I was going through a recent research by Gartner wherein they presented some interesting facts about Indian IT Service providers, scanning through the outsourcing lens:
1. Indian companies scale up to 70% when it comes to business expertise.
2. Off-site communication effectiveness is 46% (surprisingly on-site communication effectiveness is 78%)
3. Security Risk is 54%
4. Legal and Regulatory Risk is 60%
5. Foreign Trade and Payments Risk is 54%
6. Infrastructure Risk is 75%
7. Capacity for innovation is 3.75 on a scale of 7
8. Ethical behavior of companies are rated at 4.2 on a scale of 7
9. Government's priority for IT has been rated at 5.7 on a scale of 7

You might be wondering that with so much of not-so-positive flags, the growth in the industry has altogether a different story to tell -- outsourcing is at its peak if you look into some of the biggest deals that Infosys, TCS, Satyam & Wipro have cracked in the last 3-4 quarters.

Where is the gap ? It just can not be the cost advantage. Would look forward to hear from what people have to say.