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News >> Technology >>
IT firms favor fixed contracts
By siliconindia
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Tuesday, 09 December 2008, 22:51 IST
Bangalore: IT companies have now started to increase their share of fixed contracts as against man-hour based billing. The move came in, as an effort to prevent further losses of contracts and dull the effect of the plunging rupee.
The bigger players are eyeing fixed contracts even more in the face of deteriorating global economic conditions while, man-hour based billing has been resorted to by tier-II and III outsourcing companies into the third quarter of the current financial year.
Demand conditions in the U.S. market are expected to be depressing into the next two quarters or so and as result the tech firms have to think long term by sealing in fundamental clients, reported Business Standard.
Kris Gopalakrishnan, Chief Executive Officer, Infosys expects the economic slowdown to last between 12-18 months. On the other hand, Wipro had improved its proportion of revenues from fixed-price contracts from 24.6 percent in the first quarter of 2007-08 to 31.6 percent in the second quarter of 2008-09 and plans to increase it further.
As a result, leading IT companies have deepened their focus on emerging industries like the music, media and entertainment, which hold forth new growth opportunities in digitization and archiving, print publishing, pre-press services, online information services and digital advertising. Products also seem to be another growth lever.