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Indian IT Cos Suffer as US Computer Market Slums

Dec. 29: Signs of a slowdown in the US economy and the forewarning of slump in computer sales and shortfall in revenues by the US information technology (IT), is likely to bring its own set of woes for the Indian IT sector. And this time even the domestic software services firms – an important segment of the IT industry, which till so far felt largely insulated from the global market meltdown, is likely to find few avenues of escape, says industry watchers. The slowdown in the US economy is already causing concern to various industrial sectors and exports of a variety of products have already faced the jolt. According to some analysts, most companies there, even the blue-chip. Fortune 500 firms, would try to cut costs and investments in order to keep their bottom lines healthy. In this process, Indian software companies, which cater to approximately 185 of these Fortune 500 companies, are likely to face a slack demand over the next few months. In fact, alarm bells have already begun to sound from the three major segments of the IT sector viz. software, microprocessor and hardware. Microsoft has squarely put the blame to the sluggish desktop applications market in the US consumer and corporate sectors, as well as weak revenue from its portal subscriptions and online advertising sale. However, the optimists are of the opinion that this is a temporary phase that will soon be over.