Written on Sunday, 11th January 2009 by Neeta
America: 2009 software outlook, a report by Goldman Sachs is out. The predictions are gloomy. This is a bad news for recession hit industry. The year 2009 will see slashed IT budgets by all mega corporations. The IT sector will move towards consolidation. The “Also rans” companies will wind up during this turmoil. This is even bad news for all Indian IT majors like Infosys, TCS and Wipro. The three IT majors have more than 50% of their turnover coming from US and EU. So any cut in corporates IT spending will have severe repercussions on profitability of these companies.
These companies may have to look inwards and start focusing on other markets. But apart from China, there aren’t many. And with Satyam Fiasco, the going will be all the more tough. The year 2009 will be that of consolidation and a move away to open source products. But isn’t it ironical that on one side Goldman Sachs is talking of consolidation while on the other hand we are putting our money behind open source products.
The consolidation will be evident in corporate sourcing. While individual buyers and SMBs will go for open source products. Goldman Sachs have predicted good year for Red Hat. But having said so the coming times will see less and less contracts being chased by more and more service providers. This will create pressure on prices and buyers will get benefitted. This may be the precise reason Goldman Sachs have predicted 8% decline in tech investment.
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Tags: America 2009 software outlook, Consulting, Goldman Sachs, India, Indian software companies, IT spending 2009, Open source 2009
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