Software Stocks

However, Infosys, in its annual report, has claimed that it would make sure that not more than 25-30 per cent of its turnover comes from Y2K projects. Excessive dependence on one product could lead to a crash after the projects have been executed. Also, Infosys has reasoned that Y2K projects are mainly carried out on mainframe systems while it would like to concentrate more on the open system projects.

Other companies in the industry, however, claim that investments in mainframe computers--both hardware and personnel training wise--may not be a dud investment after the Y2K projects are over. A greater business opportunity lies beyond the year 2000 as companies worldwide will have to tackle the problems of conversion of local currencies into the Euro.

The Euro currency business is almost as huge as the Y2K business, and the orders of this business are likely to flow in at around the same time as the millennium projects get exhausted.

Another area of future business would come from the maintenance and development of the existing software which will become obsolete after some time.But one risk factor that may bother the industry in the next few years will be that companies move towards development of customised software products rather than development projects. This could reduce the potential income coming from offshore projects.

However, for the next few years, software companies should see sizzling profit growth that may perhaps be the best in the economy.