November 15, 2003

U.S. to spend more on IT off-shoring

BANGALORE : There is good news for the booming Indian IT industry with cautious IT spending by US firms leading to more outsourcing to India in 2004.

The US is the main export market for the Indian software services sector, constituting 60-65 percent of its total exports. So, global IT majors like TCS, Infosys, Wipro, Satyam and others in the SME (small and medium enterprise) sector would benefit from this ensuing move in terms of investments, jobs and alliances.

A survey of 850 firms in North America with billion-dollar-plus revenues by Forrester Research Inc. has revealed that the overall IT spending would decline to 1.7 percent from 1.9 percent during this calendar year.

"The outlook on IT spending in the US is not so rosy during 2004. It's going to be more cautious than this year. The issue with chiefs is not what amount needs to be spent but how to ensure steady revenue growth, good cash flows and more return on investment," said Forrester Chairman George F Colony here Friday.

"As a result, 65 percent of US firms that are off-shoring and outsourcing their IT requirements from India will be doing more next year," he said.


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