• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Bharat Kumar

Interestingly, smaller companies have been able to restrict client loss to nearly 50 per cent or a lesser percentage of new clients. Polaris and VisualSoft are examples.

CHENNAI, May 3

SOFTWARE companies continue to add or lose clients at almost the same speed they lose or add clients, depending on how you look at it.

While this was true for the three quarters ended December 2001 and companies began to hope for a recovery in the fourth quarter of the year, this quarter has been only slightly better, if anything.

Interestingly, among the top few, Infosys is the only company to have seen a slump in the number of active clients, from 299 in December 2001 to 293 in March 2002. For the year ending March 2002, it has lost 96 clients while gaining 116 new ones.

Wipro Technologies had a net addition of one client in between December 2001 and March 2002. In the year, it lost 98 while gaining an almost-equal 107 new clients. Mastek became unique with losing as well as gaining 52 customers in the year. HCL Tech gained 21 clients in the latest quarter while losing 19. The attached table shows the figures for other companies.

Interestingly, smaller companies have been able to restrict client loss to nearly 50 per cent or a lesser percentage of new clients. Polaris and VisualSoft are examples. Industry watchers attribute this state of flux to the fact that clients of software vendors are still facing uncertainty in the global market.

Says Mr Bhupinder Ahuja, an analyst with Deutsche Securities in India, ``It is true that things have not settled down yet. The fact remains that there will be smaller clients — say a small telecom client who is struggling, for example — who could cut business areas or even wind down. On the other hand, the vendor could become disinterested in the client if he is not giving any significant business. This trend will continue for some time.''

He adds that this could be related to the increasing percentage of revenues from top few clients in most cases. In some cases, clients who have a long relationship with the vendor could opt for further outsourcing and hence dish out larger orders, thus contributing more to the top line.

According to Mr Ahuja, ``even the recruitment that has happened (recently) is for these needs and for business from large request for proposals (RFPs) being talked about recently.'' And true enough; the contribution to revenue from top ten clients has increased for most players.

For Infosys, it has gone up from 38 per cent in December 2001 to 38.3 per cent in March 2002. For Satyam Computers, it is 54.51 to 55.87; HCL Tech's rose from 36 to 38, Polaris' went up from 66 to 67.5, while Mastek saw a rise from 61 to 68 per cent. Interestingly, Wipro's alone slumped from 46 to 41 per cent. The contribution from the top 5 clients also slumped from 34 per cent in December 2001 to 28 per cent in March 2002.

Send this article to Friends by E-Mail

Stories in this Section
HCL Insys upbeat on notebook market

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line