Earlier today I looked at Tata Consulting Services’ cloud ambitions. But as Suparna Goswami Bhattacharya writing for DNA India points out in a story on the development of the international consulting market, the real action may be in Indian BPO companies encroaching on traditional service providers in the consulting and system integrations business.

IBM got into the consulting business in the early 1990s, but it wasn’t until its 2002 acquisition of PricewaterhouseCoopers that the consulting wing became a standalone business. HP followed suit in 2008 by acquiring EDS. The big issue for India business process outsourcing companies is that many of these large companies have also branched into BPO, offering their own services in India.

According to Bhattacharya, companies like IBM, HP and Accenture “traditionally viewed consulting as an effective door opener and hence, do not necessarily tie outsourcing to it.” However, the threat of new competitors in the BPO market has lead companies like TCS, Infosys, HCL, Wipro, and Cognizant to start using consulting to start drumming up more business of their own.

“Indian players have little choice but to focus on consulting and move up the value chain in order to improve margins,” one analyst told Bhattacharya.

It seems that the overall trend is for more one-stop-shop type companies, offering consulting and systems integration, custom development, BPO and now software-as-a-service. While TCS’ cloud service iON is still squarely focused on the domestic India market, don’t be surprised to see the company expand its horizons beyond the Indian subcontinent. As companies like TCS and Infosys grow, they could start to play a larger role than just being a place for outsourcing routine office work. They could grow to become international software and services juggernauts in their own right.

Photo by Pierre Bédat