Whither IT Sector in 2012 ?

As the third quarter results season comes to an end , more questions have been asked than answered - is the ongoing slowdown in Europe going to be the bane or boon of the IT sector this year, is the opportunity to bid for the 50 B USD plus contracts that will be renewed soon a benefit for India firms particularly the nimbler Tier 2 ones and finally is this period of uncertainty going to enable the firms in the software sector to further strengthem their porcesses and quality with attrition at an all time low ?

The answers will unfold over the next two to three quarters. Early signs indicate that the European economic problems will not go away in a hurry and if Greece finally goes down and Italy Ireland and Spain get into a trough with weak growth also evident in UK and Germany, the situiation can become grim. The redeeming factor seems to be the US where there is a new confidence emerging that even if unemployment does not improve substantially, 2012 will be a decent year for the corporate sector leading to strengthening of the fortunes of all outsourcing companies.

The opportunity for being at the forefront of the action when contract renewals occur has always been there for the Indian top tier against the global majors and now for the 300 to 2 billion dollar firms against the top three Indian incumbents. However transitions are not automatic and contracts will still be won on real and perceived capabilities. Firms which have a "point of view" and are clearly able to articulate their differences vis a vis competition stand to gain in the churning that will play out over the next two years.

Finally, there is no doubt that a climate of calm pervades the Indian IT sector today. Our own company has seen attrition levels now kissing the single digit mark for the first time in half a decade and the critical talent that we seek to retain at all costs have been steadfast in their loyalty to the organisation cause. This certainly provides an opportunity to embark on intellectual property creation, expand relationships with customers and invest in training people in emerging areas like cloud mobility and enterprise social media to surprise and delight customers with a new range of offerings.

All in all these are interesting times. More power to the brave as we chart our corporate ships into the new year !