The Big 5 of Indian IT— Infosys Technologies Ltd, Wipro Ltd, Tata Consultancy Services Ltd, Satyam Computer Services Ltd and HCL Technologies Ltd—have declared their results for the March quarter, the last of 2007-08 for all but HCL.
International comparisons are readily available, courtesy recent announcements by Cognizant Technology Solutions, Accenture Ltd and International Business Machines Corp. And outsourcing consultant TPI Inc. recently put out its estimate for business in 2008, which essentially claimed that there was no cause for concern that IT spends would slow.
Illustration: Jayachandran/ Mint
Four broad trends emerge: Events in the US will have a short-term impact on the revenue growth of Indian IT firms; the second half of 2008-09, beginning October, will make up for the first part of the year; customers will outsource parts of their business that they haven’t done thus far in an effort to prune costs; and, even among large firms, some such as TCS, have been hit more and will be hit more than others.
On the stock market, shares of all IT firms rose after Infosys’ results and, on Tuesday, shares of TCS slipped to their lowest since the stock listed in 2004.
If people looking for a message in all this have found the going difficult, it is simply because there is none.
Not one firm has presented a strategy for the future that explains where the business of software is headed. A financial results announcement might not be the best time and place for this, but judging from the answers at press conferences and analyst calls, none of the companies has a long-term strategy worth writing about (either that or they are playing their cards pretty close to their chest).
A few quarters ago, some of these firms were talking about the evolving software-as-a- service business model (where companies pay only for what they use) and their coming move to a “platform” approach where one common platform delivers a range of IT and back-office services. Both would have been good strategies for uncertain times, but none of the companies has spoken of them.
It could be that the slowdown has engendered a kind of allergy to strategy where short-term survival matters more than long-term success.
It could also be that the companies do have a strategy, but don’t want to talk about it just yet. Which is why we say: Show us the strategy.
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