Software companies seeking price hike with clients

By SiliconIndia   |   Wednesday, 29 September 2010, 09:45 Hrs   |    2 Comments
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Software companies seeking price hike with clients
Chennai: Even as discretionary spending are increasing, software firms, which remained content without any price hike for more than a year, are now pitching for price hike with their clients, reports T.E. Raja Simhan of Business Line.

Cognizant, the U.S.-based multinational IT services and consulting company, is getting price increase. Similarly, Tata Consultancy Services may also increase rate before the year-end.

"Pricing has clearly stabilized. We are now talking to clients about price increases and we are getting price increases. They are not big increases but clearly it is heading in a positive direction," Gordon Coburn, Chief Financial and Operating Officer, Cognizant told Business Line.

The clients are giving wage increases to their own employees, which is one of the main reasons that they are open to discussions with companies about costs going up and making a pitch for price increases.

According to Partha Iyengar, Vice-President and Regional Research Director at Gartner India, the price hike will be two-three percent to begin with and possibly settling around five percent by next year. "I believe we will start seeing rates go up, starting with some of the high demand areas such as SAP, Oracle and Business Intelligence by next quarter, and rates across-the-board will start going up mid-way through the calendar 2011," he added.

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