tech, aeronautics, and automotive, often developing, maintaining, enhancing, and supporting applications running on embedded systems.
"Such proprietary applications running on embedded systems are relatively large projects that bring a fair share of maintenance and enhancement work in the following years. This suits the business model of Indian offshore players really well," said Marianne Kolding, director of IDC's European Services group.

"A suitable business model does not necessarily mean that Indian players are going to dominate the Western European engineering and R&D services industry," said Dominique Raviart, senior research analyst. "The engineering and R&D services in Western Europe encompass more than application development and maintenance and include less IT-focused R&D projects. For those projects, local presence, body-shopping capabilities, and engineering skills rather than IT skills are a must."

However, in the future the situation will change. IDC believes that Indian players are working on the long term and will penetrate key accounts. "Indian offshore players have the resources and the dedication to succeed," said Raviart. "At the same time, local European players have plenty of time to build their sourcing strategies, whether from Russia or from India."

The study, R&D and Engineering Services: What Will the Impact Be of Indian Offshore Players in Europe (IDC #Q06L, June 2004), provides an overview of the engineering and R&D services market in Western Europe, and assesses how low-cost Indian players are going to impact the engineering and R&D services market.

To purchase this document, please contact your local IDC office or visit www.idc.com.

Contact
For more information, contact:

Marianne Kolding
mkolding@idc.com
+44 208 987 7125

Dominique Raviart
draviart@idc.com
+33 1 41 97 64 03

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