Recovery of US economy to bolster prospects for Indian IT firms
Most recent reports pouring in from the various international technology research firms suggest that presently there is a potent bounce back in information technology expenditures in the United States as well as several other key economies during 2010. The projection is founded on the revival in the demand for IT products and services during the December 2009 quarter as well as expectations regarding the revitalization of the US economy and industries using IT products and services.
This trend, in turn, endorses the market’s anticipation of revival in business essentials for the Indian firms exporting IT products and services. In fact, it is projected that the leading Indian IT firms will witness four per cent to six per cent growth in volume during the March 2010 quarter. In addition, industry analysts are of the view that Infosys, India’s second largest IT firm in terms of revenue, will plan ahead a lesser double-digit growth in income for the fiscal year 2011, which is actually a lot more powerful compared to the projected five per cent upturn for the fiscal year 2010.
According to an article published in an Indian business daily, the recent outlooks presented by global research firms, such as Gartner and Forrester Research have authenticated the anticipation of the Wall Street. For instance, Gartner predicts an augmentation of 5.3% in worldwide IT expenditures during 2010 in comparison to the 4.5% fall during 2009.On the other hand, Forrester predicts a more rapid increase at 7.7% during 2010, which will primarily be propelled by a robust growth of approximately 8.4% in the US requirements and an additional 8.3% leap in the Asia-Pacific region. In fact, together these markets contribute around 66% of the worldwide IT procurements worth $1.5 trillion.
Indian IT and BPO service providers to foreign clients will take heart from the fact that the different segments of the economy in the United States, including manufacturing; finance and insurance; healthcare and utilities and telecommunications are projected to spend additional amounts on their IT requirement during 2010. Incidentally, these sectors had curtailed their IT expenditures by six per cent to 10 per cent during 2009. What is more significant is that Forrester estimates that individually all these sectors would possibly expend around 17 per cent of their respective IT budgets on outsourcing, which is expected to comprise nearly 50 per cent of the proceeds of the leading Indian IT firms.
According to the projections made by Forrester, the worldwide outsourcing will attain a record high of $240 billion during 2010 – a rise of 5.3% compared to the one per cent fall in this regard during 2009. At the same time, Forrester cautions that most investors will give preference to projects that provide cut-rate benefits. Henceforth, the investors are likely to strictly pursue the counseling on income prospective, recruitment policies and project pipeline before they make a decision regarding an investment.