Until very recently, software shops couldn't hire enough - despite the high bench figures, the margins justified idle capacity that could be deployed on demand. Suddenly, as customers around the world (especially the US) put their technology buying plans on hold, despite the weakly optimistic statements, companies are now being forced to look at markets they had left alone for a variety of reasons.

While price-sensitive markets (read the USA) lapped up Indian software professionals and companies that offered cost-effective (read cheap) outsourcing options, Europeans have proved to be a different dish altogether.Even today, the USA accounts for 60 per cent of the total software exports from India, while Europe buys only about 23 per cent (around $1.4 billion of the total targeted exports of $6.24 billion when the books are closed this year), according to Nasscom president Dewang Mehta.

So what are the inherent obstacles to doing business with EU companies and what are Indian software companies not doing right in Europe?
According to France India Trade chairman Tobby Simon, who builds bridges for Indian companies to do business with European firms, there are several key factors. And, surprise! Contrary to popular perception, language is not a big problem at all. The fascination with the US market was so far based on the simple precept of making a quick buck through contracting (read body-shopping), or even sub-sub-contracting, wrapping up the project and getting out to hunt down another prospect.

Markets like Europe and Japan are however a bit different. Enterprises here work on the premise of developing long-term relationships. And that's the toughie. Mr Simon says Indian software companies tend to go in with a `trading outlook'. ``They need to understand the European customer already has a supplier and you need to educate him about the value of your offering and give him breathing time".

Another problem, according to him, is that European customers may equate low price with low quality...so if the communication falls short of the mark, the Indian company's price positioning could actually work to its disadvantage. Consider this: As per the Digital Planet report for the World Information Technology and Services Alliances, Europe accounted for 29 per cent of the $2 trillion market for technology solutions in 1999.

Destination Europe: IT cos need to change their attitude This is expected to grow to $3 trillion in four years, according to Nasscom president Dewang Mehta. That's a pretty big pie of which we aren't carving out a big enough piece.

Digital India's head of marketing Ashish Basu believes a strong sales strategy is the key to improving penetration. "In Europe, the key bottleneck for growth, assuming you have high quality delivery capability, is the right kind of sales force; not easy to move people from India and have them related to the European customer environment and business culture as well as language differences."

"Invest in hiring local people or European residents of Indian origin well versed in the European IT industry and having a network of contacts. Nasscom can help by generating more publicity and raising the awareness of the Indian software talent. Certainly, companies can participate in European IT events to raise awareness and generate some leads," Mr Bas said.

Mr Mehta is upbeat on the growth prospects for Indian IT companies in Europe. ``185 of Fortune 500 companies outsourced their software requirements to India. As of date, out of 90 companies contacted, 76 have indicated continued increase in outsourcing, whereas 10 companies have indicated decrease and 4 have not been able to commit their decision.''He believes many companies will continue to increase their outsourcing of software development to India, although he wasn't certain about the growth rate.