Infosys Denies Reports on Pricing Cuts
IT bellwether Infosys has vehemently denied reports on comments attributed to its COO Pravin Rao, as "incorrect". Yesterday, Rao had said that clients are demanding 20-30 percent savings on contracts. And this was interpreted as a cut in pricing. Infosys responded by saying "this does not necessarily mean that vendor pricing is getting impacted" and that “there are enough levers available to meet the client demand on cost take-outs without necessarily impacting the pricing.”
In a statement released later, Infosys said:
"Infosys would like to clarify that the news reports on pricing cuts seen by the IT industry being attributed to the Infosys COO are incorrect. His comments have been misrepresented.
The comments made in the interview refer to cost take out efforts by clients towards reducing their program investments in the ‘run’ side of business, to reinvest them in newer technologies or the ‘change’ side of business. Cost take outs by clients do not necessarily translate into an impact on vendor pricing. There are enough levers available to meet the client demand on cost take-outs without necessarily impacting the pricing.
Infosys commentary on pricing is no different from what we have shared with the market earlier. We would like to reiterate that we are not seeing anything new on pricing. This has also been clarified in the webcast of the Morgan Stanley India Summit."
