'Five Indians among seven outsourcing billionaires'
A Forbes magazine survey says that five of the seven billionaires whose primary source of wealth is outsourcing are Indians.world Updated: Jun 01, 2008 02:25 IST
In a clear indication that India dominates the outsourcing business in the world, a Forbes magazine survey says that five of the seven billionaires whose primary source of wealth is outsourcing are Indians.
Three of the five - NR Narayana Murthy, Nandan Nilekani and Senapathy Gopalakrishnan - are from Infosys Technologies. The others are Azim Premji of Wipro and Shiv Nadar of HCL Technologies.
Forbes notes that all of these five made their billions through providing global software and IT services. In contrast, the other two outsourcing billionaires, Terry Gou and Barry Lam, both of Taiwan, run companies specialising in contract manufacturing in the electronics sector.
Premji tops the list of outsourcing billionaires with a net worth of $12.7 billion. He is the chairman of Wipro, provider of integrated business, technology and process solutions. The software services outsourcing company acquired a business process outsourcing arm in 2002, the business magazine said.
Nadar's net worth is $3.9 billion and HCL Technologies, co-founded by him, is an outsourcing electronics, computing and IT software company.
"With clients like Cisco, Boeing and IBM, HCL is one of India's leading global IT services companies that emphasises 'transformational outsourcing', or working with clients to re-define the cores of their businesses," Forbes wrote.
Narayana Murthy, with a net worth of $1.4 billion, is now chief mentor and non-executive chairman of Infosys, a software services company he co-founded with only seven people and $250. Infosys is now a global leader in IT and consulting.
"Infosys pioneered the global delivery model of outsourcing. The premise is to take work to the location where the best talent is available; this philosophy helped stimulate the rise of offshore outsourcing and, of course, added to the company's wealth," the magazine reported.
Nilekani, with a net worth of $1.1 billion, is a co-founder of Infosys who ran the company as chief executive and managing director until June 2007, when he became co-chairman.
Gopalakrishnan, with a net worth of $1 billion and another Infosys co-founder, was president and chief operating officer of the company until last June when he took over from Nilekani as chief executive and managing director.
Terry Gou (net worth: $6.1 billion) is chairman of Hon Hai, that has capitalised on the popularity of iPods, cellphones, game systems and other devices the company assembles.
Barry Lam (net worth: $1.3 billion) runs Quanta Computer, the largest notebook original design manufacturer that boasts clients like Apple, Hewlett-Packard and Dell.
These seven billionaires, Forbes clarified, made their fortunes through a phenomenon called offshore outsourcing. It is a combination of outsourcing and offshoring, two similar concepts that are often lumped together.
By definition, outsourcing is to purchase or subcontract from an outside source; while offshoring can be done both within and outside a company.
"The economics behind offshoring are really compelling, and customers usually do it for three reasons - they want specialized firms, want to cut costs and gain access to talent or specialised skills," the magazine quoted Robert Kennedy, a professor at the University of Michigan Business School, as saying.