The CLSA survey, done with nine vendors, including the top five Indian IT vendors, says four of the nine respondents expected pricing to be stable and at last year’s levels, while five of them expected pricing to deteriorate slightly, but stay positive. The report says if demand doesn’t pick up soon, pricing may not stand its ground.
Accenture’s third quarter results announced last week, however, belie some of these fears. The multinational consulting and technology services firm posted one of its strongest quarters with a profit growth of 36 percent and announced a higher than estimated fourth quarter guidance.
While Accenture’s business cannot be compared on a like-basis with Indian offshore providers, it indicates that the business environment may perhaps not be as negative.
However, what seems more certain is that software vendors may not be able to manage better billing rates from clients. Last fiscal, software companies were able to get 3-4 percent higher billing rates on new contracts and contracts coming up for renewal.
Source : The Economic Times
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