The Hindu Business Line : Software firms earned more per client last fiscal

SOFTWARE companies have squeezed out more revenues per client for the year ended March 2004 compared to the previous year, as evident from statistics. (See table - Revenues from top ten clients have been excluded since these tend to skew statistics.)

Among the heavyweights, Wipro Technologies has recorded the largest increase - of 24 per cent - in average revenue per client between March 2003 and March 2004. Given that the company had a slump in 2002- 2003, this is a significant jump.

iGATE Global Solutions has posted a jump of about 72 per cent on the same count for the recently concluded year. Only Cognizant has had a slump in revenue per client. Industry observers say that this would be temporary since Cognizant had made a few acquisitions last year (including Ygyan, Aces and Infopulse). Simultaneously, all companies mentioned in the table have experienced a slump in percentage revenue contribution from the top 10 clients between March 2003 and March 2004. This is seen as a good way to reduce risk by not depending on a handful of clients for revenues and revenue growth. Only Infosys has seen its figure remain more or less the same. These companies have also seen revenues from clients other than those in the top 10 growing faster. iGATE saw the greatest difference between revenues from the top 10 clients and that from the rest in terms of growth percentage points. Again, comparisons between March 2002 and March 2003 earlier revealed that for several companies, absolute revenues from the top 10 clients were growing faster than that from the rest. Industry observers say that if companies have been able to maintain or decrease percentage contribution from the top ten clients and if the number of $1-million clients has grown, then it is a positive sign. Even if the percentage contribution from the top ten clients has gone up , and the number of $1-million dollar clients has gone up, it can be considered positive, as long as the average revenues per client has increased, they say.

Infosys increased its $1-million client numbers from 115 in March 2003 to 131 while clients who contributed atleast $5 million went up by 10 to 51. Significantly, HCL Technologies saw its March quarter numbers go up to 104 $1-million clients compared to only 67 the previous March.