A revival in information technology spends, rising demand and the lure of larger contracts are prompting mid-size software service firms to step up their onsite presence, especially in the United States, industry watchers said.

Increasing resources at overseas locations could also shield IT companies from any potential protectionist moves by governments, while better positioning them to tap into gradually reviving IT budgets.

"Clearly, calendar year 2010 was much better than 2009 and calendar year 2011 is expected to be even better than 2010," IDFC Securities analyst Hitesh Shah said.