A slowdown in the U.S. economy is no more a cause for too much worry for the services industry. In fact, it has scripted the saga of new, strong European and Indian domestic markets. The evidence was visible at the India Leadership Forum 2008, the annual conference organized by India’s National Association of Software and Services Companies (Nasscom). Most importantly, Europe Middle-East and Africa (EMEA) stole the entire show.

The sourcing world noticed that in year 2007, EMEA registered the highest number and value of outsourcing contracts that exceeded the U.S. for the first time. In figures, “The average deal size in Europe has  increased by 35 percent in 2007,” says Mark Mayo, President, Global Resources Management, TPI. Actually, Europe is providing cushion against the slowdown in the U.S.A.

But there were some who thought otherwise.  “Europe is exciting country to be, but it will be difficult for it compete with the U.S. with so many cultural disparities,” says Simon Ormston, Head, Outsourcing Marketing, BT Global Services. “Don’t forget to focus on the U.S.,” recommends Simon.

While many industry pundits are upbeat about the outsourcing market in EMEA, the Indian outsourcing industry is grooving to another tune--the tune of its robust, growing domestic outsourcing market. The Indian domestic outsourcing market is likely to reach $13 to $14 billion by the financial year 2010. This is actually the consequence of the market’s potential to throw up big deals like BSNL-TCS’ $140 million contract to upgrade of BSNL’s core billing system. And the most recent one being the multimillion deals signed between Reserve Bank of India and HCL, to set up two large data centers and managing its IT infrastructure, consisting of legacy applications and software, to move to a modern, more robust system. 

However, the Indian outsourcing market, including domestic and export revenues accounts for less than 3 percent (approximately $64 billion) of the worldwide spends, according to Nasscom.

For those whose mainstay is the US market, while a cut in tech spending in the US may be inevitable during a recession, the recent research report titled 2008 IT Spending Survey, published by Forrester Research and Goldman Sachs. says  that it wouldn’t affect the country’s spending on IT outsourcing