For the Indian IT industry, 2009 was a landmark year. It started with the mind-boggling confession of Satyam chief R Raju about the fraud perpetrated at the company for many years and saw the Centre quickly jump in and play saviour by not only saving Satyam from collapse but also protecting India Inc?s global image. Now it?s going to be a year since Raju decided to shoot off that explosive letter to the stock exchanges, Satyam is now Mahindra Satyam, post the acquisition by Tech Mahindra.
While the investigating agencies are still trying to join loose ends and skeletons are still tumbling out of cupboards, Mahindra Satyam has an uphill task to restore the company to its past glory. If it has been successful in retaining Satyam?s clients, the challenge now is to stop the exodus of senior executive from the company. An even bigger one is to quickly adjust to the changed IT landscape, where deals are fewer and competition cut-throat.
Satyam apart, for the first time in years, the industry saw its growth drop down to single digits from the earlier 30-35% (Nasscom has predicted 4-7% growth in the current financial year). The deal pipeline dried up to a large extent, clients slashed existing budgets and demanded heavy price cuts. Moreover, currency movements played havoc with the bottomlines. Though the situation has yet to stabilise completely, tech CEOs are more optimistic about 2010. Most of them expect clients? IT budgets for this year to be between flat to marginally down, which is better than the steep cuts they saw last year.
Moreover, the downturn altered IT firms? strategy in many ways and this was for the better. As part of their quest for untapped emerging markets, there was a like-never-before focus on the domestic market. The SMB space, which received little attention earlier, became quite sought after. The fact that clients became wary of large capital investments came in as a blessing in disguise for operational expenditure driven models like ?pay as you go? and software as a service along with virtualisation and green IT. Thanks to the economic crisis, these future technology platforms emerged out of their shells and are here to stay.
?surabhi.a@expressindia.com
