Unformatted text preview: a moderate comeback in 3QCY13 itself
on pent-up demand. The last time aging infrastructure was refreshed
was in 2010.
In our view, this will drive increased discretionary spending, which would be
positive for blended realized rates and hence margins.
Figure 11: Improving outlook for discretionary spending
Company Outlook for discretionary spending
**Discretionary spend continues to be muted with a flat-to-negative outlook. While the overall deal velocity has slightly increased,
the environment is very volatile Infosys **Since consulting and SI is driven by discretionary spends, expect a tough business environment in the segment in CY14 with
investments being evaluated on stringent commercials
**In transformational deals, the pipeline has not changed but the deal velocity has come down as discretionary spend has
**Demand momentum remains strong; pickup in discretionary spends is expected to continue through CY14 TCS ** Number of engagements won in Q2FY14 on cloud, big data and mobility are evidence of the discretionary uptick across the
** In core ERP, opportunities for upgrades, consolidation and new models like the Salesforce, Workday model are driving the
momentum Wipro ** Discretionary spending continues to pick up steadily with deal conversion rates going up
** Discretionary spend is surprisingly coming back in the US across industry segments but is more pronounced on the digital side
** Seeing a mix of discretionary and non discretionary in most deals that are coming up
** Analytics, mobility and customer centric projects are driving the bulk of discretionary spends HCL Tech ** Seeing an increase in the market and market share for emerging technologies even as traditional green-field ERP
implementations slow down
** Customers are looking at transformational projects as part of the run-the business cost takeouts that they are looking at
**In financial services, analytics and mobility are driving discretionary spends making it a momentum vertical for HCL Tech Tech Mahindra ** Discretionary spend is seeing an improvement, particularly in NMACS.
** Improving fundamentals and macro has resulted in significant improvement in business confidence. Source: Company data Strong demand for social, mobility and analytics solutions; muted for cloud
IT services spending on new technology trends, such as SMAC, still
constitutes only 5–10% of customers’ overall IT budgets. Although spending
on new technology trends is minimal, cu...
View Full Document
This document was uploaded on 02/06/2014.
- Spring '14