It’s no surprise that savvy international organisations are heavily investing in India’s booming outsourced software testing sector, which is poised for rapid growth at a CAGR of 56% over the next few years.
Industry analysts Gartner reported that the worldwide software testing market turns over $13 billion each year and the global market for outsourced testing services is now approximately $6.1 billion.
Indeed, India is expected to corner a 70% share, or $4.2 billion, of this market and SQS, the largest independent software testing and quality assurance provider,
is at the hub of this growth, having secured several major contracts, opening its Test Automation FaQtory™ and expanding its niche games practice. This growth has resulted in the opening of a 43,000 square feet test centre in India’s fast-growing IT hub of Pune on 22nd June 2011.
The additional facility will seat 350 software testing team members and is the first phase of a 120,000 square feet expansion over a complex of three new buildings, which will create space for 1,800 quality assurance engineers.
SQS’s expansion mirrors the growth in offshored software testing to India, where the average deal size of projects is also rising. A few years ago, average contract value of an outsourced testing project was approximately fifty to sixty thousand dollars and required only a few testers. That has now grown to between two million and four million dollars per project, which in turn means that India’s testing market required approximately 18,000 professionals annually between 2008 and 2011 to meet the increasing demand1. Software consulting firm Ovum reports that testing services will grow at a compound annual growth rate of 9.5% until 2013, which is faster than most other technology services.
Traditionally, Indian software testing providers have serviced English-speaking companies and countries. However, there is a growing shift to conquer other territories. While some Indian IT services providers are moving to Latin America and South East Asia, others, such as SQS, are also building teams in India to overcome language and cultural barriers with non-English speaking countries.
An example of this development is SQS’ base in Pune, a Tier 1 outsourcing city, which offers good infrastructure, direct flights to Europe, high availability of graduates, pleasant climate and a number of high-profile IT companies, but without the disadvantages (e.g. high costs, traffic congestion and limited room for growth).
Whereas German, Swiss and Austrian companies may have turned to Eastern Europe for outsourced IT, there is now a growing trend for these countries to outsource to Indian providers as client demand for cost-effective testing and other IT services continues to increase.
Pune already has an infrastructure for non-English speaking resources, such as the Goethe Institute and over 300 further education institutions offering between 50 and 400 seats in beginner to advanced German classes. The city is becoming more active in providing language tuition to support the German-headquartered companies that have large operations in India, including: Volkswagen, Mercedes-Benz, Demag, Kone cranes and Knorr-Bremse. Indeed, Pune is India's largest base for German business, with over 197 German companies with subsidiaries and/or JVs together with a large number of German-Indian business alliances.
SQS India has recruited Indian German-speaking resources to support offshoring from its German, Austrian and Swiss offices. This recruitment drive will add software testers to its already strong English speaking teams who work in tandem with their onshore counterparts on a daily basis.
Whether demand for services comes from Europe or the US, there is plenty of room for further growth in the Indian testing market. The growth of Managed Services in the sector is spearheading that opportunity for SQS. By combining Managed Services, a Test Automation FaQtory™ and offshoring, SQS is able to control the costs of repeatedly testing software throughout its entire life cycle. This enables customers, such as Specsavers and Sunrise, to deliver more reliable IT applications, systems and software to their users cost effectively and faster than through traditional testing methods.
The Test Automation FaQtory™, launched in May 2010 in Pune’s Special Economic Zone, is receiving significant interest from clients in Europe and the US, including Siemens PLM, a company that benefits from only paying for what is tested, access to a global delivery team and working with a pure-play independent testing consultancy.
The growth of the Indian testing market also supports the creation of specialist teams. While SQS employs 2,000 staff in total, its games testing team is 150 strong. Major clients include: THQ, Warner Brothers, AGCC and Pocket Gems. Games testing takes place from a state-of-the-art studio with all the latest equipment, and other systems required for effective defect reporting (recording setup).
SQS also has security measures in place in its labs that allow customers to send sensitive IP-related information across to SQS without any concern. In addition, the team benefits from the latest hardware in 3D HDTV, and other accessories required to test all types of games. Games testing requires some of the largest download capabilities and SQS’ infrastructure matches if not sometime exceeds that of its customers.
Finally, the SQS India team is a critical part of SQS’ global delivery model, where offshored teams work in Europe for short or medium durations to increase their exposure to cultural variations and improve their experience and skills. This helps create a single team across the whole organisation with strong personal and professional bonds. The company’s move to develop multi-lingual testing teams will underpin its growth and help it to appeal to a larger international client base.
1 The Indian Economic Times (2009)
2 Physorg.com
