The firms believes that the profitability of the companies depends largely on the special expertise that they provide to the clients. Large companies can offer a variety of services to the big customers. Small companies can easily coexist with large ones if they have expertise in a highly specialized area or industry.

The biggest threat to the IT services industry is the ongoing economic slowdown and global financial crisis, as a slowdown in economic activity as well as manufacturing impacts IT spending of companies. The firms believe that the economic slowdown will continue for some more time and expect the Company’s financial service segment to be hit hardest. In the near term, the firms believe the impact of fluctuation in exchange rates will be more severe, as over half of the Company’s revenues are generated from outside the US.

The firms believe that IT demand may start seeing the bottom in 2HCY09 and the situation will likely begin to improve as of 2Q10 for the IT Services companies. In the event of an economic recovery in FY10-FY11.