The American market is the hunting-ground for the Indian software companies. Most of its jobs are from the market of U.S. The subprime crisis and the subsequent freezing of purchase decisions in the U.S have brought home to the Indian information technology service (ITS) companies the recklessness of depending almost entirely on that one market. India’s top five ITS companies – TCS, Infosys, Wipro, Satyam and HCL Tech – collectively lost over Rs 2,50,000 crore in market value in 2007-2008. Operating profits were also down, with margins for the companies decreasing by 6 to 15 percent this year. The banking, financial services and insurance (BFSI) vertical, which has been the stronghold of the many ITS firms has been the worst hit by the subprime crisis. Most major western financial companies have taken huge losses and are undergoing managerial changes, which has slowed their decision-making on large projects. Major challenges faced by the IT industry are, •Slowdown in U.S economy
•Fallout of subprime and credit crisis on banking, retail services •Rising oil prices
•Fall in operating margins
•Cap on H1-B visas
•Protectionism threats ahead of the U.S presidential election
Tata Consultancy Services, for the financial year 2005-2006, 59.06% of its revenue were from North America, 22.40% were from Europe, 12.50% were from India, 6.04% were from the rest of the world. Out of the total business of TCS 53.13% were from the BFSI sector, 20.87% were from the Telecom sector, 8.14% were from Retail & Distribution, 17.86% from the Manufacturing sector. Surviving the crisis on the dependent market is really a critical task. TCS is employing various strategies to beat the U.S Economy slowdown.