(By Anthony Miller – Thursday 14th May 2009 8:30am). Well, it looks like I got this one wrong! I had thought that demand for testing services would suffer less than the rest of the application services sector as enterprises tweaked legacy systems rather than upgrade or replace them (see, for example, SQS passes the test). However, Cologne-based SQS, probably the largest testing services ‘pure-play’, has just issued a profit warning after clients suspended 'live' projects at short notice and asked for price cuts.This has all sorts of ramifactions for IT services companies, many of which have been accelerating growth in their testing practices. Indeed, testing services have been particularly profitable for India-based players as up to 90% of the effort can be delivered offshore. SQS itself has been building its offshore delivery capability, not just in India but also in Egypt and South Africa. Perhaps they just didn’t get there fast enough. Anyway, the lesson seems to be that there really is nowhere to hide!
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