Monday, March 31, 2008

What does global IT slowdown mean for Chennai?

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What does global IT slowdown mean for Chennai?

We are hearing news all over about IT slowdown happenning in US. The reason - Financial institutions are affected due to real estate being down in USA. Many foreclosures and lot many issues related to real estate going in USA. Since Financial market is suffering IT suffers too.

On the other hand, we are happily talking about IT park in Chennai. Is that OK to be happy about it?! Answer is YES. Here is some analysis....

Any major change as a result of happenings across the world would happen in one or two quarters. The global effect on financial services will affect other sectors like IT, including retail.

However, new industries like airline are opening up and will spend more on IT. The Indian market is also expanding for IT services. Say for example - Wipro, 18-20 per cent of revenues come from the domestic business. This will only grow faster.

Chennai IT Park is something provisioned by the government with proper infrastructure improvements like international airport in chennai, road and rail infrastructure improvements in chennai. Government has elected ELCOT to do all the work related to IT Park in Chennai.

Now, once the IT park is built, all the IT companies would wish to have their centre in second tier city like Chennai for sure. The reason is it will be much cheaper to operate from a second tier city like Chennai, assuming the infrastructure improvements.

IT slowdown is usually temporary and this time also it is temporary. Financial industry is stronger in USA and it will come back to normal and it will go up more. Considering the fact that the government is changing in US, things would change globally too, since there would global policy changes. These disturbances in the market are normal and we have to get tied to the wave and come back to normal sooner.

As we grow as human beings, we always need IT and related industries to run and serve.

Hence, Chennai IT Park is good to go.

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