Indian IT firms eye emerging markets as U.S. slows

By Sumeet Chatterjee

BANGALORE (Reuters) - India's export-driven software services companies are shifting focus to emerging economies, such as the Middle East and Africa, where technology spending is growing twice as fast as in developed countries.

As the United States, which contributes more than half these companies' sales, lurches towards recession in the wake of the subprime crisis, companies such as Satyam Computer Services Ltd, Infosys Technologies Ltd and Wipro are looking farther afield, as well as to their home market, to take up the slack.

Spending on information technology in Asia-Pacific, Latin America, the Middle East, Africa and Eastern Europe is on course to hit $1.1 trillion this year, up from $964 billion in 2007, according to research and advisory firm Gartner.

Spending in 2011 will reach $1.3 trillion, posting compounded annual growth of around 8.5 percent, compared with 4.3 percent growth in mature markets, the Gartner report added.

Many Indian companies, which forged close ties with the United States having rewritten the programming code that helped overcome the millennium 'Y2K' issue, have already started diversifying their customers.

Satyam, India's fourth-largest software exporter, is negotiating a score of deals worth $10-$30 million in Asia-Pacific, the Middle East and Africa, its director Virender Aggarwal said.

"The deals we are seeing in emerging markets now are just the beginning," said Tejas Doshi, analyst at broker Sushil Finance.