European IT services providers will return at best to only tiny growth next year as companies and governments keep a tight lid on spending.
There are no large IT outsourcing deals on offer, and while companies continue to look for smaller deals, pricing pressure on these is intense, IT services company executives told an investor conference in Spain.
“There are definitely signs that orders are coming back, but the environment remains challenging — prices are not coming back,” Gilles Grapinet, operations chief at Atos Origin (ATOS.PA) told the Morgan Stanley TMT Conference in Barcelona.
“We don’t expect booming growth in 2011.”
Atos’ smaller French rival Groupe Steria (TERI.PA) echoed the comments.
“We are not betting before the second half next year on any pricing power coming back,” said Laurent Lemaire, Steria’s CFO.
The cautious growth view from European companies is in stark contrast to Indian and U.S. rivals who foresee strong growth.
Accenture (ACN.N) has forecast for sales to rise 7-10 percent in its fiscal year of 2011, while India’s top IT services firm Tata Consultancy Services (TCS.BO) told Reuters last month it expects to see even in Europe annual sales growth of 20-25 percent continuing.[ID:nN30260170][ID:nLDE69O080]
In contrast,Steria said it expects to see faster sales growth next year than the 1 percent it targets for this year, while it sees also sales in Britain growing.
Andy Green, chief executive of Logica (LOG.L), said he was not ready to forecast growth for Britain.
“I am not prepared to say that. It’s too early to call.”
Source:http://www.reuters.com/article/idUSLDE6AI0E120101119
