Infosys Technologies, which is sitting on one of the largest cash piles in the industry of about $4 billion, is edging closer to acquisitions in the region.
French companies such as the Sword Group and GFI Informatique have been zeroed in as potential targets for India’s second-largest information technology giant.
A European takeover would help Infosys add a local sales force and new lines of business as well as better compete with multinational IT majors such as Accenture and IBM.
The Western European IT market, the second-largest after North America, hit a lucrative $211 billion last year as it opened up to offshoring services.
Within the region, TCS continued to hold on to its position as the leading IT services provider by bagging a $2.2-billion UK deal from Friends Life in 2011. Wipro also emerged fairly strong despite competition from Infosys, which managed to bag two large deals in Europe.
For 2011-12, Wipro’s IT services revenue from Europe stood at $1.6 billion and accounted for 28.3 per cent of the company’s IT revenue of $5.9 billion – ahead of Infosys’ $1.5 million.
Infosys may also be in danger of losing its No. 2 software provider tag as Cognizant narrows the gap.
Industry-wide, Indian IT services companies are looking to increase their share across Europe by setting up regional offices and appointing country heads as the region offers further potential for growth.