IT spend strong amidst declining profits in US

Indian IT EmployeesDespite the ongoing sluggishness in American corporate profits (BFSI segment), overall US IT spending remained robust in 1Q08. Most Indian IT services companies have acknowledged delays/slowdown in ramps especially for Financial Services customers in 1H08, but expect a recovery in 2H08.

Indian IT players continued their market share gains in the global arena with 35% YoY revenue growth in Q1-2008. Offshoring is likely to be the mega-trend for IT Services and expect Indian IT players to continue to gain market share.

Technology spending as a percentage of profits peaked in Q1-2000 and has constantly declined since then and is currently holding at 25-30% levels.