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Started by : Radha Sharma, Sales/BD Manager, TCS   09 30 2008 21:14:53 +0000
Industry : IT ServicesFunctional Area : B2B Sales(Sales & Marketing)
Activity:  28 views;  last activity : 07 06 2010 20:18:09 +0000

Turbulence in the global financial markets could translate into nasty surprises for the Indian software industry. To know how these various developments are likely to impact the sector and companies, and what can be expected over the next one year, let us put our thoughts in place and contribute.

 
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1 2 3 4 5
1 Demand slowdown
2 Recession
3 Competition to increase
4 Time to get leaner
5 Value Add / ROI
6 Oppertunity to enter

Demand slowdown

idea posted by Radha Sharma Sales/BD Manager, TCS


The Indian IT vendors have been facing challenging times as a result of uncertainty in the US and Europe for well over a year now. Mortgage companies like Freddie Mac, Fannie Mae and now AIG getting nationalized is bad news for the Indian IT companies as the outsourcing could be reduced due to political interests. I have some facts to back my point. Six months after Bear Sterns went under and was acquired by JP Morgan, the latest series of events in the US financial sector would further slow down the demand for IT services. Expect the $1-1.5 billion that Lehman Brothers typically spends on its IT networks annually, to be cut by at least half as its bidder, Barclays, tries to rationalize and reduce overlaps.

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Recession

idea posted by Darpan Sinha Tech Architect, Royal Bank of Scotland

More that 70% of the business of IT comes from US and in that also a large part was Finance and Insurance with the problems in US market effect in Indian IT co's have already started I foresee the same 2000 type of problems arrising but its more grave this time

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Competition to increase

idea posted by Rajender Malhotra Sales/BD Manager, IBM


IT companies maintain that they aren't really feeling the pricing pressure yet. There have been sporadic cases where the client has come back to us, to renegotiate the prices. But, on the whole, the pricing discipline is intact. But, I believe that sales cycles are bound to get longer and it is a matter of time, before the companies feel the pricing pinch too.

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Time to get leaner

idea posted by Rajesh Kona Sales/BD Manager, iGate Global


I believe there will be major strategic changes on the operational front, the companies will try to protect their margins by condensing their hiring plans and increasing the utilization rate (currently ranging between 70-75 per cent), hiring fewer laterals (individuals with work experience), moderating the growth in wages in the range of 8-12 per cent and keeping a check on their selling, general and administration (SG&A) expenses.

 

 

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Value Add / ROI

idea posted by Sanjay Owner, KPO

As you have rightly titled "wall st tsunami " i think indian IT is in for major changes .Firms will have to realign their service delivery value preposition.Pure ROI will sell...party appears to be over.

Sanjay

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Oppertunity to enter

idea posted by Bhuneshwar Ram Tripathi Head/VP/GM-Production/Manufacturing, Bhatia International Ltd.
The stocks will not be giving 40 to 50% return,but the valuations have become attractive and present it is an oppertunity to enter. The front line companies will maintain their clientel and shall gain due to weakness of Re. against $
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Thanks for sharing Mr.Mathew
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