IT and R&D services provider MindTree Ltd has started seeing, in the last four or five weeks, the first signs of customers finalising budgets, even as the focus is on deals strategic to clients? business and on newer contract models.
?Clients that had put initiatives on hold are preparing the shortlist and going ahead with the next level of decision-making,? said Krishnakumar Natarajan, Chief Executive Officer, MindTree. ?That is good because two months ago, people were not sure whether they were going to spend or not.?
He said it was too early to make a judgment on whether things were coming back to ?normal?, but that these were signs of initial optimism. The drop is so substantial that it is going take a few quarters to just come back to what it normally was, he added.
Natarajan said customers are going ahead with decisions that are either going to enhance their revenue or help them address new customers. Most are looking at applications that would give returns in 12-15 months.
Clients are also looking at newer types of contracts, including fixed price deals for ?lights-on? maintenance type of work, outcome-based pricing, and leveraging IP that vendors have built.
For maintenance contracts, some customers are asking to improve the productivity and to pass on some of the benefits to them, said Natarajan. Some clients are also focusing on business models that measure the outcome of solutions, he added.
Source: The Hindu Business Line
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