Japan leaves IT cos

 

The earthquake-stricken Japan’s over $108-billion IT services market may continue to remain elusive for India’s top-tier software services companies for the time being, with the ongoing crisis likely to slow down deals and hit plans to grow inorganically after years of trying to establish a foothold in the country’s closed market.

Globally the second largest IT services market after the US, Japan currently contributes to less than 1.5% of revenue for the top players in Indian IT sector and some 2% to India’s total IT exports revenue of $50 billion. The minuscule size of the offshore outsourcing business and language hurdles are the major hurdles in penetrating the market. But the share of business has been gradually increasing over the past couple of years as Indian firms have climbed up the value chain and are now scouting for Japanese acquisitions, according to industry watchers.