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IT services giant Infosys has decided to avoid the lucrative but seemingly impenetrable federal Government market.Federal agencies have proved difficult to crack for Infosys and rivals including Satyam, Tata Consultancy Services and Wipro. This is in stark contrast with the likes of IBM, EDS and CSC. Problems with security clearance and the political sensitivities involved in offshoring government work are some of the hurdles the companies face when jostling for government tenders.
The Indian companies are also relatively new to the local scene, compared with IBM Australia, for example, an established brand name since the 1930s.
Upcoming federal government IT work with a software component includes the Department of Health and Ageing and Medicares 600 million dollar business, and the Group 8s 360 million dollar contract.
The Department of Agriculture, Fisheries and Forestry, Civil Aviation Safety Authority, Australian Public Service Commission and Australian Communications and Media Authority are among the Group 8 members.
But Infosys global chief executive and managing director S. Gopalakrishnan is unfazed. He believes his firms fortunes lie in banking, finance and other verticals instead of government.
Were focused on large private companies like banks, resources, transportation, logistics and retail in Australia, but not the government sector, Mr Gopalakrishnan said.
He said the company might consider investing resources in the government sector further down the track.
In the longer term, well look at it . its just that we have so many other opportunities that weve not got around to looking at.
In Australia and likewise globally, the financial services sector alone contributes around 35 per cent to the business, Mr Gopalakrishnan said during his recent visit to Sydney.
In Australia, profits have tripled , it recorded 20 million dollars for the year ending March 31, 2007. Global revenues passed the 3 billion dollar mark in the same period.
Meanwhile, Infosys plans to increase its local headcount in the coming months.
We have about 350 people permanently here and around 2000 people outside of Australia supporting clients here.
Well add another 150 people over the next 12 months, he said.
Customers include the National Australia Bank, Suncorp and Telstra.
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