Indian software services exporters are likely to gain from a steady shift in offshoring business of their global clients amid the upheaval caused by the coronavirus pandemic. With North America and Europe contributing as much as 60% of revenues, shifting business onshore will help trim costs and boost margins at these software companies.
“Both vendors and clients are figuring out what works best in terms of the offshore mix. The fact is vendors earn more revenue from on-site services but right now everything depends on how demand works out in the next two quarters (till December). As of now, most work is being done offshore as far as customers can accommodate and may go back as soon as demand returns,” said Sanchit Vir Gogia, chief analyst and CEO, Greyhound Research.
With several global clients struggling, and movement to cloud shaving off a lot of infrastructure project revenues and automation solutions, IT spending is likely to shrink, Gogia said.
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