The Hindu Business Line : IT cos eye value addition and cost cuts

Pune, Jan 9 IT companies are looking for ways to extend their value chain and bolster bottomline, according to Mr. Sudin Apte, Senior Analyst, Forrester Research. “We have to see how the recession evolves. The uncertainty and cutting costs are some of the aspects which the IT companies would have to keep in mind during 2008. It is also essential that the companies start exploring other avenues for the growth of their business,” said Mr. Sudin Apte, Senior Analyst, Forrester Research on 2008.

Clients are looking for software that would automate discrete business processes or aspects of product development. For 2008, Forrester predicts that the US technology economy would flirt with the recession but post another decent growth year. He pointed out that the economic scenario for next year starts with USGDP growth of 2-3 per cent and growth in IT spending of 4-6 per cent. The economy will be weak in the first quarter of next year and stronger as the year progresses.

He noted that theIT companies are now trying to woo mid-sized companies . “Sourcing and vendor management professionals should start experimenting with this emerging concept because it extends the traditional low-cost value proposition of offshore locations and at the same time may provide help on a particular business challenge.” He noted that in 2007 85 per cent of the top tech vendors across the globe courted industry buyers across broad industry supersets like government, financial services, and healthcare.

Smaller tech vendors have staked their claims on narrower slices of these big industry markets. “The Davids will be better at demonstrating exactly what buyers are looking for within the micro-verticals to which they’ve laid claim and will win this business 85 per cent of the time,” hesaid.

Commenting on some of the forecast that Forrester has made for 2008, he noted that the increasing rate at which hardware, software, and IT services were being commoditised is challenging tech marketers to find ways to differentiate their companies’ offerings and to find untapped markets. In 2007, tech marketers tried a few new things such as green marketing and targeting roles within client companies while also pushing some not-yet-worn-out themes such as vertical industries and the “underserved” SMB market. According to Forrester report, the green marketing and positioning of computer hardware, software, and services would reach new heights of intensity next year. Several large OEMs would claim industry leadership in energy efficiency, design for environment, and the greenness of their internal operations, it added.