Despite green shoots emerging for the Indian IT industry, Cognizant is still weary about growth prospects citing concerns around US Government’s anti-business stance.
This concern comes at a time when Nasscom has stated confidence in US markets and has revised its growth guidance to 15 per cent for the 2015 fiscal.
“More than regulations, it is about the Government’s anti-business stance that worries our clients – whether in financial services or other sectors,” Malcolm Frank, Executive Vice-President, Strategy and Marketing, Cognizant, told
Frank’s concern is shared by the Gallup Economic Confidence Index, which has pointed out that confidence of more than 55 per cent of Americans in their economy has worsened this year when compared to 2013.
Gallup is an American agency that conducts regular polls regarding Americans views on current economic conditions.
Key contributorThe Indian IT industry still gets around 60 per cent of its revenues on an average from the US markets and Cognizant gets around 70 per cent from this market.
“While Fortune 500 companies are sitting on cash piles in billions of dollars, there is no confidence as they are unaware of what the Government might do,” added Frank.
Industry watchers like Anupam Govil, Partner at IT Consulting firm Avasant, opines that US companies have changed the way they operate as technology has allowed them to reduce dependence on workforce, which has resulted in a jobless recovery.
Interestingly, at the end of December 2013 quarter, all CEOs of IT majors such as N Chandrashekaran of TCS, S.D. Shibulal of Infosys and T.K Kurien of Wipro have said that the situation is better than what it was when compared to the 2012 fiscal.
Bets on SMACHowever, the company is bullish that despite these concerns, opportunities are coming up in areas such as social media, mobility, analytics and cloud.
While the US continues to be a concern area, companies like Cognizant are starting to get more bullish on Europe which is in the midst of a slowdown too.
The UK, Ireland, Nordic regions, Switzerland are some of the areas that are opening up more to outsourcing but Italy, Spain, Portugal and Eastern Europe are still not open to it, added Frank.