IT firms in race for low-value US state deals

Posted by SRINU GUNTURU | | Posted On Friday, September 18, 2009 at 10:02 AM

Infosys Technologies, Wipro and HCL Technologies are among the software service providers that are laying foundation for the next round of multi-million dollar orders from the big UScorporations, by pitching for low-value, but politically important US state governments’ orders. Infosys, which counts JP Morgan and Morgan Stanley as clients for its services, bids for Arizona Public Service’s (APS) 400 positions, who work in its information-services department, and another 400 or so contractors to raise the staff strength for undisclosed amount.
Nine other US states, some from where politicians opposed offshoring work, are looking to outsource their healthcare operations worth over $2 billion, said Wipro chief strategy officer KR Lakshminarayana, and the company hopes to get a slice of these. Indian companies, which were used to contracts of hundreds of million-dollars at one go, are bidding for these low-value orders since their traditional clients are cutting down on technology spending and at the same time provides visibility, which would be helpful in getting big orders when tech spending recovers.
While the global government IT outsourcing market is estimated to be around $100 billion, experts tracking the sector said the US state governments could outsource projects worth up to $5-6 billion this year. States, which in the past opposed the outsourcing of work to Indian companies by the likes of Microsoft and Citigroup, are now turning to the same Indian companies, as their mission now is in line with that of the companies cut costs.


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