Commentary: Reason for optimism
The need to outsource software development should help sustain Indian software vendors such as Infosys, despite the world's political and economic troubles.
The need to outsource software development should help sustain Indian software vendors such as Infosys Technologies, which posted strong earnings despite the world's political and economic troubles.
The U.S.-led attacks in Afghanistan will likely affect India's software industry, if only for a short while, but assessing the risk to vendors located in India is not simple. As the global economy slows and business travelers become reluctant to go overseas, many companies in countries such as India will likely suffer a severe drop in business.
However, even in hard times, successful companies find a way to make progress. Global troubles have not yet squelched growth for Infosys, a leading Indian software services firm. Earnings for its fiscal second quarter, ended Sept. 30, surpassed its own expectations. Infosys recorded revenue of $137.2 million, up 40.1 percent from $97.9 million in the year-earlier period. Earnings per share rose from 25 cents in the year-ago quarter to 31 cents in the just-ended quarter. Infosys restated its projected earnings for the rest of the fiscal year.
In addition, Infosys closed large deals with 11 new customers after the terrorist attacks on Sept. 11. Its brand likely helped, as strong brands tend to do in uncertain times.
Those attacks did not prevent the signing of some deals already well along in the pipeline, and other Indian vendors have also reported signing significant deals since then. Nevertheless, vendors and customers have indicated a slowing of contract closings--often due to the enterprise's disinclination to allow travel to India.
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(For a related commentary on a leading Indian services provider, Wipro Technologies, see Gartner.com.)
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