U.S.-Iran spat to impact IT sector: HFS

Onshore talent shortage could offer advantage to Indian IT firms

Workers are pictured beneath clocks displaying time zones in various parts of the world at an outsourcing centre in Bangalore February 29, 2012. The business of storing, decoding and analysing unstructured data - think video, Facebook updates, Tweets, Internet searches and public cameras - along with mountains of facts and figures can help companies increase profits, cut costs and improve service, and is now one of the world's hottest industries. It's called Big Data, and although much of the work is done in the United States, India is getting an increasing slice of the action, re-energising an IT sector whose growth has begun to falter. Picture taken February 29, 2012. REUTERS/Vivek Prakash (INDIA - Tags: BUSINESS EMPLOYMENT POLITICS)

The U.S.’ latest attack on Iran could have ‘huge’ ramifications on the global economy and therefore, business and growth expectations of the tech industry may have to be tempered, said Phil Fersht, chief tech analyst & CEO of U.K.-based HFS Research.

All kinds of geopolitical events would have a huge impact on the global business landscape and in turn, it would affect IT budgets of enterprises, he pointed out.

“The fall-out from this latest attack on Iran and its implications, on multiple geographies and businesses, could have huge ramifications on the global economy in general, and the tech sector is not isolated,” Mr. Fersht warned.

Echoing similar sentiments, Prashant Shukla, director at U.S.-based Everest Group, said the U.S.-Iran tension was yet to unfold in terms of impact, but it has ‘surely brought in negative sentiment’ to the tech sector at the beginning of 2020.

As per Mr. Fersht, the U.S. market was already worried over the Brexit impact; the political impact on the economy in an election year would further dictate tech spending levels.

Best placed sectors

“The U.K. and Europe is all about post-Brexit compliance and support. Tech firms... those that are steeped in banking, logistics, supply chain and complex data strategy are best-placed and I see all the big six India-heritage providers getting major opportunities to bid on new deals but also facing major challenges in scaling up the talent to deliver,’’ added Mr. Fersht.

Onshore talent shortage, however, would continue to offer tailwind advantage to Indian service providers in 2020, provided they are able to manage upskilling and attrition better and place themselves competitively, observed Mr. Shukla.

“Indian tech providers can continue to grow above the global average if they efficiently explore their vantage points such as access to talent, long-term client relationships and focus on digital-related investments,’’ he added.

Published - January 08, 2020 10:08 pm IST