Chennai: International consultants' group McKinsey & Co has outlined four models for Indian software companies to adopt in order to survive and grow in a changing environment for information technology solutions.

The four growth models are: contract manufacturing, sliver systems integration, outsourcing and technology innovation.

On the occasion of Connect 2001, an information technology convention held in Chennai, McKinsey said the traditional Indian software model is running out of steam and will desegregate into four district line of services. Many Indian players are stuck in the middle and are attempting to mix disparate models to move up the value chain, the consultants said.

McKinsey, meanwhile, said about $239 billion of information technology expenditure in the US during the past four years is excess spending. Infotech expenditure has rapidly grown from $49-50 billion in 1980 to $500 billion in 2000.

The spending, the consultants said, which grew at 10 per cent per annum in the last two decades, grew at 25 per cent in the last four years. In the last two quarters, the growth has been in the 2-4 per cent range.

The excess spending was due to the dotcom treat perceived by old economy companies, and a new wave of software. The slowdown in the US economy is due to the pullback in technology related capital expansion, the consultants said.