No slowdown in outsourcing spend for Infosys

DAVOS, Switzerland (Reuters) - Infosys Technologies, India's second-largest software exporter, expects spending on outsourcing to continue to rise in 2007 despite increasingly contained corporate technology budgets, its chief executive said.

Speaking on the sidelines of the World Economic Forum in Davos, Switzerland, Nandan Nilekani said Infosys expected to maintain its momentum in 2007 and could consider strategic acquisitions as it accelerates growth outside India.

"We have not seen any slowdown on outsourcing. It's not about total spending, it's about how much of that spending is being diverted for offshoring and outsourcing," he said.

"Even if budgets for technology spending don't go up very much - they may go up a few percentage points - the amount of money that is reallocated from existing ways to new ways of spending (like outsourcing) will go up."

Nilekani added Infosys, which develops applications, designs supply chains and offers back-office facilities, saw billing rates "stable with an upward bias".

Infosys has grown its presence in Europe at more than 60 percent a year for the last three years and is also expanding in China as many of its U.S. and European corporate clients move into the fast-growing Chinese market, Nilekani said.

"While organic growth is a very important part of what we are doing, we believe that as we progress in the strategic direction of building a new generation of IT and consulting firm, strategic acquisitions are a possibility," Nilekani said.

"Those acquisitions will help us to get into a new market, get people with skills we don't have, help us to launch a new service, allow us to enter a new vertical domain where we need expertise," he said on Saturday, adding there was "nothing to report at the moment".