The Hindu Business Line : Looking beyond US pays off for software cos

For Infosys Technologies, Satyam Computer Services and Cognizant Technology Solution, revenues for the last 12 months from the US (or North America as the case may be), have reduced as a percentage of total revenues. Meanwhile, Europe's contribution has gone up for these companies.

The last twelve months' figures for Mastek, which has been deriving a good chunk of revenues from Europe for some time now, show that US contribution has increased while contribution from Europe has fallen.

For Wipro Ltd, Europe figures were not separately available. But, revenues from the US have increased as a percentage of total revenues.

Significantly, the company has made acquisitions in the last year or so, including that of AMS' energy practice and NerveWire, both of these in the US.

Industry watchers say revenue contribution from other geographies could see an increase since companies might want to decrease dependence on the US for revenues.

This follows the 9/11 attacks, the subsequent IT spending slump and the backlash against outsourcing.

Mr S Gopalakrishnan, Deputy Managing Director and Chief Operating Officer, Infosys, said, "We (have been) trying to proactively increase revenues from non-US geographies over the last few years. We have invested in sales and marketing in Switzerland, France, Germany and Australia."

Infosys recently acquired a company in Australia and is also recruiting local people in these geographies to provide customer relationship in local languages."

The company has also started a development centre in Shanghai to support clients in China and Japan. It is now setting up a development centre in the Czech republic to support continental Europe.

Mr Gopalakrishnan added that the increase in percentage contribution from geographies other than the US was the result of a concerted effort.

Interestingly, contributions for Infosys from India have fallen as a percentage of total revenues from 2.1 per cent for the year ended March 2003 to 1.4 per cent in March 2004.

Even absolute revenues from India fell from Rs 78.57 crore to Rs 66.23 crore in that period.

Comparing figures for the quarters ended March 2004 and March 2003, Satyam Computer Services saw a significant slump in US contribution from 78.20 per cent to 69.15 per cent. Europe's contribution increased from 10.94 per cent to 15 per cent between these two quarters.

Cognizant saw a slight increase in percentage contribution from Europe between the 12 months ended March 2003 and that ended March 2004.

According to Mr Lakshmi Narayanan, President and CEO, Cognizant, "We continue to gain momentum in the United Kingdom and in continental Europe. We have seen momentum in the financial services sector, in particular, where clients seek to leverage off-shore benefits for application development problems."

HCL Technologies' fiscal year ends in June and geographic revenue break-ups for the previous year were not immediately available.

However, for the last three quarters ended March 2004, contributions from the US stood at 60 per cent, 59.1 per cent and 58.7 per cent respectively while that from Europe increased, standing at 19.1 per cent, 22 per cent and 23 per cent respectively.