IT sector firms prepare for difficult year ahead

IT sector firms prepare for difficult year aheadThe Indian Information Technology firms are bracing themselves for a difficult year ahead due to the ongoing debt crisis in the European countries as well as policies in the US states that discourages outsourcing by firms.

Europe is the biggest market for the Indian software firms after the US. Service orders from the region are expected to be low in the coming quarters due to the prolonged debt crisis in the Euro zone countries.

The United States and Europe account for about three forth of the revenues for firms including TCS, Infosys and Wipro, which are the top three firms in sector in the country. The spending on information technology by firms globally is expected to record its slowest growth in the coming quarters as the debt crisis affect sentiment in Europe, according to research firm Gartner.

Gartner also said that the European firms are scaling back their investment plans due to the sovereign debt crisis in the region that has affected Greece, Portugal and is threatening to derail the larger economies of Italy and Spain.

French President Nicolas Sarkozy and German Chancellor Angela Merkel are expected to meet on 9 January to discuss ways to resolve the ongoing crisis in the Eurozone. They wish to act on the pledge among EU nations to better coordinate their fiscal policies.