Indian Outsourcing Firms Outpace Western Rivals; Wipro Latest To Report Double-Digit Sales GrowthIndian Outsourcing Firms Outpace Western Rivals; Wipro Latest To Report Double-Digit Sales Growth

Businesses in the United States and Western Europe appear to be allocating more of their IT services budgets to offshore firms, if recent financial results of major outsourcing vendors are any indication.

Late Tuesday, India's Wipro Technologies said revenue for its second quarter, ended Sept. 30, grew 26% to $568 million. In posting a double-digit sales gain for the period, Wipro joined fellow Indian firms TCS and Infosys, which reported similar results last week.

By contrast, IBM's vaunted Global Services arm on Monday said sales grew by a mere 3% in its third quarter. In August, EDS said its second-quarter revenue dropped 1%. The only major Western IT services firm that's even close to matching the growth seen by the offshore players is Accenture, which recorded a 15% revenue gain in its most recent quarter.

Part of the problem for the Western companies may be their definition of what constitutes acceptable financial performance. Noting that IBM's overall third-quarter revenue increased 4%, CEO Sam Palmisano said the company had a "good quarter."

If 4% growth is "good," then what do you call a 26% sales increase? Wipro chairman Azim Premji called it merely "solid." It appears these two execs have somewhat different expectations for their companies.

Wipro also reported strong growth in second-quarter net income, up 23% to $107.1 million. It also added 39 new clients in the period, including two new business-process-outsourcing customers.