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Indian companies ditching IBM, SAP software for open source
Indian enterprises are increasingly moving to open-source software, recognising the cost benefits and flexibility it offers over proprietary software. A falling rupee, which increases licensing costs, is likely to hasten the shift from softwares made by companies like SAP, IBM and Oracle.

Clients ask IT firms like Infosys, TCS to bid for low-end projects through reverse auctions.
Some outsourcing customers arze asking software companies to bid for low-end back-office and application development projects through reverse auctions, adding to the competitive pressures for large companies like Tata Consultancy Services and Infosys. For established outsourcing clients such as General Electric, as well as small- to -mid-sized first time outsourcers in the US, Europe and the Middle-East, reverse auctions are bringing down billing rates by up to 40% in some instances and 10-15% on average. Unlike an ordinary auction where buyers compete to procure goods or services, in a reverse auction, sellers of outsourcing services are asked to compete with each other for a portion of a software or contact centre project.

As this auction using specialized software progresses, outsourcing firms try and outbid each other real time over the Internet, bringing down the rates rapidly during the process. For example, instead of issuing a request for proposal, appointing an outsourcing consultant, and then going through various rounds of selecting an outsourcing vendor, clients ask tech firms to bid real time on the Internet. This helps them save on both time and procurement costs. "Thank God, this is not a mainstream trend, and does not look like it will ever get there," said a sales executive at one of the toptier Indian technology firms. Reverse auction in IT sector still a niche trend.

IT companies' Q3 profit seen up, outlook hazy.
Indian software companies are bracing for a slower pace of outsourcing contracts in 2012 when they kick off quarterly earnings this week because of the lingering debt crisis in Europe, their biggest market after the United States.

Infosys Ltd, the country's No.2 software services exporter, bigger rival Tata Consultancy Services Ltd and third-ranked Wipro Ltd get about three-quarters of their revenue from the United States and Europe. "Right now the discretionary spend into the calendar year will be the key challenge to watch out, for the tech companies," said Dhiraj Sachdev, a senior fund manager at HSBC Asset Management Ltd. "There is some kind of sense or early indication that sales cycles may lengthen." Global spending on information technology will rise at the slowest pace in three years in 2012 as Europeans, worried about the region's sovereign debt crisis are cutting back on investments, research firm Gartner Inc said on January 5.

Gartner predicted global IT spending would rise 3.7 percent in 2012, down from its earlier estimate of 4.6 percent. The forecast for Western Europe was slashed to a 0.7 percent drop in spending from a previously expected rise of 3.4 percent. Infosys is expected to report on Thursday a 30 percent profit rise for the December quarter, helped by an 8 percent slide in the rupee, but the market will be focusing on any revision in forecast for the fiscal year ending March 31, comments on demand momentum, hiring and acquisition plans.

HSBC's Sachdev said the budget for technology spending by the financial services sector in Europe will be a decisive factor for Indian software companies, which compete with Accenture Plc and IBM Corp for contracts to maintain computer systems and write software applications. Accenture posted strong quarterly results last month, but the technology outsourcing and consulting company gave a cautious view of the second quarter amid the worsening global economy.
 
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