Will Satyam Computer (SAY) survive the 2008 election?

Last Thursday, Satyam Computer (Public, NYSE:SAY), a global information technology (IT) solutions provider revised its fiscal 2009 outlook, and now their consolidated US GAAP revenue is expected to grow between 32% and 34.1%and earnings per share (EPS) is expected to grow by 26.1% to 28.2%. According to Reuters Estimates, analysts were expecting the Company to report EPS of INR32.31 for the same period.

It would seem that outsourcing, which has been a theme over the last decade in the U.S., is here to stay. But not if presidential hopeful Obama has anything to say about it. In a speech given on July 31st:

"Over the last few decades, revolutions in technology and communication have made it so that corporations can send good jobs wherever there's an Internet connection. Children here in Missouri aren't just growing up competing for good jobs with children in California or Indiana, but with children in China and India as well," Senator Obama said at a campaign rally in Springfield, Missouri.

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In a veiled attack on previous government for its decision on economic reforms, he said "it was irresponsible decisions that were made on Wall Street and in Washington. In the past few years, we have relearned the essential truth that in the long run, we cannot have a thriving Wall Street and a struggling Main Street."

When wages are flat, prices are rising and more and more Americans are mired in debt, the economy as a whole suffers.
When a reckless few game the system, as we've seen in this housing crisis, millions suffer and we're all impacted, he said, adding when government fails to meet its obligation - to provide sensible oversight and stand on the side of working people and invest in their future - America pays a heavy price.

"So, we have a choice to make in this election. We can either choose a new direction for our economy, or we can keep doing what we've been doing," he said.

Emphasising on a need to develop job prospects at home instead of outsourcing it to other nations, Obama said "we can choose to do nothing about disappearing jobs and shuttered factories for another four years, or we can encourage job creation in the United States of America."

So where does that leave Satyam? Luckily for them, an increasing number of major Australian corporations are now prepared to use offshore outsourcing for their software needs. This is to the benefit especially of India-based providers including Satyam Computer Services, Infosys and Wipro, which have all recorded significant growth in their Australian operations in mid-2008. Qantas Airways, telco Telstra and many groups in the banking and financial services sector now rely on these overseas firms. Infosys has increased its revenue for the year ending 31 March in Australia from $A128.3m in 2007 to $A159m in 2008, thanks in part to a deal with ANZ Banking for a new core software system at the Asian operations.