Tuesday, May 19, 2009

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Outsourcing demand to pick up by early 2010: Infosys CFO

Infosys Technologies expects outsourcing demand to revive in early 2010, but the current business environment was challenging as slowing world economy crimped spending, its chief financial officer said.

India’s second-largest software services exporter is looking to spend between $200 million to $300 million to acquire firms and is sharpening its focus on newer markets such as Australia, India and China to boost growth, V Balakrishnan said.

Shares in India’s top outsourcers such as TCS, Infosys and Wipro have soared in recent weeks on hopes of a revival in sluggish business momentum later this year, but Balakrishnan was cautious about such a possibility.
“At the macro level there is some confidence back, people are slightly more comfortable, but on the ground things are still the same,” he said, referring to the global economic downturn that has battered information technology spending.

“People want a clear direction that there could be an economic recovery for them to get confidence and start spending. That is some way to go,” Balakrishnan said at the Global Technology Summit in Bangalore.

Last month, Infosys forecast its first decline in annual revenue as global demand for outsourcing slowed in a harsh economic climate, halting growth for India's once burgeoning technology services sector.

India’s $60 billion IT outsourcing sector, which provides services from software coding to managing computer networks and call centres, faces weak demand and rising competition from global rivals such as IBM and Accenture.
Balakrishnan said the pricing environment remained challenging for Nasdaq-listed Infosys, which counts Goldman Sachs, Philips Electronics, and BT Group Plc among its clients.

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