Even if this addressable market slows a little, the industry has so much run way available for growth that I am not really worried from a longer term perspective.
How has the slowdown in the US economy affected the industry and iGATE, in particular?
It has affected our company a lot. For iGATE, 18 months ago, almost 11 per cent of our revenues came from the mortgage industry. Today about 2 ½-3 per cent of our revenue comes from the mortgage industry.
Some of our customers don’t exist anymore. Consequently, a lot of that work came to a standstill. Discretionary projects have been put on hold. So the flow of projects has not been as high.
It has affected other companies and the industry as a whole.
Some economists compare the 1920s depression to what is happening now. Is it as grave as that?
It is serious and severe, but I don’t think it is as bad.
Do you see light at the end of the tunnel?
From an Indian outsourcer perspective, I see light all the time. Today’s CIOs spend 16-18 per cent of their IT budgets in India and that will go to 25 per cent over the next 3 years. That itself has the capacity to increase the industry by 40-50 per cent.
Just existing customers expanding their engagement can take the market to about $80-85 billion from where it is now.
From a US consumer perspective?
From that perspective, there are a lot of challenges. The dollar has been weak. Americans have lost a lot of real wealth. It is an economy which is not growing. Because of the cut in the interest rates, inflation has been going up.
Will it not affect outsourcing?
I have always believed that good economy is good for outsourcing.
However, even in a bad economy, work will be outsourced because of the need to cut costs. Only the environment is not positive; it is more difficult in a ‘gloom and doom’ -- rather than in a happier -- environment to get work outsourced.
But the Indian industry is in a unique position… that regardless of the environment or the economy, we end up getting work because of our faster, cheaper and better model.
Is globalisation good for all the countries, especially developing countries? What’s happening to the US economy has an impact on the entire world.
I don’t think there is a choice. We live in a very interconnected world, where there are real time conversations and real time commerce.
Having said that, countries that have strong domestic market tend to be affected less, in case of a global problem.
Image: The Patagonia buidling at the iGate campus, which houses the company's BPO operations. | Photograph, courtesy: iGate
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