Tata Earnings Show Offshore Outsourcing Moving Beyond Software DevelopmentTata Earnings Show Offshore Outsourcing Moving Beyond Software Development

In a sign that offshore outsourcing is moving into new areas, Tata Consultancy Services reported quarterly earnings Monday that, for the first time, show software application development and management making up less than half its revenue.

Consulting, business process outsourcing, and infrastructure services accounted for more than 50% of TCS's revenue in its quarter ended Sept. 30, prompting chief operating officer N. Chandrasekaran to call it a "landmark quarter." BPO refers to non-IT related services, such as insurance claims processing, credit-card processing, and payment management.

In the area of infrastructure management, TCS remotely manages the computing infrastructures for retail companies, computer manufacturers, and Wall Street firms, Chandrasekaran said in an interview with information. The company has offered infrastructure management outside of India only since 2004. "Those deals used to be a half-million dollars; now we're seeing deals of $200 [million] to 300 million," Chandrasekaran said.

TCS's net income for the quarter was $313 million, up 45.1% from the same quarter last year, and revenue was $1.42 billion, up 45.2%. For the first half of the year, net income was up 50% over the previous year to $604 million, and revenue was up 44% to $2.7 billion.

The numbers also show that India's talent shortage and the appreciating rupee haven't had a big impact on TCS's ability to keep growing. CFO S. Mahalingam said in a statement that TCS has "absorbed the impact of the rupee appreciation and improved our profitability."

TCS said it's improving profits by improving productivity and moving more work offshore into new regions of the world where the competition for talent isn't so tight. It's relying heavily on young talent, too. The company said it hired 12,523 employees in the quarter, of which about half were "trainees." TCS said it hired 966 employees in overseas subsidiaries and branches.