Asian IT firms concerned abuot US, Europe economy

Asia's major technology exporting firms are actively diversifying into emerging markets such as China, as key IT spending regions such as the United States and Europe are mired in economic uncertainty.
While the US and Europe markets are too big to ignore, Infosys Ltd and Wipro Ltd , India's No 2 and No 3 software services exporters, were hiring hundreds more staff in China, executives said on the sidelines of the World Economic Forum in Dalian, China.
"Right now, of course, the economic situation is the biggest concern because it's something that's outside our control, but will have an impact on the global economy and hence our industry," Infosys Executive Co-Chairman Kris Gopalakrishnan told Reuters.
"You have to depend on the United States and Europe in the short term, but continue to invest in places such as China and India," he said. "We are diversifying our markets, but it will take a long time."
Infosys and Wipro, which compete with larger rival Tata Consultancy Services Ltd , derive more than two thirds of their revenue from the United States and Europe, where debt problems are hampering IT spending.
Slowing US and European economies, volatility in the rupee, severe competition, rising wages, high staff turnover rates and management shake-ups at Infosys and Wipro have been hampering growth in India's $76 billion software services sector.
The United States alone accounts for about half of the revenue of India's IT outsourcing industry. "Macro concerns have resurfaced with the US rating downgrade and the eurozone crisis. We expect uncertainty to impact 2012 IT budgets," Surendra Goyal, an analyst with Citigroup, said in a report in September.
Infosys' Gopalakrishman said the company planned to roughly triple its staff headcount to 10,000 in 2-3 years. Earlier in the week, Wipro said it planned to double staff levels in China over the same period from 800 now.
Although some IT companies such as Wipro and China's Huawei Technologies, the world's No 2 network gear provider, said there had been little impact from the economic woes in Europe so far, expanding their footprint in emerging markets was a key part of their strategy.