IT services firms are expanding their revenue streams to geographies including Australia, Middle East, the Nordic region and even India through new centres and acquisitions to diversify beyond the core US market.
With a rise in technology spending from the regions, India’s software service providers are building nearshore centres to capitalise on the demand, reducing exposure and reliance on the biggest market (the US), prone to volatility and partly to visa policy-related challenges. Further, the firms are growing cybersecurity and consulting capabilities to cater to the growing demand from these newer regions.
“Organizations are proactively managing global volatility and uncertainty through several derisking vectors. Diversification in geographies beyond the United States such as Middle East, Continental Europe, Eastern Europe and nearshore Americas options are emerging areas of interest,” said Siddhartha Tipnis, partner and technology sector leader at Deloitte India.
Investments are through two major routes – delivery centres for localised and time-zone aligned delivery and regional offices for greater feet on street, and sales / relationship building momentum, Tipnis added.
Over the last two years, the largest player Tata Consultancy Services (TCS) has been increasing its revenue share in Europe, India, Asia Pacific (APAC) and Middle East and Africa (MEA) while its North American share reduced marginally. Along similar lines, the second largest player Infosys witnessed a rise in Europe, India and ‘Rest of the World’ (RoW) market share and a decline in North America market exposure.
To be sure, the US market continues to dominate with the largest market share at over 62% of the business for the industry as on FY25, even as other regions are increasing their share.
As per industry body Nasscom, Europe contributed 11.3% to the revenues of the industry, while the UK’s share is at 16.5%. APAC stands at 7.7% while RoW (including India) is 2.2% for last fiscal year.
Third largest IT major HCLTech increased its American market share and saw a dip in Europe, its RoW contribution rose, and the Noida-headquartered firm also started reporting the bifurcation of India revenue share over the past two quarters.
With increasing competition from insourcing of technology services by clients, IT players are also focusing on servicing their global capability centres (GCCs) in India as a growing business practice, making India a growing market.
In April, HCLTech CEO C Vijayakumar said, post results, “We are also significantly expanding our software business in India, Middle East, and a lot of emerging markets where we see a strong demand for these products.”
Among the top tiers, Infosys, HCLTech, LTIMindtree and Tech Mahindra also witnessed new business deals from European clients, marking a revival for the region after three quarters of deal slowdown.
Even, mid-cap firms such as L&T Technology Services (LTTS) and KPIT Technologies won deals outside of the US.
TCS and Infosys have set up centres in Europe and TCS added one more centre in Middle East. Fourth largest player Wipro has announced relocation of its Middle Eastern headquarters to Saudi Arabia.
“This is partly about building nearshore capabilities, but equally about preparing for a future where data sovereignty and security requirements will only get tighter as AI adoption accelerates,” said Gaurav Parab, principal research analyst at UK-based research and analysis firm NelsonHall.
Parab anticipates heightened activity in Middle East, Nordics and Australia in services like cybersecurity, Agentic AI and platform capabilities. Nordics region comprises of five sovereign nations – Denmark, Finland, Iceland, Norway, and Sweden.
Infosys said it started making investments in Europe a few years ago and has been growing faster than the US market. However, the management continued to maintain that US will remain its largest market.
After the March quarter earnings announcement in April, the Bengaluru IT major’s chief Salil Parekh said, “We are looking to expand in other geographies in addition to what we are doing in the US. For example, we have a new partner in Japan in a joint venture, or the acquisition in Australia. So, we are quite positive in the medium-to-long-term on technology, how it will change, how AI will impact it and our role in all of that.”
Infosys also recently made acquisitions in Australia and Japan including the most recent large-scale investment in a joint venture with Australian telecom player Telstra.
With the slowdown in IT spending and pressure in industries like telecom, valuations have become more attractive, Parab added.
With a rise in technology spending from the regions, India’s software service providers are building nearshore centres to capitalise on the demand, reducing exposure and reliance on the biggest market (the US), prone to volatility and partly to visa policy-related challenges. Further, the firms are growing cybersecurity and consulting capabilities to cater to the growing demand from these newer regions.
“Organizations are proactively managing global volatility and uncertainty through several derisking vectors. Diversification in geographies beyond the United States such as Middle East, Continental Europe, Eastern Europe and nearshore Americas options are emerging areas of interest,” said Siddhartha Tipnis, partner and technology sector leader at Deloitte India.
Investments are through two major routes – delivery centres for localised and time-zone aligned delivery and regional offices for greater feet on street, and sales / relationship building momentum, Tipnis added.
Over the last two years, the largest player Tata Consultancy Services (TCS) has been increasing its revenue share in Europe, India, Asia Pacific (APAC) and Middle East and Africa (MEA) while its North American share reduced marginally. Along similar lines, the second largest player Infosys witnessed a rise in Europe, India and ‘Rest of the World’ (RoW) market share and a decline in North America market exposure.
To be sure, the US market continues to dominate with the largest market share at over 62% of the business for the industry as on FY25, even as other regions are increasing their share.
As per industry body Nasscom, Europe contributed 11.3% to the revenues of the industry, while the UK’s share is at 16.5%. APAC stands at 7.7% while RoW (including India) is 2.2% for last fiscal year.
Third largest IT major HCLTech increased its American market share and saw a dip in Europe, its RoW contribution rose, and the Noida-headquartered firm also started reporting the bifurcation of India revenue share over the past two quarters.
With increasing competition from insourcing of technology services by clients, IT players are also focusing on servicing their global capability centres (GCCs) in India as a growing business practice, making India a growing market.
In April, HCLTech CEO C Vijayakumar said, post results, “We are also significantly expanding our software business in India, Middle East, and a lot of emerging markets where we see a strong demand for these products.”
Among the top tiers, Infosys, HCLTech, LTIMindtree and Tech Mahindra also witnessed new business deals from European clients, marking a revival for the region after three quarters of deal slowdown.
Even, mid-cap firms such as L&T Technology Services (LTTS) and KPIT Technologies won deals outside of the US.
TCS and Infosys have set up centres in Europe and TCS added one more centre in Middle East. Fourth largest player Wipro has announced relocation of its Middle Eastern headquarters to Saudi Arabia.
“This is partly about building nearshore capabilities, but equally about preparing for a future where data sovereignty and security requirements will only get tighter as AI adoption accelerates,” said Gaurav Parab, principal research analyst at UK-based research and analysis firm NelsonHall.
Parab anticipates heightened activity in Middle East, Nordics and Australia in services like cybersecurity, Agentic AI and platform capabilities. Nordics region comprises of five sovereign nations – Denmark, Finland, Iceland, Norway, and Sweden.
Infosys said it started making investments in Europe a few years ago and has been growing faster than the US market. However, the management continued to maintain that US will remain its largest market.
After the March quarter earnings announcement in April, the Bengaluru IT major’s chief Salil Parekh said, “We are looking to expand in other geographies in addition to what we are doing in the US. For example, we have a new partner in Japan in a joint venture, or the acquisition in Australia. So, we are quite positive in the medium-to-long-term on technology, how it will change, how AI will impact it and our role in all of that.”
Infosys also recently made acquisitions in Australia and Japan including the most recent large-scale investment in a joint venture with Australian telecom player Telstra.
With the slowdown in IT spending and pressure in industries like telecom, valuations have become more attractive, Parab added.
