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Bharat Kumar

CHENNAI, Jan. 26

SOFTWARE companies continued to lose a worrisome number of clients as against the number of clients they acquired during the four quarters ended December 2002.

That has been the trend for the last few quarters, when seen at a clutch of four quarters each. So this time around, Business Line took a look at the way software companies fared in each of the last four quarters. March 2002 was the last quarter that gave bad news to the industry in general.

Heavyweights such as Infosys, Wipro and HCL Tech all lost more clients for the quarter ended March 2002 than for the succeeding three quarters, except for HCL Tech which saw a blip in June, 2002. For the rest, December 2002 turned out to have lesser client losses than both March and June that year.

This could mean that things are settling down finally for mid-size companies and client flux is reducing. What could finally decide the issue is the number of clients deserting their vendors as against the number being culled by the companies themselves. The latter is possible due to the fact that clients do not ramp up and project sizes remain the same over time. Here, vendors do not find it worthwhile to service clients who don't promise them a growing business.

In the light of the above, it may be noted that for both Mastek and Mascot Systems, active clients in December 2002 are fewer than those in December 2001. Further, in the select list below, these two show more client losses in the last four quarters than client gains.

Those able to ramp up revenues faster in the case of new clients should have the going good. This is evident from the number of one million dollar clients in December 2002. For instance, HCL Tech has 4 more one million dollar (OMDs) clients for December 2002 as compared to September 2002. Similarly, Wipro Tech had 14 more in December 2002 as compared to December last. In the case of Mastek, it had 18 clients with a "potential of giving $ 1 million in business" as compared to 15 in the previous December.

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