'Outsourcing backlash won't impact US tech spending'

Wednesday, 21 January 2004, 08:00 Hrs
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BANGALORE: The continuing backlash on outsourcing to India and the upcoming presidential elections in the US will not have any bearing on technology spending by American firms, says a senior Wipro official.

Wipro vice-chairman Vivek Paul, who is mostly based in the US as he looks after the North American IT market, told IANS here Wednesday that the US economy was on the rebound and tech spending had picked up momentum.

"The outlook for tech spending is 2004 is bright. The spending pattern will not be affected by the presidential elections later this year. US firms will continue to invest in technology and outsourcing of their IT requirements, especially services.

"At the same time, as publicity about offshoring or outsourcing around that will be very risky in terms of backlash, firms would prefer to do it (spending) quietly. They will be cautious on making public what and how they are doing the spending," Paul disclosed.

Upbeat over the record performance of the company's global IT services and products division, Wipro Technologies, for the third quarter of the current fiscal, Paul said the year ahead would be growth-oriented as the fundamentals continue to be strong.

"There has been a revival in consumer as well as technology spending since the last two quarters in the US economy.

"While backlash on the loss of jobs or increase in outsourcing is certainly an issue, American firms will continue to maintain the trend as such decisions have a direct bearing on their bottom-line," Paul asserted.

Of the 2.42 billion ($53 million) revenue generated by Wipro's global IT business during the quarter (Q3) of the current fiscal year (2003-04), the US market contributed a whopping 70 percent, up by two percent year-on-year.

Of the remaining business, Europe generates 25 percent and Japan five percent.

"We have witnessed double digit sequential revenue growth for the second consecutive quarter. In technology, we have posted 13 percent sequential growth, 10 percent in the IT business.

"In service lines too, technology infrastructure services grew by 17 percent, package implementation by 14 percent and business process outsourcing (BPO) by a high 29 percent," Paul affirmed.

Source: IANS
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