January 05, 2009, 11:52 AM — ZDNet blogger Brian Sommer wrote today that service firms are in for a struggle in 2009, and I think his crystal ball has the right dope. In fact, it doesn't take a crystal ball to know that almost everybody is in for a hard time this year. One of the issues cited is something I've never considered a factor, but it may well be, and that's the "sabre-rattling" between India and Pakistan. Indian IT firms and call centers, which cater mostly to non-Indian firms, are at risk not only because of a growing global recession, but also because of tenuous politics between the two countries which may cause some instability. Another prediction is that many offshore service providers will start making salary cuts to remain competitive. It's inevitable that the domestic IT service industry will also start either freezing or cutting pay levels to weather the hard times. Lastly, look for some service firms to restructure, be acquired, or disappear completely.
It's a bleak, but accurate look at the coming year.