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.
LESS IN US:
India's software and back-office outsourcing industry is on course to ring up sales of $64 billion in the fiscal year just ended, up from $48.1 billion, the National Association of Software and Service Companies says.
Exports are around $41 billion of that total, up from $32 billion a year ago when the United States accounted for around 60 percent of those sales.
"I see the US accounting for 50 percent of the sector's exports in three years, down from 60 percent now," said Avinash Vashistha, chief executive of outsourcing consultancy Tholons.
Led by Tata Consultancy Services and Infosys, India had focused on the US partly because it was the easy option. "They have been trying to get the low hanging fruit," Sushil Finance's Doshi said.
But a weakening US economy and a rupee that gained more than 12 percent against the dollar last year have forced Indian software services companies to broaden their horizons. They face tough competition from global majors such as IBM, Accenture and Microsoft for outsourcing contracts from fast-growth markets such as China and India.