Competition to increase
IT companies maintain that they aren't really feeling the pricing pressure yet. "There have been sporadic cases where the client has come back to us, to renegotiate the prices. But, on the whole, the pricing discipline is intact," confirmed a CFO of one of India's largest IT companies.
But, analysts believe that sales cycles are bound to get longer and it is a matter of time, before the companies feel the pricing pinch too. With consolidation taking place in the US financial sector at the moment, competition is likely to further increase between IT vendors.
Take for instance Bank of America (BoA), which would need two sets of IT vendors after buying out Merrill Lynch. Analysts say that BoA is an important client for Infosys, which places the latter in a relatively advantageous position compared to TCS and Satyam, which were IT outsourcing partners for Merrill Lynch.
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