Infosys is about to release earnings. Ponder the cloud conditions which may create a Bear Case Scenario:
Infosys used to be a straight labour commodity arbitrage play. Screw educated western workers and replace then with somewhat educated third world employees who still do not make a lot of money. Infosys thrived. North American middle class bled. Some shareholders benefited we think but hard to find.
Enter cloud computing. Many definitions, some of them competing, but cloud is good; we think.
A few problems. Infosys insists on premium pricing. Much of their value comes from Foreign Exchange arbitrage. CFO`s do good arithmetic so be careful. Its all about price right now. Most CEO`s and CFO`s would like to say they are hiring locals and not foreigners.
Infosys has some narrow solutions based on cost. As problems and solutions are solved in a large context a few nickels here and there
may not be important. Will not be important.
George Gutowski writes from a caveat emptor perspective.