Meltdown to slow worldwide IT spending in 2009

On a day when British Telecom announced 10,000 outsourcing job cuts, research agency IDC painted a grimmer scenario for the IT sector, predicting a sharply lower growth in worldwide IT spend. It said IT spending would grow only by 2.6% in 2009, down from 5.9%, with 0.9% growth in the US.

With the global financial crisis creeping into most sectors of the world economy now, worldwide IT spending is expected to grow by 2.6% in 2009, down from the pre-crisis forecast of 5.9% growth. According to the revised forecast from the research agency IDC, IT spending growth in the US is expected to be 0.9% in 2009, while that of Western Europe and Japan are expected to hover around the 1% range. Considering that the Indian IT industry derives around 90% of its revenues from the US and the UK market, this could mean greater pressure on revenues.

"Firms cutting their budgets by half does not mean that revenues of Indian IT companies will also go down by that number. As companies try to get the maximum bang for their buck and optimise their costs, there could be more work coming the Indian way," said Ganesh Natarajan, chairman, Nasscom. He added there could be a 15-20% impact on the revenues as the demand slows down to some extent.

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Going On Strong Testing

Outsourcing in the Indian IT sector might be on the down slide due to the global financial crisis and recession in the world economy, but the software testing industry and outsourcing in it is growing rapidly. The incessant pressure on increasing the performance of various software is ensuring that the software testing market is getting bigger. The business potential in this industry is also at an all time high.

Typically under software testing, an investigation is done to check the execution and capability of the software programmes for evaluating its performance. “The business potential in software testing area continues to grow, considering the growing complexity of software products and increasing expectations from the end-users demanding the best quality product, along with the increasing number of options available to them,” says Manish Rathi, head, delivery management (Version1.0/ New Venture Services), GlobalLogic Inc.

Software testing, according to Rathi, inherently remains complex and human intensive and software products now require strong domain experience. This has increased opportunities for businesses, which bring in new value propositions in software testing in terms of the processes, technology and business models.

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