The darkest time in the personal computer industry’s history may have ended. In the last few months, hardware makers like Intel, Hewlett-Packard and Dell have suffered as one-fifth to one-quarter of their computer sales have vanished. For the first time ever, Microsoft, the world’s largest PC software company, experienced a drop in sales of its Windows software and carried out large-scale layoffs.
As a result, analysts predicted that computer sales would decline at a rate four times greater than during the dot-com bust, the previous low-water mark. But now there are signs that companies tied to the PC industry may stop setting unwelcome records.
On Tuesday, Intel, based in Santa Clara, California, reported sales of $8 billion for the its second quarter, which ended June 30. While that was a far cry from the $9.5 billion it posted in the same period last year, it beat analysts’ expectations by $700 million.
And for the first time since the recession hit, Intel felt comfortable enough to provide a forecast for its present quarter, saying it expected revenue of $8.1 billion to $8.9 billion. Analysts polled by Thomson Reuters had forecast earlier that Intel would post revenue of $7.8 billion this quarter.
‘‘Our second-quarter results were clearly better than we expected,’’ said Paul S Otellini, Intel’s chief executive, during a conference call with analysts.
In April, Otellini declared that he thought the PC slump had reached bottom, and the company’s recent financial results appear to confirm this.
As the world’s largest chipmaker, Intel helps set the pace for the computing industry. For that reason, analysts keep a close eye on the company’s take on the overall market. Increases in the sales of Intel’s chips tend to translate into higher computer sales for HP, Dell and others down the road.
Intel has warned that businesses remain cautious about buying new PCs given the still-limping global economy. Consumers have been the ones who are proving more willing to buy new computers, particularly laptops and their diminutive low-cost cousins, netbooks.
‘‘We saw strengthening through June,’’ said Stacy J Smith, the chief financial officer at Intel, during an interview. Intel expects the rising demand to carry over into the second half of this year.
Smith added that sales in Asia had picked up, particularly in China, and that sales in the United States were solid. Over all, however, the immediate fiscal conditions remain sobering for Intel.
During its second quarter, Intel’s net income fell to $1 billion from the $1.6 billion it reported during the same period last year. Intel earned 18 cents a share, down from 28 cents, beating analyst estimates by 10 cents.
Those figures exclude charges tied to a $1.45 billion fine levied against Intel by the European Commission for anti-competitive practices in the PC market. With the fine included, Intel posted a loss of $398 million, or 7 cents a share.
Still, Intel reported higher-than-expected gross margins and a quarter-to-quarter rise in sales of chips, lifted by healthier sales of laptop chips.
Intel Q2 results signals end to bad days for IT
Swine flu puts Hyderabad IT companies on high alert
Even as Hyderabad grapp-les with the spurt in swine flu cases, IT companies in the city find themselves to be the most vulnerable to the deadly virus. With Google shutting down one of its offices after an employee was confirmed to have the H1N1 virus, other major global IT companies are taking extra precautions to educate their workforces about the disease.
Several big names in the IT industry such as Micro-soft, Computer Associates (CA), Dell and IBM have major operations in Hyder-abad. These companies find themselves all the more susceptible to a swine flu attack, as they host a large number of visitors from the US and the South East Asian region. “We do get a lot of guests from the affected regions. Hence, we have to be extra careful,” Bipin Pendyla, VP and site manager, CA India Techno-logy Centre, told Financial Chronicle.
The company has asked its employees to be alert to swine flu symptoms and to take immediate medical help if they notice any. “We have also asked them to stay away from anyone suspected to be infected with the H1N1 virus,” Pendyla said.
Microsoft, which opera-tes one of its largest develo-pment centres in Hydera-bad, has sent out advisories and emails about the swine flu to its employees. The mails essentially talk about the dos and don’ts to be followed to prevent the dreaded disease, a spokes-person said.
MindTree said that there had been no impact on any of its projects at the Hyderabad office following the detection of one case of swine flu. A MindTree employee in the city was tested positive for swine flu on Monday. “Along with the medical authorities, Mind-Tree has taken several me-asures to arrest any poss-ible spread among other MindTree Minds. During the last 3 days, doctors have conducted awareness workshops for MindTree Minds in the Hyderabad office,” a statement said.
Broadridge, a global financial solutions compa-ny, has initiated an awar-eness campaign amongst its staffers about the virus. “The most effective way has been emails and instructions on how to deal with hygiene and updates from WHO,” said Rajita Singh, HR head.
Even smaller city-based companies, who have to deal with foreign clients, don’t want to take any chances. Says Ramesh Lognathan, MD and VP (products) Progress Software, “Given the incidents in Hyderabad this week, we have taken some additional measures. Proactively, apa-rt from creating the awareness on swine flu precautions amongst empl-oyees through posters and emails, we have also placed hand-sanitizers all over the office and strongly enco-uraged employees to use it as often as possible.”
Google said, “One of our contractual workers in Hyd-erabad has been diagnosed with the H1N1 virus. As a precautionary measure, we have closed the concerned office in Hyderabad for two days — July 14 and 15 — and are taking all necessary steps, including sanitising of common areas, to protect our employees.”
Tech sector job cuts in USA slow in second quarter: Survey
Computer technology job cuts declined 60 percent in the second quarter, ending June 30, compared with the first quarter, according to a survey released Monday.
Planned layoffs announced by computer, electronics and telecommunications companies totaled 33,890 in the second quarter, according to Chicago-based Challenger, Gray & Christmas Inc., an consultation firm.
That was down 60 percent from the previous quarter when tech-sector job cuts reached 84,220, the highest level since the fourth quarter of 2002.
The second-quarter figure is nearly equal to the 33,650 job cuts announced during the same period a year ago.
Despite the second-quarter decline, tech-sector job cuts for the first half of the year reached about 118,100, which is the largest six-month total in seven years.
The second quarter improvement may be signaling a turnaround for an industry that has been impacted heavily by the recession, according to Challenger, Gray & Christmas.
However, Ann Gallaher, chief operating officer at Dayton-based industry group Technology First, said it also could be that companies have aligned expenses with income, thus reducing new layoffs.
“I think people were told to cut by ‘X’ percent, and now they have done that, and they are living within the budget that they were allocated,” Gallaher said. “Things will have to get worse before there will be a second round (of layoffs).”
CA sees strong growth in India on rising tech spend
US business software maker CA Inc expects good progress in India where technology spending by the government and corporates is set to grow rapidly, the managing director of its Indian operations said.
Bookings, an indicator of future business, are expected to rise 50 percent in the year to March 2010 and by 30-40 percent for the following couple of years for CA in India, Amit Chatterjee told Reuters in an interview on Tuesday.
He would not give revenue numbers for CA's India operations.
Asia Pacific, including Japan, accounts for about 9 percent of CA's $4.27 billion revenue and it sees the region's share rising to 12 percent in 2-3 years, said a CA India spokesman, adding India, Japan and Australia will mainly contribute to the growth.
"We are in a growth phase. A lot of (technology) infrastructure is still getting deployed," he said. "The numbers of opportunities that are emerging are very large... there is a lot of promise in India."
Global technology firms like IBM, Accenture, and Hewlett-Packard are increasingly competing for outsourcing deals in the Indian market, as banks, retail, and small-sized companies boost investment on technology.
India's export-driven software services companies, such as Tata Consultancy Services and Infosys Technologies, are also vying for a piece of the domestic market, as demand from their key US and European markets slows.
The market for technology and business outsourcing services in India is expected to expand five-fold by 2020 to $90-$100 billion on the back of a growing economy, according to a recent study by lobby group NASSCOM and consultancy McKinsey.
CA, which makes products that help manage large computer networks, counts firms such as Airport Authority of India, Punjab National Bank, Dr Reddy's Laboratories, and Polaris Software among its Indian clients.
In 2007, CA set up its research and development centre in Hyderabad, which has 1,600 staff. It announced a $30 million expansion of the centre last October.
CA, which mainly competes with IBM and Hewlett-Packard in the Indian market, plans to increase the headcount by 1,000 for its research operations in India over the next 2-5 years, a spokesman said.
Chatterjee said the U.S. firm had about 100 people for sales and marketing operations in India, and that would be raised by 15 percent in the current quarter to September, as it sought to win new deals in Asia's third-largest economy.
New York-headquartered CA expects to win more large orders in the near term as a result of the government's move to step up investments on e-governance and modernisation of airports, defence and power sectors, Chatterjee said.
"The awareness around technology and the adoption of technology is much, much wider than what it used to be five or 10 years ago."
Single spelling mistake can derail job application: Survey
Typing mistakes in a job application can kill a would-be employee's chance of landing a job as employers bet that a sloppy resume means the applicant will do a sloppy job.
A telephone survey of 100 senior Canadian executives showed that more than a fifth of executives said a single typo on a resume or cover letter could cost a potential employee a job, while 28 percent said two mistakes would kill their chances.
The survey, published on Tuesday, was carried out by online job search firm Accountemps.
"The resume is an applicant's first chance to impress the hiring manager," said Kathryn Bolt, president of Accountemps' Canadian operations. "Mistakes on one's application materials may prompt employers to assume there also will be mistakes made on the job."
But 19 percent of the executives said they would still consider an applicant with four or more typos on their resume.
Common mistakes include: "Dear Sir or Madman", "I'm attacking my resume for you to review", "Following is a grief overview of my skills" and "Have a keen eye for derail.
Microsoft CEO laughs off Google OS challenge
Microsoft Corp's chief executive attempted to laugh off the challenge of Google Inc's planned computer operating system on Tuesday, conceding only that it was "interesting".
"I will be respectful," Microsoft CEO Steve Ballmer said to laughs from the audience at a conference for the company's technology partners in New Orleans, which was broadcast over the Internet.
"Who knows what this thing is? To me, the Chrome OS thing is highly interesting," said Ballmer, choosing his words carefully and drawing more amusement from the largely pro-Microsoft crowd.
"It won't happen for a year and a half and they already announced an operating system," he added, referring to Google's Android system for smartphones.
Last week Google said it was planning a computer operating system based on its Chrome browser, aiming directly at the core business for Microsoft, the world's largest software company, whose Windows operating systems are used on more than 90 percent of personal computers.
Google's plan, based on the theory that access to the Internet is now the most important feature of any computing device, is separate from its Android system already available for smartphones and soon for small PCs.
"I don't know if they can't make up their mind or what the problem is over there, but the last time I checked, you don't need two client operating systems," said Ballmer. "It's good to have one."
Microsoft shares fell 14 cents to $23.09 on Tuesday afternoon on the Nasdaq.
Source: EconomicTimes
Outsourcing revenues for e-learning to touch $603 Million by 2012
Revenues from the Indian e-learning offshoring industry stand at approximately $341 million at the end of calendar year 2008, according to ValueNotes research database.
Many corporations, educational institutions and government agencies have tried to change the way education is imparted in schools and colleges. E-learning has become a crucial part of their strategy to deliver knowledge but maintaining e-learning systems within the organization is a costly affair. That's why more and more international organizations are realizing the cost advantages and are moving from dealing with local e-learning service providers to directly approaching Indian companies.
Swine flu closes Google Hyderabad office for 2 days
Google India closed its centre here for today and tomorrow after one of its employees tested positive for the H1N1 (swine flu) virus strain. The effort was to ensure that other employees do not contract the virus.
In a press release, Google stated that it closed the office for two days as a precautionary measure and for sanitising all the common areas.
There are about 250 employees working in the centre here and 95 of them came to the Chest Hospital here on Tuesday to undergo the test. Of these, seven employees had symptoms of swine flu and were quarantined.
The Google employee was one among seven cases who tested positive yesterday. All the seven contracted the virus from a staffer who flew to Hyderabad from Houston on July 5.
The Google employee, who met the Houston-returned staffer, got admitted at the Chest hospital on July 12 and tested positive on July 13, according to the H1N1 Influenza nodal centre coordinator here, K Subhakar.
Following this, Subhakar asked the Google office to check if the employee (who met the one who came from Houston) came to office. On being told he attended the office, the hospital authorities asked Google to screen his close contacts and send them to Chest Hospital for testing.
Meanwhile, three people including a 35-year-old woman who travelled from Florida on July 12, a 29-year software professional who came from Sydney and a 28-year businessman who went to Thailand tested positive for swine flu on Tuesday to take the total to 34 in Hyderabad. The results of 21 more suspect cases are awaited.
Satyam allots 45,222 shares to staff
Mahindra Satyam said that it has allotted 45,222 shares to its employees under the stock option plans of the company.
"The board has allotted 45,222 shares under the stock option plans of the company," it said in a filing to the Bombay Stock Exchange.
Post allotment, the paid-up share capital of the company stands at Rs 235.10 crore from earlier Rs 235.09 crore, the filing added. Shares of Satyam on Monday closed at Rs 72.80 on BSE, down 2.28 per cent over the previous close.
AOL: More Layoffs Inevitable
More layoffs are likely coming to AOL.
Next week, CEO Tim Armstrong will announce plans for the company to focus on four businesses -- content publishing, ad network, local, and communications. AOL will fuel those four with revenues from its still huge but quickly shrinking access business.
What Tim might not say is that AOL does not need its current headcount of ~8,000 employees to pursue this plan. A simple benchmarking exercise suggests that AOL probably needs about 5,000 instead of 7,000 employees.
Source: BusinessInsider
Accenture and British American Tobacco Sign 5yr Application Co-Sourcing Contract
Accenture has signed a five-year application co-sourcing contract with British American Tobacco to help the company improve the design, development and implementation of information technology (IT) solutions for its business operations. Financial terms were not disclosed.
Under the agreement, Accenture and British American Tobacco will jointly design a wide range of applications for British American Tobacco’s functions, including finance, supply chain, sales and marketing, with Accenture developing these applications for global, regional and local use. The program will help British American Tobacco transform its solution delivery function into a global, simplified and standardized operation.
Accenture will deliver the co-sourced services through a joint application development center with British American Tobacco in Spain and through the Accenture Global Delivery Network, including the use of delivery centers in the Philippines and India.
ACS inks $200M contract
Outsourcing company Affiliated Computer Services Inc. has inked a $200 million contract with the City of Lima in Peru to provide the city with technology solutions to run the city bus line’s ticketing system.
Dallas-based ACS said Monday it will operate the ticketing system for 14 years using smart cards that will be processed at the bus stations and sold through automatic ticketing machines. The contract is with Protransporte, the organization overseeing the City of Lima’s bus system.
ACS is leveraging the company’s ability to make cashless technology systems to provide the city with a means of processing tickets for Lima’s 700,000 public transportation passengers each day.
Recession proves good for Indian outsourcing firms
In a year when outsourcing of application development and maintenance projects has slowed down, top customers such as Bank of America, JPMorgan and Citibank continue to send more back office projects to India, as they seek to lower their cost of operations by up to 40%.
According to Nasscom, India’s back office outsourcing industry will grow at 18.4% this year to reach $14.8 billion. Outsourcing of IT services will clock a lower growth at around 13.5% this year, and could even decline to single digit growth if the situation does not improve.
“The Indian BPO industry is likely to maintain double digit growth rate as most of the work done by them is ‘keeping the lights on’ or non-discretionary ,” said Everest Group principal & country head Gaurav Gupta.
The current recession is forcing companies from other verticals such as media, entertainment, healthcare, energy and utilities to consider outsourcing of back office work.
“BPO business is largely annuity in nature where the contracts are for a longer term making it slightly more immune from economic recession,” said Intelenet EVP Sandeep Aggarwal says. “A CFO is constantly looking at gaining control on the cost structure,” said Gartner senior research analyst Arup Roy.
According to a Gartner study released in April, 2009, Indian BPO providers have proved to be stiff competition to western BPO providers, accounting for 5% of market revenue generated among the top 150 providers in 2008.
Gartner expects this increase in revenue to be maintained, with the BPO market share of Indian vendors expected to nearly double by 2010.Meanwhile, Infosys BPO CEO Amitabh Chaudhry said that the BPO growth story is primarily driven by captive outsourcing.
Captives have not stopped outsourcing, they have in fact increased their pie,” he said.
Source: EconomicTimes
AppLabs, TalentSprint enter in partnership
AppLabs, a Hyderabad based software testing and quality management company, and TalentSprint, a provider of vocational learning and employability solutions, have entered into a partnership to create a programme for fresh engineering graduates.
The four-month course will allow engineering graduates to start their IT careers at AppLabs after completing a rigorous curriculum that involves learning, internship and certification. TalentSprint will manage this programme.
"Software testing is a high-growth sector within the IT industry and we are optimistic about a growing demand for certified software testing professionals within our increasing global customer base," Arun Rao, Vice-President, Global HR, AppLabs, said in a release here today.
"Our partnership with TalentSprint will allow us to benefit from a steady supply of pre-certified professionals, as well as optimise our talent acquisition costs," he said.
The programme involves one month of intensive formal training on software testing followed by three months of internship at AppLabs.
Job market in India looking up, but Bangalore tops in attrition: Teamlease Survey
Is there some respite in sight for job seekers in the country? If data from a recent study are reliable, green shoots are visible on the hiring front.
The latest employment and business outlook report by Bangalore-based staffing firm Teamlease, after interviewing HR heads, CEOs and senior executives of 495 companies across the country, indicates signs of revival.
For the July-September quarter, the net employment outlook index stands at 46 points, an increase of 22 points compared to the previous quarter. Similarly for net business outlook, the index stands at 24 points, an increase of 26 points compared to the previous quarter (it was in the negative last quarter indicating high levels of firing).
The telecom domain is seen to be closest to recovery with 55 points, followed by information technology and infrastructure at 53 points. But the ITES sector is yet to show any sign of revival, said the study.
Teamlease general manager Surabhi Mathur-Gandhi said, “With the stabilisation of economies and optimism in global expansion, there is a direct positive implication for the Indian employment situation. We are observing a slow and steady upsurge in the hiring intent across sectors. The advent of new players and aggressive expansion of large telecom giants has seen a bullish outlook for the industry with a promise of exponential growth.’’
There is a slow and steady upsurge in the hiring intent across sectors, according to the Teamlease study. IT, infrastructure, manufacturing and engineering sectors seem to be optimistic too. “There is a large play to replenish good talent to further business. There are active hiring plans reported by Indian employers and the overall employment outlook, though a bit conservative, is bullish and upbeat,’’ added Gandhi.
Chennai has scored the highest improvement on employment outlook with a rise of 37 points, followed by Delhi and Pune at 33 points and Hyderabad at 28 points. All these cities have also shown an increase in business outlook index while Pune topped the pack by scoring 47 points.
Bangalore showed an increase of 9 points in the net employment outlook compared to the last quarter, one of the weakest increases among cities, and an 18 point increase in the net business outlook. However, the city accounted for the highest attrition rate, IT accounts for over 80% of the city’s total labour pool, at 23% in the last quarter, over the previous quarter’s 16%. Much of the attrition could be involuntary attrition (or layoffs). Attrition was also high in Hyderabad and Chennai while Kolkata reported the lowest.
Mosaid sues IBM for patent infringement
Source: Reuters
Patent licensing firm Mosaid Technologies Inc said on Monday it was taking IBM to court for allegedly infringing on six of Mosaid's U.S. patents.
Mosaid said the long-running dispute was over IBM's making and selling of microprocessor and application specific integrated circuit (ASIC) products.
The Ottawa-based company said it was granted the patents on its fundamental dynamic random access memory (DRAM) circuit inventions.
"We are taking this action to protect our intellectual property because we have been unable to reach a reasonable settlement with IBM, despite many years of negotiation," John Lindgren, Mosaid's president and chief executive, said in a statement.
"We believe that IBM requires a license to our patents for its microprocessor and ASIC products that contain embedded DRAM. Mosaid has licensed virtually 100 percent of the global commodity DRAM industry, including signing patent license agreements covering embedded DRAM products. The value of our patents is internationally recognized."
Mosaid filed the suit in the U.S. District Court for the District of Delaware.
IBM signs 10-year IT outsourcing agreement with Innovation Auto Risk
IBM on Monday signed a 10-year information technology (IT) outsourcing agreement with Innovation Auto Risk, an established leader in the Indian market providing claims management services and other related solutions to insurers & fleet management companies.
As part of the agreement, IBM will deploy server, storage, networking and security IT infrastructure to be hosted at a data center in Delhi. IBM will provide 24x7 onsite infrastructure monitoring services from an onsite command centre. In addition, IBM will provide managed services and ongoing project management for infrastructure procurement, commissioning and configuration, as well as hardware refreshes after five years.
IBM put together a customized end-to-end managed services package and introduced Innovation Auto Risk to an operating-expense driven model, rather than capital-expense driven model. This allowed the company to pay IBM as-it-grows its business operations thus removing the need for large capital influx to sustain its growth and expansion. This agreement aims to reduce Innovation Auto Risk’s capital expenditure on IT by 25%.
“Innovation Auto Risk needed to build a robust infrastructure to address the growing claims processing requirements of their customers and we were able to provide this using a unique model that helped them grow without the headaches of managing their back-end and the need for huge capital requirements,” said Jyothi Satyanathan, Country Manager, ibm.com, IBM India/South Asia remarked,
“We are delighted with our agreement with IBM and believe its technology expertise and focus on delivering cost-efficient solutions will help us achieve our growth strategy and higher levels of customer satisfaction,” said Manu Mehta, Director, Innovation Auto Risk.
The agreement was signed in the second quarter of 2009.
Kenexa set for major re-branding
Kenexa, the Pennsylvania (Wayne)-headquartered holistic HR solutions company with its global development centre at Vizag has taken up a major re-branding exercise, with focus on talent and work environment.
Ed Hurst, management consultant, Kenexa said, “We are now trying to help our clients to define what talent they require and develop effective ways of attracting, selecting, on-boarding, managing and developing individuals.
We are also focusing on understanding and creating work environments that will transform performance and business results. We have also brought in a unique approach to leadership development.” Hurst explained, “Our new solutions focus on how people can contribute to organisational success. This is a broad yet focused endeavour.”
At present, Kenexa operates in 18 countries. It has recently set up two offices in Vizag and Hyderabad. “When we foray into a new territory, we spend heavily on R&D. We invested $36 million in 2008 and in 2009, we have already spent $40 million in 2009,” he said.
Infosys to hire 100 in Australia
Infosys confirmed today that it intended to hire 100 staff in Australia over the term of its financial year. The positions would be senior and middle level roles, according to a spokesperson for the company, but there was no information on where exactly those roles would be based. Infosys has offices in Melbourne, Sydney and Brisbane.
Infosys just won a deal with Telstra for application development and maintenance. The work, which Infosys would share with EDS, was worth US$450 million, of which EDS said it had netted US$190 million. The contract was mentioned in the company's global financial results for the quarter ending 30 June, released last Friday. The company's revenues for the quarter had declined 2.9 per cent year on year. The Infosys financial year started in April and ends in March.
Infosys to replace Indian staff overseas with local talent
With an increasing protectionist stance in the US, Infosys has decided to replace its Indian staff working overseas with local talent. But while recruitment is on track overseas, back home increments and hiring are frozen and employee numbers dipped reports CNBC-TV18’s Kritika Saxena.
Infosys is going slow on hiring, and plans no increments or salary cuts for its offshore employees. Infosys will maintain its onsite-offshore mix but will look at replacing Indian employees with local talent. It attributes this change in stance to a soft job market and the pressure of protectionism overseas.
Says Mohandas Pai, Member of Board & Director-HR, Infosys, "It will be a replacement in the sense that you will have a person hired locally to work there replacing a deputy who goes from here. So to the extent that you will not add to the on site staff if there is no work so it will be a replacement."
Infosys says there will be no difference in the salaries given to locals or Indians.It's headcount seems to have marginally fallen by 1% this quarter. Reason, low gross additions at 3538, a 39% drop from 4935 last quarter. Another reason is the outplacement of 617 non-performers and an exit of 750 employees. But Infosys says that days of poaching by competitors are over and the employees had left the company for further education.
“If you look at people who left us to go to other companies, the percentage actually comes down. Normally it is about 45% and right now it has come down to maybe about 18%,“ Pai said. The good news is that no salary cut is expected for now. Infosys is betting big on investment for sales and marketing, it will honour all its hiring commitments, but tread a cautious path till mid 2010 by when it expects recovery returning to the IT sector.
