Thursday, July 30, 2009

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Israeli co picks India over US for expansion

There was a time when global software firms came to India to set up development centres. That has changed. Now, they are coming to India because it is among the few markets that is still growing in an environment where IT spends are down.

Israeli firm, IDIT Technologies, a vendor of insurance software products, for instance, has chosen India over the US for its global business expansion. The firm, ranked among the leading players catering to the core software product for general insurance, believes there are better opportunities here than in the US after the ‘financial tsunami.’

“We have decided not to cross the Atlantic for several reasons which includes the financial tsunami. The general atmosphere is one that is defensive and financial services players are not in a rush to renovate their core systems,” said Moshi Shamir, vice president, IDIT. The software products firm has been present in Europe since 2000 and Mr Shamir said the financial meltdown had caused a number of contracts that were ‘ready for signature’ to be put on hold in countries such as Ukraine.

The Israeli firm has partnered with Ibexi Solutions, an Indian firm, to implement its solutions here. Implementation of the core insurance solution can take up to two and a half years and is similar to that of a core banking implementation, requiring significant knowledge of the sector as well. India will also serve as the hub for other financial destinations such as Singapore and Hong Kong, he said.

“India will see continued explosive growth in the insurance market,” said research firm Celent, which tracks IT in financial services. Celent estimates IT spending in India during 2009 to top $4.2 billion and by 2012 to cross $9 billion. While the financial meltdown may have altered some of the plans of the insurance majors to set up operations in India, IDIT believes it will not significantly change its direction.

Celent expects global IT spending by financial services companies in 2009 to decline 1.3% over 2008. Those in Asia-Pacific are expected to show the fastest growth among all regions with IT spending increasing at 8.9% in 2008 and a CAGR of 4.1% from 2008 to 2010.

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