Growth in India's exports of IT services, business process outsourcing and related services is forecast to drop to 11 to 14 percent in the Indian fiscal year to March 31, 2013 from an estimated 16.3 percent in the current fiscal year, the National Association of Software and Services Companies (Nasscom) said.

Cognizant Technology Solutions posted strong growth in revenue and profits in the fourth quarter of 2011, indicating that a few focused players continue to grow, even as demand for offshoring is flat because of uncertain economic conditions.

Wipro's IT services revenue grew 12 percent year on year in U.S. dollar terms in the quarter ended Dec. 31, but its growth lags behind Indian outsourcing peers such as Tata Consultancy Services (TCS).

Tata Consultancy Services, India's largest outsourcer, posted strong revenue in the quarter ended Dec. 31, with growth across all its markets including Europe, which is being hit by a debt crisis.

Infosys cut its revenue growth forecast for its fiscal year ending March 31, citing slowing demand in Europe which is hit by a debt crisis.

Two weeks ago, the CIO of Texas penned a seven-page letter outlining the chronic failures of the state's nearly four-year outsourcing relationship - a deal the Texas governor had briefly suspended in 2008 citing service delivery problems that he said put the state's agencies in danger.

Whether any future U.S. jobs bills will contain anti-offshoring measures remains up in the air. But outsourcing customers don't have to wait to protect themselves from potential protectionist legislation.

Outsourcing prices dropped overall in 2009, and industry watchers expect the downward trend to continue next year. It's not just the global economic slowdown that's sending IT service prices south, it is also the increased use of offshoring, pricing pressure from customers, and a reduction in vendors' services.

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Public sector outsourcing is "in," as state and local IT leaders contend with shrinking budgets, limited human resources, and increasing demand for IT services. "There appears to be a perfect storm for IT outsourcing at the state and local level today," says Jason Khan, chief technology strategist for Washington, D.C.-based Touchstone Consulting Group.