Software major Infosys Technologies has cautioned global IT corporations that replicating its 'global delivery model' of outsourcing from India would not only pose challenges to them due to difficulties faced in business model re-engineering but also result in earning lower revenues.

"Our global competitors are attempting to replicate our business model and adapt to the principles of clockwork. This, we believe, will pose great challenges for them. Not only would they have to deal with the disruptions caused by business model re-engineering, but also cope with lower revenues."

Infosys said in its annual report for the year 2002-2003, filed with the US Securities and Exchange Commission early this week.

Top IT giants like EDS, Accenture and IBM, who are competitors to Infosys in the US market, where the Bangalore-based Nasdaq-listed firm earns about 70 per cent of its revenue, have set-up operations in India and are rapidly expanding their staff.

While EDS which has committed $12 million for its Mumbai centre plans to raise its number of employees to 700 by 2004 end, Accenture plans to double its employees for its call centre and software development centre in Mumbai and Bangalore to 2,500 in two years.

IBM with close to 4,000 employees working in India plans to increase by 'hundreds' and Oracle last year indicated that it would hire 1,500 engineers within December 2003.

"The complexities involved with managing, a new culture, developing matured processes and the high performance work ethic required to sustain this model, only makes it more difficult," Infosys said.

The company employees over 15,000 people, largely engineers, from 38 nationalities working in its software development centres in India and abroad.

Even as Infosys finds its competitors following the trend it set in software outsourcing, the third largest Indian IT firm is facing increased pricing pressures from its customers and its competitors developing software at low rates, what it calls as 'under pressure' to source business and sustain operations.

"Our clients, faced with increasing cost pressures, are requesting their vendor-partners to share the burden.

Competitors, under pressure to source business and sustain operations, have taken short-term pricing pressures," it said.

It said the onsite and offshore billing rates decreased by 2.5 per cent and 4.7 per cent, respectively, during last year. Though onsite work and utilisation of staff increased, high sales and marketing expenses and sub-contractor charges had hit its bottom line.

Infosys posted revenue of Rs 3,622.69 crore (Rs 36.226 billion) and a net profit of Rs 957.93 crore (Rs 9.579 billion) for 2002-03, an hike of 39 per cent over previous year in revenues and 26.44 per cent in profit.

However, last month the company issued a muted guidance for the current year and said it would grow by just 12 to 13 per cent disappointing the stock markets, sparking panic selling of technology stocks and bringing the BSE Sensex below the 3000 mark.