Software Testing Services key component of revenues for Indian IT Companies.

1. Analysis & Outlook
Rajesh Prabhakar Analyst Bio @ http://analysiscasestudy.blogspot.com/
The worldwide software testing outsourcing market is forecasted to reach US$ 50 Billion in
revenues by 2020 form 2010 revenues of US$ 30 billion and India is expected to capture major
chunk of this growth according to a NASSCOM report on the testing industry. India is estimated
to account for US$13-15 Billion by 2020 and US companies outsource software testing worth
US$ 10 billion every year. Indian Software vendors like TCS, Infosys, Cognizant Tech, Wipro,
HCL Tech, etc. have significant part of their revenues contributed by software testing services
and according to NASSCOM estimates in the year 2012software testing revenues earned by
Indian companies is about US$ 3.2 billion. According to analyst Nelson Hall, the global testing
services market was US$8.4bn in 2011, and predicts an average 9% growth every year until 2016
even though the growth is flat in 2012. India has close to 180,000 testers available who are well
trained and Nelson Hall predicted Indian-offshore based delivered testing services grew by 8% in
2012 while onshore-delivered testing services declined by 5%.Forrester Research estimates that
the demand for outsourced software testing will account for 28 percent of IT budgets in Europe
and the U.S. within two years.Cost savings and need for professional testing services are the
major growth drivers and requires significant investment in terms of tools, people recruitment
and automation. Testing is a human resource-intensive activity and despite of automation work,
people are required.
Business Organizations across the globe rely on applications both internet and mobile based to
provide services to their customers and also sell their products to the customers. Applications
have to be tested for reliance and functionality before launching them for customer use as any
failure of such applications will drastically affect the business.Business critical applications have
to be tested preferably by third party software vendors with both onshore and offshore
capabilitiesthat help to reduce the high costs associated with software failure and without the
huge investments needed for rigorous in-house testing processes.Software testing is one of the
most important tasks for 91% of IT departments and almost all believe it is crucial to outsource
this activity, according to a recent report from analyst company Pierre Audoin Consultants
(PAC).In a typical project, 70% of the budget will be for development and 30% will be for
testing. “The conventional model for procuring testing services is for the customer to provide a
request-for-proposal, then a bunch of sales guys call them up, a lot of presentations go back and
forth, and there’ll be negotiations and finally a contract,” explains Sanjay Seth, Manager for
Wipro’s testing services. “This entire process can take anything from 90 to 270 days. That’s fine
if you are doing a multi-year engagement and it is a transformational deal. But there are many
kinds of testing that can be done in days or weeks, so you don’t want to go through a nine-month
sales cycle.”
The market for software testing services is expected to continue its growth and Indian software
vendors definitely have an advantage as they have continuously delivered high quality services,
achieving the defined user standards and increased adoption of differentiated growth strategies
by testing vendors have helped them in keeping up growth. According to Dr. BhartiRao, Global
Software Testing Services Outsourcing Market expected to continue growth in 2013

2. Analysis & Outlook
Rajesh Prabhakar Analyst Bio @ http://analysiscasestudy.blogspot.com/
Head, Independent Testing Services & President, Blue 7 Solutions (JV Company of Blue Star
Infotech), “the face of testing services is changing for the past few years. The ratio of Basic
Functional Testing to specialized testing services was 80:20 percent in the past. This is rapidly
changing to 60:40 and further expected to change to 40:60 in the coming years. For e.g. If we
consider testing of a travel application then, in addition to traditional functionality testing, we
also need to cover - Usability Testing for ease of navigation, visually appealing UI and
simplicity of overall design, Compatibility Testing for validation against different browser-OS
combinations, Performance Testing to verify application response under Load and Stress
conditions, Integration Testing to check seamless integration with external components like
social media, Security Testing to make the system full proof for some critical components like
payment Gateways, Mobile Testing if the application is to be supported on multiple mobile
platforms, Automation Testing to increase the overall productivity and accuracy of the test
executions.”
But the Software testing market is also changing with the advent of new technologies like Social
Media, Mobility, Analytics, Big Data and Consulting. Particularly Indian vendors have to build
capability in the mobile application testing segment due to the rapid growth in the number of
mobile phone applications. Also big Indian vendors their focus and providing cloud based
testing; testing-as-a-service; automated testing and testing in domain-specific niche services.The
industry is still suffering from lack of highly skilled testers and both the industry and government
have to work on this together by developing the educational and training systems required. “With
prosperity come challenges. Increasing offshore salary costs are fast diminishing the labour
arbitrage. Organizations have to think out of the box such as process improvements, re-use,
automation, risk based testing, etc. Many have turned towards harnessing non-engineering
graduates towards testing work, such as BSC and B.Com. Along with the relatively lesser labour
costs, this has an added advantage of domain specialization which a non-engineering graduate
typically brings to the table, “according to Dr. BhartiRao.India also has to worry about the other
low cost destinations like Philippines, Poland and other eastern European countries that are
becoming more low cost compared to India and Indian vendors are overcoming this by setting up
development centers in the above mentioned countries.Clients are looking at testing service
providers to contribute to their business outcomes, have domain understanding of the client
businesses and accept the accountability and responsibility. Most of the Indian vendors have
realized this fact and have set up large testing service departments that also serve as “Centers of
Excellence”, and focus on innovation, training and competency development specific to testing.