Friday, October 30, 2009


Premji assures support for affected staff in France

Wipro Chairman Azim Premji today assured the French government that the 60-odd employees working with the company’s wireless IT division in Sophia Antipolis would receive support, even as it plans to exit the wireless intelllectual property (IP) product business.

During his discussion with Christian Estrosi, ministry of industry (Paris), Premji said: “We reiterate our commitment to France, a key growth market for Wipro. We look forward to growing our presence, serving our customers effectively and creating employment opportunities in the country.”

He explained that his company had implemented exemplary social measures to support the employees at the Sophia Antipolis centre who were affected due to Wipro’s worldwide exit from the IP connectivity business. These measures include support to encourage employment and entrepreneurship, as well as financial benefits.

During the discussion, Estrosi reiterated a “strong attachment to the fact that all the employees of Sophia’s centre can find again a professional future as quickly as possible, through solutions of employee take over and/or of company creation carried by employees”.

Talking to mediapersons during the company’s quarterly results announcement this week, Wipro officials had stated that the company had come to an amicable settlement with the affected employees in France. As a part of this, Wipro had offered the IP developed at the centre to the affected employees at Sophia Antipolis free of charge. Besides, the company had offered its office space and equipment free for charge to those employees for one year.

Since the last three years, Wipro has implemented its development plan for its IT services in the French market. Christophe Martinoli, head of France, Wipro Technologies, said the company intended to double its staff base and revenues in France in the next 18 months.

Recession over? GDP grows 3.5%

The U.S. economy grew more than expected in the third quarter, according to the government's initial report on gross domestic product.

The Commerce Department says GDP grew at an annual rate of 3.5 percent last quarter, the first positive quarterly growth in a year, and the largest quarterly advance since the third quarter of 2007.

GDP contracted by 0.7 percent in the second quarter.

Third quarter growth was led by double digit gains in durable goods and residential real estate, categories propped up by government stimulus programs like the first time home buyer credit and the cash for clunkers program. While that raises questions about the sustainability of growth as stimulus programs unwind, the Obama administration did not hesitate to take the credit.

"Today's numbers indicate that the tough decisions this administration made to rescue the economy from the abyss were correct," said Commerce Secretary Gary Locke in a statement. "We're headed in the right direction, and even though there are still too many Americans out of work and still much work to be done, without the action taken in the early days of this administration, the pain families are feeling today would be much worse."

The Labor Department reported Thursday that first time jobless claims totaled 530,000 last week, although the total number of Americans currently receiving unemployment benefits fell 148,000 to 5.8 million, the biggest one week decline since July.

The official declaration of the beginning and end of a recession has traditionally been given to the National Bureau of Economic Research, which has not raced to make any such declaration. Its Web site continues to mark the endpoint of the current recession with a question mark.

iGate to hire 1,500 people next year

IT services player iGate has announced that it will hire 1,500 people in 2010, following a rebound in IT outsourcing contracts. iGate said the plan to increase the headcount was a reflection of the improving business environment.

Said iGate CEO Phaneesh Murthy, "We believe there is already a revival in the demand side as the companies have started spending on discretionary projects. The IT budgets are also expected to increase by 2-4 per cent, in 2010." He was in Bangalore on Thursday to inaugurate its new facility, measuring 1.15 lakh sq.ft with a seating capacity of 1,050 people.

The Nasdaq-listed company has 6,400 employees. In the fourth quarter of the present calendar (Oct-Dec 2009), iGate intends to hire 300 people, including 100 for BPO services.

Murthy said, while the pricing environment largely remained stable, the company was seeing a huge increase in the number of first time outsourcers. Of the 12 new clients iGate added during the last two quarters, 11 were first time outsourcers. "This indicates that offshoring to locations like India is expected to increase in the coming days," he added. iGate had reported revenues of $49.1 million in the September quarter.

The company is present in India in four locations including Bangalore, Hyderabad, Chennai and Noida. It has a near-shore centre in Mexico as well. Its new facility is located in iGate's 13.5 acre campus.

According to the company, special efforts were made to make the new phase green by introducing LED and solar lighting, an ozone-friendly air conditioning system, organic waste converter and a wastewater recycling system.

iGate has taken on a carbon footprint estimation study to determine the Green House Gas (GHG) inventory across all its global delivery facilities in India, Australia and Mexico.

Sasken to tie-up with US-based Ingenient Technologies

Sasken Communication Technologies on Wednesday said that it will acquire the product portfolio and certain customer contracts and assets of US-based Ingenient Technologies, a highly professional multimedia software solutions company.

Ingenient will also transfer engineering and sales teams (including some in Korea and Japan) to Sasken. Sasken did not reveal the value of the deal.

According to Sasken, the acquisition of these assets are in line with its strategy of diversifying its portfolio and expanding into market segments like consumer and automotive electronics.

The transferred set of engineering employees in the US will form the core of Sasken’s Chicago development centre.

Sasken will now have a research and development centre in the US, which will be a beachhead for new product development supported by multi-site service delivery models. Sasken will also have presence in Korea and will strengthen its existing center in Japan, both countries being epicenters for development of consumer and lifestyle products.

Founded in 2000, Ingenient is a global provider of embedded multimedia software solutions to multinational companies ranging in size from tier one original equipment manufacturers to high-tech startups. Ingenient’s software solutions enable creation, delivery, management and presentation of rich multimedia content, according to Sasken.

Utilising these software solutions, Ingenient’s customers can immediately create leading-edge multimedia products for the consumer electronics, enterprise, security and surveillance, and infrastructure markets.

Rajiv Mody, Sasken’s chairman and CEO, said, “As a company with high professional standards, Sasken has always aimed to be the supplier of choice for embedded R&D services. Ingenient’s multimedia solutions combined with Sasken’s global reach and India-based development centers will enable us to offer a compelling portfolio of value added solutions.”

SAP cuts sales forecast

SAP AG, the world’s biggest maker of business-management software, cut its sales forecast for the year as clients in emerging markets and Japan spent less than it anticipated, sending its stock to the biggest drop in a year.

SAP, which today reported a less-than-expected 12% increase in third-quarter profit, cut its sales outlook for the second time this year. Software and related service revenue will fall between 6 percent and 8 percent in 2009 at constant currencies and excluding a writedown from acquiring Business Objects SA, it said in an e-mailed statement. In July, it had predicted a drop of 4 percent to 6 percent.

“These are really disappointing figures, much worse than expected,” said Ulf Moritzen, a fund manager at Aramea Asset Management AG in Hamburg, which oversees about $1 billion, including SAP shares. “Clients are obviously still reluctant to invest in software, so cost-cutting is the only option SAP has at the moment to safeguard profitability.”

SAP, which counts Apple Inc., Coca-Cola Co. and Wal-Mart Stores Inc. among its customers, said although it’s seeing some “signs of stabilization, the market remains difficult.” Last month, SAP’s biggest rival, Oracle Corp., reported sales, including revenue from acquired companies, slid 6.6 percent to $5.06 billion in the three months to August 31.

In the third quarter, SAP faced “challenging conditions in some of the emerging markets and in Japan,” Chief Executive Officer Leo Apotheker said in an interview on Bloomberg TV today. “We adjusted our guidance because 2009 is a very peculiar year, it’s very hard to predict.”

Cisco's revenues inch closer to $1b mark

As Cisco, the world’s largest computer networking equipment maker, approaches around $1 billion in revenues from India, the company is hoping that increased government spending on technology will keep the momentum going.

Cisco has already won three contracts awarded by State Electricity Boards (SEBs) for computerization, each being worth around Rs 200-500 crore. These projects are part of the government’s bigger agenda for computerisation of the power sector by investing nearly Rs 10,000 crore.

"Government and PSUs were the top revenue earners for us, replacing IT services customers who were the biggest until slowdown happened," said Naresh B Wadhwa, managing director of Cisco India. Cisco also won the networking portion of Rs 1,200 crore ESIC contract along with Wipro.

Cisco does not give out its revenues from the Indian market, but according to Voice and Data, the company’s India revenues were around Rs 4,500 crore last year. "There are many markets that are still in the making, such as traffic management, water management and security. Transport is also a big opportunity," said Mr Wadhwa.

An expert tracking Cisco’s Indian wins said many tenders specify Cisco switches, which works to the company’s advantage. "Some of the tenders specify Cisco switches instead of a more generic specification," he said.

Some of Cisco’s competitors for high-end services are Nortel and Avaya and in networking, switches players such as DAX and Chinese vendor, ZTE. "Nortel’s filing of Chapter 11 has not impacted its business in India much and large firms such as Reliance continue to use its products," the expert added.

Cisco is also participating in state-wide area network (SWAN) contracts for wiring state and district headquarters in Gujarat, Punjab, Haryana, Tamil Nadu, Jharkhand, Sikkim, and bidding for contracts for setting up state data centres (SDCs).

Around 18 states are coming out with tenders for setting up SDCs. Mr Wadhwa expects that following SWAN contracts, there will be contracts to network with state departments like revenue, police and health. "Once you have the infrastructure, you add more applications and keep building on top of it," he said.

Wipro to strengthen presence in France, grow job opportunities

Wipro Chairman Azim Premji has reiterated the company's commitment to France, a key growth market for the company, by growing its presence and creating employment opportunities in that country.

Premji, who met Christian Estrosi from the Ministry of Industry Paris, during a high-level delegation meeting in Paris yesterday to discuss the Wipro's IT services growth strategy for France, said the IT firm was committed to work with local authorities to encourage local employment regeneration.

During the discussion, both Estrosi and Premji also spoke about Wipro's worldwide exit from the IP connectivity activity, which implied closure of its Sophia Antipolis centre, a Wipro release said here today.

During the discussions, Wipro reiterated the measures being implemented to support the employees who will exit from the company, including providing financial benefits.

According to Christophe Martinoli, Head of France, Wipro Technologies, "With continued investment and our focus in creating a skilled talent base in France, we intend to double our staff base and revenues in the next 18 months to serve our French customers across industries such as retail, manufacturing, telecom, energy and utilities, banking and insurance"

The company said over a period of time, it had increased its headcount in France from less than 30 to 170.

India asks UK to open doors to its IT professionals

Britain has promised to look into suggestions to allow more Indian IT professionals into UK to build up a strategic partnership in the information technology field.

The suggestion was made by President Pratibha Patil to British Prime Minister Gordon Brown during a meeting here at the 10, Downing Street last night.

Patil stressed on the need for greater participation of Indian IT professionals in UK, which Brown assured to look into, Foreign Ministry Officials accompanying the President told reporters.

The US and other major EU nations have allowed greater flow of Indian IT professionals, which has led to a boom in the sector in these countries and apparently Patil's suggestion was to ensure that Britain did not lag behind.

Brown said India-UK cooperation in IT was a very important area for the growing bilateral strategic partnership, officials said.

The 30-minute long meeting between the two leaders also focused on issues of bilateral cooperation in economy and education.

Brown told the President that business ties between the two countries were flourishing with a large number of Indian companies now listed on London Stock Exchange.

Britian is also one of the largest foreign direct investors in India.

During the meeting, Brown also expressed keenness in further boosting India-UK cooperation in the field of education, the officials said.

The UK has recently opened the doors of most of its varsities to Indian students, and in this regard the discussion between two leaders covered expanding the cooperation to premium institutions of higher education in India, including IIT and a Central University.

Brown said that the UK was again becoming a large destination for Indian students, a fact pointed out by Patil and Queen Elizabeth during the State Banquet hosted at Windsor Castle.

Patil is the first Indian head of state to visit United Kingdom in last 20 years.

The two leaders exchanged their views on various issues pertaining to social spectrum, Millennium Development Goals and various aspects of women empowerment and dwelt on the role of women in contributing to democracy and development, the officials said.

The Prime Minister said that UK was very keen to partner India in socio-economic sector, the officials said.

US Air to cut 1,000 jobs, reduce routes

US Airways will cut 1,000 jobs and scale back its flying routes as part of a restructuring plan to turn the struggling airline profitable again, the company announced Wednesday.

The cutbacks that will happen in the first half of 2010 include 200 pilots, 150 flight attendants and 600 airport passenger and service ramp positions, US Air said in a statement.

The Tempe, Ariz.-based airline will refocus its routes to fly through its three major hubs -- Charlotte, N.C., Philadelphia and Phoenix, Ariz. -- and Washington, D.C., through which the airline runs an hourly shuttle service to New York's LaGuardia Airport and Boston.

The change will reduce flights from Las Vegas to 36 daily departures by February next year from its current 64 flights.

The crew bases in Boston, LaGuardia and Las Vegas will also close in 2010 and relocate to one of the hubs or Washington.

US Air (LCC, Fortune 500) will drop service in Colorado Springs, Colo., and Wichita, Kan., and will also cut international flights.

The carrier will suspend flights between its Philadelphia hub and European cities including Birmingham, England; London Gatwick; Milan, Italy; Shannon, Ireland, and Stockholm, Sweden. Flights between Philadelphia and Beijing are also on hold "until economic conditions improve," the airline said.

IBM to Give Employees 100% Coverage of Primary Care

International Business Machines Corp., the world’s largest computer-services company, will provide U.S. employees with 100 percent coverage for primary care, a policy designed to curb health expenses.

Beginning next year, employees will no longer have to pay deductibles for visits to in-network doctors such as internists, general practitioners and pediatricians, Armonk, New York-based IBM said today in a statement. The company said it is one of the first U.S. employers to adopt such a policy.

The decision is aimed at encouraging employees to visit the doctor more often, so illnesses are treated before they become serious. IBM said the policy will cover about 80 percent of its 115,000 U.S. employees. The other 20 percent belong to health maintenance organizations.

“We believe in giving people incentives to get health care early and often,” said Marianne DeFazio, director of health- care benefits and strategy at IBM. “When people have no barriers to getting primary care, you catch things early and you prevent things.”

IBM said it has invested $79 million in nutrition and exercise programs between 2004 and 2007, saving more than twice that amount in health-care costs.

DeFazio declined to say how much the move would cost IBM in the near term. More prevention will eventually cut health cost inflation, she said.

“We believe more efficient and individualized care will result in better outcomes and lower costs for everyone,” she said.

Primary Care

IBM will have to blend financial incentives for primary care with information to push costs down, said Lisa Suennen, a health-care venture capitalist at Psilos Group in Corte Madera, California. Insurance plans at some companies give diabetics incentives to get primary care, and add education programs to help patients understand how to care for chronic illness, she said.

What IBM is doing “is not common at all, and it’s a good start,” Suennen said. “But it needs to be coupled with information to coach the patients.”

Previously, IBM required health-plan participants to pay 20 percent of the cost of primary care, DeFazio said. The company already covered preventive measures such as mammograms for women over 40 and colonoscopies for employees over 50, DeFazio said.

IBM rose $1.37 to $122.87 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have advanced 46 percent this year.

Syntel's third quarter results beats Wall Street expectations

Syntel's revenue for the third quarter increased one percent to $104.7 million (Rs.506 crore), compared to $103.8 million (Rs.502 crore) in the prior-year period, and increased five percent sequentially from $100.1 million (Rs.484 crore) in the second quarter of 2009.

Sequential revenue improvement was driven by its Applications Outsourcing service offering, and growth was broad-based across all verticals. During the third quarter, Applications Outsourcing accounted for 74 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 18 percent, e-Business contributing six percent and Team Sourcing at two percent.

The Company's gross margin improved to 49.3 percent in the third quarter, compared to 44.3 percent in the prior-year period (500 bps increase) and 48.2 percent in the second quarter of 2009 (110 bps increase) .
Selling, General and Administrative (SG&A) expenses were 18.1 percent in the third quarter, compared to 19.1 percent in the prior-year period and 20.8 percent in the previous quarter.

The Company's gross margin improved to 49.3 percent in the third quarter, compared to 44.3 percent in the prior-year period (500 bps increase) and 48.2 percent in the second quarter of 2009 (110 bps increase) .
Selling, General and Administrative (SG&A) expenses were 18.1 percent in the third quarter, compared to 19.1 percent in the prior-year period and 20.8 percent in the previous quarter.

Syntel's income from operations expanded to 31.2 percent in the third quarter as compared to 25.2 percent in the prior-year period (600 bps increase) and 27.4 percent in the second quarter of 2009 (380bps increase).

"Increasing stability in the business environment and a gradual improvement in customer confidence had a positive effect on our top line during the third quarter," said CEO and President Keshav Murugesh. "While our clients remain comfortable in moving forward with cost reduction initiatives, they are now increasingly willing to discuss longer-term business plans and strategic technology investments."

"The strong financial and operating discipline at Syntel has been evident in our financial performance during a very difficult nine month period. We expect that as demand for offshore services improves, costs of doing business in India will increase resulting in margin pressure. Syntel continues to invest in the people, infrastructure and new services necessary to drive long-term sustainable value for all of our key stakeholders."

Based on current visibility levels and an exchange rate assumption of 47.0 rupees to the dollar, the Company is updating 2009 guidance from Revenue of $395Mn (Rs.1,910 crore) to $415Mn (Rs.2,007 crore) and EPS of $2.40 to $2.50 to Revenue of $405Mn (Rs. 1,959 crore) to $408Mn (Rs.1,973 crore) and EPS of $2.60 to $2.65.

Beware of the leaked version of Google Chrome OS

Google asked people not to believe the leaked version of Chrome operating system. Recently, Google announced that it is coming up with its own OS, and after that there have been rumors about a leaked version being available for download. The 'leaked version' is a fake that is not related to Google at all.

Even a trusted source like Gizmodo has perpetuated the myth that Chrome is available. Its tough when there is so much pressure to be the first to publish a breaking news story. Gizmodo recently reported a story of alleged Chrome operating system screen shots, but later updated the story to state that it was verified as a fake. Gizmodo pushed the story of the fake download with a story titled Google Chrome OS Now Available, Go Get It .

The number of sites and individuals who are propagating the story is lending credibility to the false rumor. A quick scan of Twitter or a quick search of the Web will lead to all sorts of seemingly reputable sources talking about the availability of the Chrome OS beta. Most of the excitement though can be traced back to Gizmodo. It is a trusted source of breaking tech news and it doesn't take much for an announcement on Gizmodo to go viral on Twitter and blog sites.

The site in question appears legitimate in so much as it is actually on the domain. The site lists features like a GNOME desktop, Google Picassa integration, and a Flash Player plugin. It comes complete with a few Google logos scattered about.

However, it is actually a product of Google Sites. Basically, someone created a page with Google Sites which points to and populated it with basic information about the Chrome OS which could be extracted from publicly available details Google has shared, then added a link to download some other completely unrelated tool.

To be fair, the site owner did include a disclaimer at the bottom stating "Chrome OS is not related to Google. Service is provided by SUSE Studio. Seethe license." Google has since disabled the site for violating the Google Sites terms of service.

Chrome sounds like it has promise, although the operating system market is a tough sell that is already filled with dominating players like Microsoft and Apple. Of course, Google hasn't shied away from head-to-head battles with either of those companies in other arenas like Web search, mobile phone operating systems, or web browsers.

In the meantime, if a guy in a dark alley whispers that he has an early version of Chrome OS available, there is good reason to be suspicious. Google may have shut down this fake Chrome OS site, but others are sure to follow. If it walks like a duck, and quacks like a duck, its probably a duck. Check your sources and exercise some common sense before you rush to download a fake, and potentially malicious, Chrome OS.

Sun CEO's salary slashed 37%

The value of Sun Microsystems Inc CEO Jonathan Schwartz's latest pay package dropped 37% from last year as the company lost more than $2 billion and was in such dire financial shape that it was forced to put itself up for sale.

In April, Oracle Corp. won a bidding contest with IBM Corp. for Sun, but can't complete its $7.4 billion deal yet because it is being held up by antitrust regulators in Europe who are worried about possible harm to competition in the database market.

Schwartz, 43, received a pay package for the 2009 fiscal year valued at nearly $7 million, according to calculations by The Associated Press from Sun's proxy filing Wednesday with the Securities and Exchange Commission.

Last year, his compensation was valued at about $11.1 million, according to the AP's calculations.

His $1 million salary was unchanged, and the roughly $55,000 Sun spent on Schwartz's chauffeur and matching 401(k) contributions was only a few thousand dollars less than last year.

The key difference was that Schwartz wasn't given a cash bonus this past year (he received a $1 million bonus the year before) and received stock grants worth $3 million less than in the 2008 period.

Schwartz did receive restricted stock worth $3.16 million on the date it was granted and $2.8 million worth of performance-based restricted stock. But the performance-based units were canceled because Sun's performance didn't meet the board's expectations.

Santa Clara, Calif.-based Sun lost $2.2 billion on $11.4 billion in revenue in the fiscal year ended June 30, compared with profit of $403 million on $13.9 billion in revenue in the prior year. Sun's scattershot performance since the dot-com meltdown nearly a decade ago was a key factor in Sun's decision to sell the company. Sun, which makes computer servers and software, has struggled because of a shift toward cheaper servers and heavy expenses at the company despite rounds of layoffs.

Sun said last week it plans to eliminate up to 3,000 jobs, or 10 percent of its global work force, over the next year.

Schwartz had $694,824 worth of restricted stock vest during the latest fiscal year, according to the filing. He didn't exercise any stock options.

Thursday, October 29, 2009

Ex-AMD CEO linked to Galleon scandal

Chip maker Advanced Micro Devices Inc. is "thoroughly reviewing" published reports fingering former chairman and CEO Hector Ruiz as the AMD executive who gave confidential company information to a defendant in the Galleon Group insider trading case.

"We are not aware of any allegation of criminal misconduct on the part of any current or former AMD employees, nor have any current or former AMD employees been charged with a crime," AMD said in a statement Tuesday. A spokesman for the Sunnyvale, Calif.-based company declined to comment further.

Citing an unnamed person familiar with the matter, The Wall Street Journal reported on its Web site Tuesday that Ruiz is the AMD executive described in the Manhattan US Attorney's Office complaint as passing inside information to defendant Danielle Chiesi.

Chiesi, 43, was among six hedge fund managers and corporate executives arrested earlier this month in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits. Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc that had assets worth about $1 billion under management, according to court papers.

Raj Rajaratnam, the Galleon Group portfolio manager at the center of the case, last week said Galleon would wind down its funds after publicity surrounding the case led some investors to pull out money.

Before he left AMD's CEO job last year, Ruiz was only the second person to run the company other than founder and longtime CEO Jerry Sanders and was one of the few Hispanic CEOs of a major U.S. corporation. Ruiz, now 63, left amid mounting investor frustration over AMD's finances. He was instrumental in orchestrating a fix: the spinoff of AMD's manufacturing operations into a company called GlobalFoundries Inc, of which he is now chairman.

A GlobalFoundries spokesman would say only that the allegations predate the company's launch. AMD, which had $5.8 billion in revenue last year,

is small compared to its rival Intel Corp., but is significant because it is the world's No. 2 maker of microprocessors. Microprocessors are the "brains" of personal computers. Intel owns about 80 percent of that market — AMD essentially has the rest.

Before word of Ruiz's possible involvement surfaced, the highest-ranking corporate executive ensnared in the insider-trading scheme was an IBM Corp senior vice president, Robert Moffat, who was once considered a possible candidate for CEO. Moffat was put on leave after the allegations surfaced and no longer serves as an officer of the company. Moffat is accused of leaking secrets about IBM's earnings and financial dealings with partners, including AMD.

That information allegedly included AMD's plans for GlobalFoundries. IBM was involved in those talks because it has a technology development partnership with AMD.

The indictment against Moffat and the person he's accused of supplying information to, Chiesi, says that an AMD executive also provided inside information to Chiesi, but that executive is not named.

The indictment quotes Chiesi allegedly boasting in wiretapped calls that she spoke multiple times with the AMD executive about the deal. The indictment quotes the AMD executive in multiple calls to Chiesi describing the timing and financial details of the deal, such as what would happen with AMD's debt under the new structure. In one call, on Sept. 16, 2008, the AMD executive was quoted as saying the spinoff wouldn't be announced until the following month and that it was going to "shock the hell out of everybody."
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HCL may lose BSNL IT contracts worth Rs 1,700 cr

IT firm HCL Infosystems will have to give up two large IT contracts jointly worth over Rs 1,700 cr after the company emerged as the lowest bidder in all the four zones for state-run Bharat Sanchar Nigam’s (BSNL) $1-b IT outsourcing contract. This is because, as per the BSNL tender norms, a single company cannot be awarded more than 50% of the total contract.

After emerging as the lowest bidder or L1 in East, West and South zones, HCL Infosystems has now become L1 for managing BSNL’s IT requirements in the northern region also. But considering the telco’s tender conditions, the IT company can be awarded only a maximum of two contracts thus implying that it can provide solutions to BSNL in only two regions. In all the four zones, HCL’s bid has been supported by HP, which will supply hardware and systems and Convergys, which will provide billing solutions.

HCL Infosystems chief executive Ajai Chowdhry told ET on the sidelines of an event in Delhi that the company has emerged as the lowest bidder in all the four zones adding that BSNL was yet to award the contract. Asked about HCL’s preference for the zones Mr Chowdhry said: “It is for the telco to decide which regions will be allotted to us. We are well placed as far as positioning is concerned”.

“As is the norm at BSNL, the financial bid by HCL Infosystems will be evaluated and it will go through the process of negotiations. The entire procedure will take some more time, after which the contract will be awarded,” Mr Chowdhry added.

Earlier this year, HCL had won Rs 230 cr enterprise resource planning (ERP) contract from BSNL. HCL’s mandated surrendering of two contracts may benefit other IT firms like TCS and Mahindra Satyam. For instance, TCS is the second lowest bidder for south zone and west zone while Mahindra Satyam along with Spanco is next to HCL is L2 the East zone.

In the West zone, HCL’s had bid amount was for Rs 980 cr, followed by TCS which quoted Rs 906 cr and Spanco/Mahindra Satyam at Rs 1,042 cr.

In the East Zone, HCL Infosystems was the lowest bidder at Rs 861 cr followed by Mahindra Satyam/Spanco (Rs 904 cr), TCS (Rs 934 cr) and Prithvi Information (Rs 2,000 cr). In the South Zone, HCL’s bid was of Rs 865 crore, followed by was While TCS’ Mahindra Satyam, Wipro and Infosys bid Rs 906 cr, Rs 1,030 cr, Rs 1,500 cr and Rs 2,000 cr respectively.

This IT outsourcing contract is part of BSNL’s 93-million line GSM project worth over $1 b, for procuring network equipment, tower infrastructure and technology solutions and services. The project was split into four zones to allow companies to bid separately for each zone.

Australian telco to offshore 150 jobs to Mumbai

Australian mobile phone retailer Crazy John's is reportedly offshoring about 150 jobs to Mumbai where its parent company Vodafone Hutchison Australia (VHA) operates a call centre.

According to 'The Australian', around 200 employees of Crazy John's will face redundancy as part of its restructuring programme in the first half of 2010, when over 150 jobs will be shifted to Mumbai.

The remaining staff of Crazy John's that will be made redundant later would initially come from finance, credit management and customer relations departments, sources said.

"Their tasks would be absorbed by VHA," sources said.

Crazy John's unit and mobile virtual network operator GRLmobile is a prepaid service aimed at the female youth market.

In August, company executives dismissed talk of GRLmobile's impending demise describing it as pure rumour.

Crazy John's Chief Executive Brendan Fleiter had said GRLmobile's sales channels -- Australia Post, Kmart, Target, Dick Smith and Crazy John's -- would increase over the next few months.

Crazy John's employees fear that VHA's Sydney-centric management is intent on wiping the slate clean and consolidating its operations under one roof.

A VHA spokesman declined to comment on possible retrenchments, saying "it's business as usual at Crazy John's".

No downturn for Wipro employees, attrition at 14 percent

There seems to be no impact of the economic slowdown on the Wipro employees, the company has witnessed an attrition rate of 14 percent, with voluntary attrition going up to 10.5 percent and involuntary attrition to 3.1 percent in the same period.

Wipro on Tuesday projected an earning of $1.11 billion from IT services for third quarter (October-December) of this fiscal (2009-10), as revenue for second quarter (July-September) at $1.06 billion was higher than the guidance of $1.03 billion.

"We expect revenues from our IT services business to be in the range of $1.09-1.11 billion in the third quarter, as we see more stability in volumes and pricing," Wipro Chairman Azim Premji said in a statement here.

In a regulatory filing earlier, the IT bellwether said net profit for the second quarter increased by 19 percent year-on-year (YoY) to Rs.11.62 billion, as per the Indian accounting standard.

The net profit is higher than the projection of Rs.10.6 billion by analysts who keep track of Indian blue chip firms in the technology space.

But consolidated revenue for the quarter under review (Q2) increased modestly by six percent YoY to Rs.69.17 billion, as per the Indian accounting standard.

According to the International Financial Regulatory Standard (IFRS), the company's net income at $243 million increased by 21 percent YoY, while total revenue increased by six percent YoY to $1.44 billion.

Revenue from IT services at $.106 billion was, however, four percent lower YoY though sequentially higher by 3.2 percent, as per the IFRS.

"Our broad portfolio of services and strong delivery excellence continue to position us as a partner of choice with customers," Premji noted.

Operating margins for IT services increased by 143 basis points to 23.8 percent sequentially and 279 basis points on annualized basis.

In rupee terms, revenue from IT services at Rs.49.96 billion is an increase of five percent YoY and 3.5 percent sequentially.

"Our unwavering commitment to operational improvements continues to pay dividend, resulting in double-digit sequential growth in net profit," Wipro chief financial officer Suresh Senapaty said in the statement.

The IT services business added 37 clients during the quarter.

The company's IT products business recorded 18 percent YoY growth to Rs.11.83 billion, while consumer care and lighting grew by 11 percent YoY to Rs.5.87 billion.

With voluntary attrition marginally increasing to 10.5 percent from 8.4 percent in the first quarter (April-June) and involuntary attrition to 3.1 percent from 1.9 percent in the same period this fiscal, the headcount for IT services business decreased by 630 people to 97,891 from 98,521 sequentially.

On annualised basis, the headcount has increased by 330 people from 97,552 in the second quarter of last fiscal.

At Microsoft, six Indians call all the shots

As the world turned its attention on Microsoft's launch of Windows 7, one thing went quietly unnoticed. Indians now don’t just have a foot in the door of technology, they have prised open the Gates. And literally has the keys to most of the doors at MS office.

Indeed, a quick roll call of the Microsoft global management team will reveal a distinct Indian trail.

Indians run some of the key businesses within Microsoft, with at least half-a-dozen of them among the top 25 out of the company’s 95,000-strong workforce.

The tenets of the world’s largest software company are being defined by the likes of S Somasegar of Chennai, Amit Mittal of Mumbai, Amitabh Srivastava from Kanpur, Gurdeep Singh Pall from Chandigarh, Satya Nadella of Hyderabad and Anoop Gupta of Delhi. Along with a few others, they run everything from cloud computing, unified communications to new software development initiatives at the software behemoth.

As part of the crack team, they report directly to the top four in the Microsoft management hierarchy, with some among them being Technical Fellows (the highest technical rank).

These ‘Made in India’ techies hold over 100 patents, have written key research papers in technical journals and are now driving the company to its next growth path.

Microsoft is not the only one witnessing a great Indian takeover. Several global technology companies have at least one or two Indians in the top management. Quite a shift, considering that not too far back Indian code writers were dismissed merely as ‘tech coolies’ doing the low-end tech jobs. Says Ravi Ventakesan, chairman, Microsoft India, “There’s a sea change on how Indians are seen. They are moving up in sync with contributions they have made to technology and business.”In Bangalore, Anshuman Das, co-founder & managing partner of CareerNet, a technology-focussed head-hunting firm reckons 20% of senior vice-presidents and above in several multinational technology companies could be Indians, up from almost zilch a few years back.

“This will pick up as Indians have now proven themselves. Many Indians from the 1988-1994 batch of IITs and other engineering institutes are in senior positions now.”

The bright kid from Hyderabad Public School, Satya Nadella, is Binging Google head on, being the senior VP, R&D, online services division, while Amitabh Srivastava, senior VP, Windows Azure, leads the development for Microsoft’s cloud computing business.

Srivastava reports to Ray Ozzie, chief software architect. Somasegar, senior vice-president, developer division (reports to Bob Muglia, president, server & tools), has over 4,000 people under him worldwide as he heads the developer division.

This is the division responsible for all new products including the recently-launched Windows 7. Somasegar started the India Development Center in Hyderabad and the Microsoft Canada Development Center in Vancouver. He holds four patents and has worked on eight different operating system releases before heading the developer division.

On the other hand, both Gupta and Nadella were also technical assistants to Bill Gates, advising the company founder on future technology trends. That was before they moved to their current roles with Anoop Gupta being the corporate VP, Microsoft Unlimited Potential Group, Education Product Group, Technology Policy & Strategy. He advises Craig Mundie (chief research & strategy officer) on technology, policy and strategy and also reports to him.

Says Amit Mittal, corporate VP, unlimited potential group, Microsoft (he reports to Mundie). “I worked on both the technology and business side in my 16 years at Microsoft. My group founded the BizTalk server, LiveMesh platform, Windows starter edition and netbook support.”

“My group is involved in development of new products that will create solutions for the next one billion people (those untouched by tech) and create value for Microsoft,” he explained.

Mittal has 20 patents to his credit for work done in mobile technologies, e-commerce and software services areas.
Just to give a feel of how well Indians are doing at Microsoft it’s important to understand the top management structure of the Redmond giant. Apart from the CEO, Steve Ballmer, Microsoft has seven presidents, 15 senior vice-presidents and about 100 corporate vice presidents.

Among the 15 VPs, there are four Indians and another 8-10 corporate VPs of Indian origin. Both India chairman of Microsoft and managing director Ravi Venkatesan and Rajan Anandan (Indian father and Sri Lankan mother) respectively are among the global corporate VPs. While Indian tech prowess is well acknowledged worldwide, it’s only in recent years (last 18-24 months) that the likes of the above have begun holding the reins. The Windows, as they say, have opened to the skies.

Infosys to open 22 BPO centers in Andhra Pradesh

Infosys BPO Limited, a subsidiary of IT major Infosys, signed an agreement with the Andhra Pradesh government to set up rural BPO centres in 22 districts of the state.

Infosys BPO Limited CEO and Managing Director Amitabh Chaudhry and State Society for Elimination of Rural Poverty CEO T Vijaya Kumar signed an MoU in this regard in the presence of Chief Minister K Rosaiah.

"The first such BPO centre will be set up in the next six weeks which will provide a testing ground for this model. The capital expenditure and other details will be worked out subsequently," Chaudhry said adding that all the 22 districts would have one BPO each.

"Over 1,000 people would get direct employment through the rural BPO centers in the next 12-15 months. Statistics suggest that direct employment generates 1.4 times indirect employment as well," he added.

Noting that Andhra Pradesh would be the first state where Infosys would be setting such facilities, Chaudhary said, "We are in talks with some other states as well for similar ventures but I can't disclose the names at this stage".

HCL Tech’s Q1 net profit falls 10%

HCL Technologies Ltd on Wednesday said its quarterly profit under US accounting standards fell 10 per cent.

Net income for the three months to September came in at Rs 320 crore, down from Rs 356 crore a year ago, the software services firm said in a statement. Revenue rose 29 per cent to Rs 3,031 crore, it said.

HCL Tech to hike salaries

IT services provider HCL Technologies will increase the salaries of their employees by 0-10 per cent from October 1, which will result in a drop in its gross margin by 130 basis points.

"We have decided to increase the wages of the employees effective from October 1, 2009 by 0-10 per cent and this will result in our gross margin dropping by 130 basis points for the next two quarters," HCL Tech CEO Vineet Nayar said after announcing the first quarter results.

At the end of September 30, HCL Tech's total employee strength stood at 54,443. The company added 665 professionals in the IT services segment during the period.

Further, the company is looking at acquisitions aggressively to 'fill in the gap' in its service areas and offerings.

"Acquisition is a part of our growth strategy. You will see acquisitions hopefully in BPO, enterprise application space, engineering and cloud computing side," Nayar said.

"We have successfully managed five acquisitions in the last 3-4 quarters. Our margins are back to its original level of 19 per cent," he said, adding there is no fixed price tag for the acquisition.

For the first quarter ended September 30, HCL Technologies today reported 18.50 per cent growth in its net profit at Rs 300.75 crore. Shares of HCL Tech were trading at Rs 317.80, down 0.56 per cent in afternoon trade on the BSE.

Tuesday, October 27, 2009


Wipro Q2 net up 19% at Rs 1,161 cr

Software firm Wipro today reported 18.76 per cent increase in its consolidated net profit at Rs 1,161.7 crore for the second quarter ended September 30, 2009.

The IT exporter had a net profit of Rs 978.2 crore in the September quarter of last fiscal, Wipro said in a filing to the Bombay Stock Exchange.

Total income of the company rose to Rs 7,057.4 crore during the July-September quarter of the current fiscal, from Rs 6,664.8 crore in the year-ago period, as per the Indian accounting norms.

"We see more stability in volumes and pricing as well as an improving demand environment. Our broad portfolio of services and strong delivery excellence continues to position us as a partner of choice with customers, as they focus on capital conservation and cost transformation," Wipro Chairman Azim Premji said.

The country's third largest software exporter's revenue from IT services in rupee terms grew by 5 per cent to Rs 4,996 crore from the year-ago period.
However, in dollar terms, the revenue fell by 4 per cent to $1,065.2 million.

"Looking ahead for the quarter ending December 31, 2009, we expect revenues from our IT Services business to be in the range of $1,092 million to $1,113 million," Premji said.

In the reported quarter, the firm added 37 new clients to its IT services business, which accounted for 72 per cent of its total revenue.

TCS: 40% growth tough to sustain

Tata Consultancy Services (TCS) said its deal pipeline for Asia-Pacific has improved in the past two months led by financial services and revenue could grow at a double-digit pace this year.

But the growth in business will still lag the 40 per cent compound annual growth rate (CAGR) seen in the past five years before the current financial year, Girija Pande, the Asia-Pacific head of India's top IT services company by sales said.

"Pipelines are improving, we think green shoots are now getting leaves," Pande said. "Will it come back and reach the 40 per cent revenue growth that we have in the past? I doubt it will. 40 per cent growth is not easy to maintain, but that's the CAGR we have, but certainly it will be double digit growth," he added.

Pande said the financial services firms are driving the deal pipeline for the Mumbai-based TCS, part of Tata Group that spans commodities, autos, and business services.

He reiterated that Tata Consultancy, which provides services such as consulting, system integration and manages call centres, is aiming to raise its headcount in China to 5,000 people in the next five years, up from more than 1,000 now.

Monday, October 26, 2009

IT firms dole out pay hikes, bonus to employees

From reinstating variable pay to hiking salary and giving surprise bonus, IT firms, which were worst hit by the downturn, gave more than one reason to their employees to cheer this festive season.

With the market conditions improving and economy showing signs of recovery, the IT firms such as TCS, Infosys, Mahindra Satyam, Google, NIIT and others, which are now seeing more business trickling in, have started reviving a lot of employee-centric policies.

Buoyed by a 29 per cent jump in profit for the July-September period, software exporter TCS had said it would pay 150 per cent of the quarterly component of the variable pay to eligible employees in India pay roll.

The company gave 100 per cent of the quarterly component of the variable pay in the first three months of the fiscal.

Earlier in the last quarter of the previous fiscal, it had frozen the variable pay due to global financial meltdown.

According to Gartner Principal research analyst Diptarup Chakrovorti, the focus has now shifted back to the people and retaining talent.

"In the past few months, HR heads were not bothered about attrition. Now, with the demands improving, companies wants to secure their talent pool with hikes, bonuses as human capital is the biggest challenge in the IT industry," he added.

Infosys techie arrested for raising bomb scare

A 25-year old engineer from Infosys, who thought that he would miss his Bangalore-bound GoAir flight because his train was running late, landed behind bars Sunday for causing a bomb scare at the Delhi airport.

Abhishek Gupta, who was coming from Lucknow in Gorakhnath Express and was expected to reach Delhi railway station by 6 a.m. and catch a Bangalore-bound GoAir flight from the capital's domestic airport around 8.45 a.m. Gupta's train got delayed and he reached airport around 9.30 a.m. "He called up the call centre of GoAir informing them that he was late because of train delays and asked the staff to reschedule his journey and put him on the second flight to Bangalore. But his request was refused by the GoAir staff," said a police officer.

"Gupta who desperately wanted to reach Bangalore, again called up at their call centre telling the staff that there was some suspicious object on the plane. He thought by doing this, the flight would get delayed for some time. And in the mean time, he would reach the airport and board the same flight," added the police officer.

After the call, the GoAir flight G8201 carrying 164 passengers was grounded and passengers asked to disembark. The bomb and dog disposal squads were pressed into service but nothing was found on the aircraft.

At 9:30 am, Gupta reached the airport and asked for the boarding pass. "It aroused some suspicion. Gupta was then cornered and questioned. He then confessed to causing the panic," said the police officer.

A case has been registered against him under appropriate sections of the Indian Penal Code and he has been arrested.

Siemens says it plans job cuts, gives no details

German industrial conglomerate Siemens AG is planning job cuts "in some business areas or at some locations," its CEO was quoted as telling weekly Welt an Sonntag today.

Siemens CEO Peter Loescher said that because of the financial crisis, "some parts of our business areas have had a decline of orders by up to 70 per cent."

"In this case, one can't just stand on the sidelines and watch," Loescher said, adding that the Munich-based company had to take the necessary steps to react to the crisis.

He did not elaborate where or when the company would lay off employees or how many people would be affected.

"It will take a long time until there will be an expansion of our capacities again, like the one during the boom years of 2007 and 2008," Loescher was quoted as telling the paper.

India Inc continues to see high attrition despite downturn

India Inc continues to see a double-digit attrition rate, this time of 13.8 per cent the highest in Asia Pacific region despite economic uncertainty, says a survey.

As per global HR consultancy Hewitt Associates' annual Asia Pacific Salary Increase survey for 2009-10, most Asian companies have continued to experience double-digit voluntary employee turnover rate amid the economic downturn.

"The top four markets reporting the highest turnover rate are India (13.8 per cent), Australia (11 per cent), New Zealand and China (10.3 per cent)," the report stated.

Turnover rate refers to the ratio of the number of workers that had to be replaced in a given time period to the average number of workers.

"While many would believe the economic uncertainty should help ease pain on high employee voluntary turnover, the Hewitt 2009/2010 Annual Asia Pacific Salary Increase Survey does not reveal the same. The comparatively high turnover rate...raises an alarm to the world," Hewitt Associates Regional Leader Broad-Based Compensation practice Stella Hou said.

The survey stated that 'better external opportunity' was consistently cited as the top reason for employees voluntarily leaving their organisations across all markets.

"This means companies continue to search for talented people even under a tough economic situation... organisations will continue to face a tight talent market," it added.

Other economies in the Asia-Pacific market, including Singapore, Korea and Thailand, are on high single digits in terms of employee turnover rates in the range of 8.8 per cent to 9.3 per cent.

"An organisation's ability to retain talent is a challenge facing all companies. This provides challenges to be more innovative in retaining the top people in their firms with a tighter budget," Hou said.

Companies need to focus on pursuing different talent management strategies suitable for its own workforce, while the most notably the variable pay programme was the most popular incentive adopted by most companies in the region.

"Companies realise that they cannot afford to lose talent. They know 'high performers' will help them lead the firm out of the storm into the winning field. Even for those companies experiencing unprecedented levels of uncertainty and cost reduction pressures, they tend to reward and retain their best talent with special incentives," Hou added.

The Hewitt survey revealed that the challenging talent market also compelled companies to reward talent differently with top performers receiving 50 per cent higher rewards than the average performers.

Aditya Birla BPO to expand headcount to 1,000 in 5 months

Aditya Birla Minacs, a BPO venture of the Aditya Birla Group, has drawn up huge expansion plans in Kolkata. The company, which soft-launched its operations in the city in March and employs 450 people, will expand its headcount to 1,000 over the next five months.

And not just that. Aditya Birla Minacs, which figures among India’s top 10 BPOs, is preparing a business plan which will see its headcount in Kolkata growing to nearly 5,000 people. This includes setting up a string of BPO facilities across the city as well as some 6-to-10 centres in some of the smaller towns in the state. It also plans to add more verticals in Kolkata from its present focus on telecoms.

The company’s top brass has recently made a presentation of its expansion plans in West Bengal to the state IT department. "The company is quite bullish about Kolkata and plans to set up one of their largest operations here," said the West Bengal IT secretary, Mr Siddharth.

Confirming the development, Aditya Birla Minacs CEO Deepak Patel said the company is looking at the hub-and-spoke model to expand its operations in West Bengal.

"We plan to have the hub facility in Kolkata which will support a number of smaller BPO centres in smaller towns. The small town facilities will support regional language BPO activities. While we will add some 550-odd people by March 2010, eventually our Kolkata operations will accommodate up to 4,000-5,000 people," Mr Patel told ET.

Aditya Birla Minacs’ Kolkata facility undertakes voice-based BPO activities for the group’s telecom venture, Idea Cellular. "Within the telecom vertical, we will also foray into non-voice areas like finance and accounting in Kolkata. This includes more such projects from Idea Cellular. We may also undertake BPO projects for other group companies out of Kolkata," said Mr Patel.

The company is also bullish about allocating projects from some of its others clients into Kolkata. "We will soon expand the scope of our Kolkata operations into newer verticals like banking, insurance and financial services (BFSI), health, public sector and manufacturing," Mr Patel said.

Incidentally, Aditya Birla Minacs believes in leasing out space for its facilities. It has just taken some additional space on lease in the city’s tech hub at Salt Lake Sector V. "We are currently in the process of identifying more locations where we can set up our facilities. We are particularly attracted by the huge talent pool available in the state," said Mr Patel.

While Aditya Birla Nuvo holds 88.28% in Aditya Birla Minacs, the balance 11.72% is owned by Canadian private investment firm ReichmannHauer Capital Partners. The company employs some 6,000 people out of Bangalore, Mumbai, Chennai, Aurangabad, Baroda and Kolkata. Another 6,000-odd people are employed in overseas facilities spread over the US, Canada, Europe and Philippines.

iGate to hire 300 by Dec

Nasdaq listed Software company iGate will hire 300 people by December as the company sees rebound in contract and demand picking up gradually by that time.

"We will hire 200 people for our software services and 100 for BPO by December to expand our existing operations. We believe there is already revival of demand for IT and BPO services and to meet that demand we are hiring," iGate CEO Phaneesh Murthy said.

The company had frozen recruitment earlier this year when recession was at its peak. Murthy said hiring reflect the slow tapering up of the recession. Last week, iGate posted a minor increase in its net income for quarter ending September 2009 at $8.9 million.

The company had a net income of $8.5 million in the Q3 of last year. Revenue from continuing operations, however, declined to $49.1 million during the quarter from $55.4 million made in the corresponding quarter of FY 2008, the company said.

The company added six new customers in the quarter. Its employee base in Q3 fell slightly to 6,380 employees as of September 30, 2009 compared to 6,407 in the same period last year.
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No pay for Satyam's Virtual Pool benchers from Dec 18

Close on the heels of the news that Mahindra Satyam will hire some 130 people, comes the announcement that it will not pay salaries to employees in the virtual pool after December 18. The employees under this virtual pool program (VPP) will, however, have the option to stay on the company’s rolls without pay till March 2010.

On June 11, the company announced the creation of the virtual pool, placing nearly 8,000 associates on the bench. "The surplus employees will be put in the VPP and paid basic salary, PF and medical insurance," Vineet Nayyar, CEO, Tech Mahindra, had said even as he ruled out any retrenchment.

In a recent email to the associates, the Satyam management stated, “We continue to recall, based on need and project requirements. However, it does appear that we may have constraints to reinstate all of those who are on VPP. Under the circumstances, we have informed our associates on VPP that we are constrained by this reality and have extended the option for them to continue on our rolls, albeit without any pay (should they choose to do so) for a further period of three months — that is, from December 18, 2009 to March 18, 2010.”

According to the news report, the VPP staff, during this period, will continue to have access to VPP services, including virtual learning and outplacement services. The official mail also said that the 'loss of pay' status would also be considered for the employees' service period.

A Mahindra Satyam spokesperson claimed that the company had absorbed about 1,500 associates from the virtual pool. The spokesperson also denied that the company was "laying off" people, even as the mail speaks of "separation of employment".

Incidentally, in the mail dated October 19, the company said, "In our earlier communication dated June 11, 2009, you were placed on VPP for a period of six months and accordingly, your Virtual Pool Leave is due to end on December 18, 2009. It is rather unfortunate that due to the continued economic constraints and business outlook, we do not anticipate that we will have the ability to recall many of our valued associates within the VPP period."

The company has a total of 34,000 associates globally.

Narayana Murthy turning venture capitalist

One of India's most successful entrepreneurs is turning into a venture capitalist (VC). Infosys Technologies' co-founder and chief mentor N R Narayana Murthy, on Thursday, sold shares worth Rs 180 crore to start a venture capital firm that would fund start-ups mainly in India. The idea is to encourage young entrepreneurs with brilliant ideas.

The VC will invest in startups operating in the areas of basic healthcare, education and nutrition. In a reversal of roles, in deciding to become a VC, Murthy is following in the footsteps of his daughter Akshata who was until recently a VC based out of Bay Area in Silicon Valley operating in the clean tech space.

Until her marriage to Rishi Sunak in August, she was a senior associate at Siderian Ventures. Murthy on Wednesday and Thursday sold a combined eight lakh shares of Infosys to raise money to fund VC firm. The number of shares owned by him in the company now stands reduced to 23.8 lakh valued at Rs 526 crore at Thursday's closing price of Rs 2,211.

The Murthy family's combined holding is around 5% with his wife Sudha owning the largest chunk. Murthy's individual holding in Infosys which has been less than 1% for a while now stands reduced to 0.4%. A Infosys' communique to the stock exchanges said, “Narayana Murthy has intimated the company that the proceeds of the sale (of 8 lakh shares) will be used for a proposed venture capital firm to be set up by him in India.''

That the "fund will primarily invest in India and may on a case-to-case basis consider investing overseas.''

Murthy had told TOI a couple of months back that he and his wife intend to give financial help to people who are already doing good work in the fields they have identified rather than re-invent the wheel themselves.

He had then said, "There are lots of fabulous initiatives in the field being executed by some wonderful people to address the issues that interest us. So, Sudha and I will give financial help to these people rather than do it directly."

On Thursday, Infosys stock was the biggest gainer among the 30 sensex constituents. It opened the session at Rs 2,221, traded between Rs 2,250 and Rs 2,182 and finally settled at Rs 2,212, up 2.1% over its Wednesday close at Rs 2,165. In early trades on Nasdaq, Infy ADRs were trading marginally lower at $47.64.

TCS plans to bid with CMC for Rs 5K cr UID projects

As India’s top tech firms prepare to bid for projects worth almost Rs 5,000 crore to set up the country’s unique citizen database, Tata Consultancy Services (TCS) plans to bid jointly for this opportunity along with CMC, a government-focused subsidiary it acquired some eight years ago.

The world’s biggest citizen database being set up by the Unique Identification Authority of India (UIDAI) will rely heavily on biometric and fingerprint information of the country’s 1.2 billion citizens, and would seek solution providers who can bring relevant expertise.

“Whether we bid as a consortium or not will largely depend on the conditions specified in the RFP (request for proposal). If they want a single point of contact, then CMC will act as a sub-contractor to TCS,” said CMC, CEO and MD R Ramanan.

On its part, TCS has been leveraging CMC’s relationships with different government agencies and departments in order to create a competitive government business, bigger than domestic rivals Wipro and Infosys. For instance, TCS worked together with CMC on winning the Rs 1,000 crore e-passport project awarded last year.

“For some of these projects, an existing capability and understanding brought by the age-old CMC helps them do better,” said a senior executive at one of the rival firms which had bid for the passport project.

“Training is one of the biggest bottlenecks in any government project-and this is where CMC proves an asset to TCS,” he added.

Experts such as Alok Shende, principal analyst of Ascentius Consulting say that CMC does provide TCS an edge over others.
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Wipro bags 10-yr IGI deal

IT major Wipro said it has entered into a 10-year IT outsourcing agreement with Delhi International Airport Ltd (DIAL) for providing IT infrastructure and services for IGI Airport here.

As part of the agreement, both the companies will form a joint venture (JV), to be named as Wipro Airport IT Services Ltd, with Wipro holding 74 per cent stake in the JV and DIAL the remaining 26 per cent stake, Wipro said in a statement.

The JV would be the innovation partner for DIAL and focus on emerging business models and technologies for airports as well as build competencies in airport specific applications, it added.

DIAL is a joint venture, comprising infrastructure major GMR Group, Airports Authority of India, Fraport and Malaysian Airports.

As per the agreement, Wipro would be responsible for end-to-end IT management in the IGI airport's new integrated terminal (T3), which will be one of the largest terminals in the world, for 10 years.

"We are delighted to have a strong partner like Wipro with proven capabilities in delivering superior business value as our partner in realising that vision for us," GMR Group Chairman (Airports) Kiran Kumar Grandhi said.

Wipro Joint CEO and member of the board Suresh Vaswani said, "This partnership will create new industry standards in modern airport management based on world class IT and business processes powered by innovation."

Thursday, October 22, 2009

6 Indian cities among 8 top global destinations for outsourcing

Six Indian cities - Bangalore, Delhi NCR, Mumbai, Chennai, Hyderabad, Pune - are among the eight top global destinations for outsourcing of services, according to a new survey released Tuesday.

The other two are the Philippines' Manila NCR and Ireland's Dublin city, according to the 4th Global Services-Tholons Top 50 emerging outsourcing destinations survey, jointly done by Global Services from CyberMedia and Tholons, a services globalisation advisory firm.

The Next 10 Outsourcing Destinations considered to be 'Top 10 Aspirants' from a total of 68 destinations is dominated by China's Shanghai, Beijing and Shenzhen, Vietnam's Ho Chi Minh City and Hanoi, Poland's Krakow, Argentina's Buenos Aires, Egypt's Cairo and Brazil's Sao Paulo.

Avinash Vashistha, CEO of Tholons says: "For a CIO today, finding a Centre of Excellence is more than just lower cost. It must consider location, risk mitigation for business, cultural affinity and scalability of the skilled workforce."

"The service providers need to think through their offerings so as to differentiate as the competitive advantage is rapidly vanishing due to cut throat competition and market saturation," adds Vashishtha.

India continues to top the list with revenues of $40 billion in IT-BPO export services in 2008. Indian IT-BPO export services posted 35 percent year on year growth rates in the last five years.

Interestingly India's FDI inflows posted the largest increase globally at 46 percent in 2008 -- from $25 billion to $46 billion even as global FDI flows decreased from $1.9 trillion to $1.7 trillion and several developing economies struggled to acquire investments from client nations.

Compared to the previous year's rankings, this year's study reveals minimal shifts in rankings because of the overall slowdown in the pace of outsourcing activity in the face of global recession.

Seven Chinese cities - Shanghai, Beijing, Shenzhen, Dalian, Guangzhou, Chengdu and Tianjin - and six Indian cities - Chandigarh, Kolkata, Coimbatore, Jaipur, Bhubaneswar, Thiruvananthapuram - make it to the list of next 60 outsourcing destinations.

The study lists India, Philippines, Ireland, China and Brazil among Top 5 Offshore Nations "with a high degree of maturity and record of successful delivery capabilities."

Canada, Russia, Mexico, Vietnam, Poland are listed as Top 5 Emerging Nations. The difference between the Top 5 and the Next 5 offshore nations is most pronounced in the service level maturity, the study said.
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TechM, Aegis, Conflux bag Rs 750-crore Etisalat deal

Etisalat DB Telecom, a new entrant in the Indian telecom space yet to launch services, has awarded an end-to-end outsourcing contract to three BPO service providers — Tech Mahindra, Aegis and Conflux, the company said on Tuesday.

The deal, spanning over five years, is valued at over Rs 750 crore. Etisalat is a JV between the UAE’s Etisalat Group and India’s Dynamix Balwas Group with Etisalat holding 45% in the JV.

Tech Mahindra will be responsible for managing Etisalat DB’s customer care operations in the north and the south, while Aegis BPO would manage the west and the central region. Conflux will be responsible for servicing customers in Bihar. Etisalat DB earlier awarded a $400-million IT outsourcing contract to Tech Mahindra.

The three BPO’s multi-site centers will provide both inbound and outbound services in the respective regional languages, besides English and Hindi. The three BPO vendors would provide customer management services to the operator, including billing, collections, customer service and customer retention. The centres will also be responsible for the complete management of back office processes. Customers will also have access to the contact center via e-mail, chat and SMS.

“We are confident that these associations will enable us to manage the customer lifecycle efficiently and provide a higher level of customer experience,” said the company in a statement.

The operator has telecom licence in 15 circles, including New Delhi, Haryana, Maharashtra, Mumbai, Uttar Pradesh and Bihar. The operator plans to start telecom services by the year-end.

SAP India Head Ranjan Das passes away

Ranjan Das, CEO and Managing Director, SAP Indian Subcontinent, who played huge role in taking business of SAP India to greater height in the last two years, died today morning due to heart attack. It is learnt that he collapsed at his home in Raheja Bay, Bandra, after returning from the building's in-house gym.

In July 2007, Das was relocated to Mumbai from SAP's offices in Silicon Valley in the U.S. At SAP Labs in the U.S, he co-founded the business unit for xApps, the first packaged composite business applications in the industry.

Friends in the industry said Das was an unlikely candidate for a heart attack, since he was known to exercise regularly and be scrupulous in his food habits. Nagaraj Bhargava, a former Director, marketing and strategic initiatives, SAP India, who worked with Das for more than 18 months, described him as a smart, intelligent and ambitious individual. "He would never miss a gym routine, come what may," Bhargava added.

Born in 1967, Das earned a Bachelor of Science degree in Computer Science and Engineering from the Massachusetts Institute of Technology and an MBA from Harvard Business School.

"He was a promising and dynamic person. This is a terrible loss and he will certainly be missed," said Girish Paranjpe, CEO, Wipro.

Prior to joining SAP, Ranjan was the Founder and CEO of Patkai Networks, a Silicon Valley-based venture capital-funded software startup company. Earlier, he held a variety of roles at Oracle in Redwood Shores, California. He started his career as a software engineer at InterSystems and Kenan Systems, both based in Cambridge, Massachusetts.

The long hours and frequent travel between different time zones required by the industry have led many people to wonder if executives in the IT industry are more susceptible to the dangers of a heart attack. However, Nasscom President Som Mittal said that it is not specific to the industry. "I don't think it is an IT industry issue. He never looked over-stressed to me. It is very unfortunate," he said.

iGate profit rises 50% to $9 mn

Nasdaq-listed iGate signalled a possible uptick in the fortunes of mid-size IT firms with a 4.7% sequential rise in its revenue to $49 million and a 50% growth in net income to $9 million for the September 2009 quarter.

“IT budgets are likely to witness a 2-4% rise next year,” iGate CEO Phaneesh Murthy told ET. Mr Murthy said that the company also benefited from business from companies that were offshoring for the first time. “First time offshorers and growth from existing customers helped to drive up sequential volume and revenue,” he added.

iGate added six new customers during the quarter. The second quarter results of IT majors, Infosys Technologies and Tata Consultancy Services, have cheered investors that better times may be ahead for the software industry, which took a hit from the collapse of some of its large clients as well as recession in the key US and European markets. “A lot of volume growth is starting from financial services.

Our outcome-based models have also found greater adoption among companies after recession,” said Mr Murthy. For the nine months ended September 30, 2009, the company generated operating cash flows of $31.8 million.

Indians to receive biggest salary hikes in 2010: Survey

Companies in Asia are set to offer bigger pay rises next year as the region continues to rebound from global recession, notably in India where base salary levels are poised to jump nearly 10 percent, a survey showed on Wednesday.

Salaries in Indonesia and China will also surge, by 8.7 percent and 6.7 percent respectively, whereas workers in Japan can expect a paltry 2.1 percent pay rise, according to the survey by Hewitt Associates.

The survey covered more than 2,000 local and joint-venture companies in the Asia-Pacific region. Salaries -- or annual guaranteed pay -- this year in Asia's fast-growing economic powerhouses China and India, at 4.5 percent and 6.3 percent respectively, were the lowest since 2005, Hewitt said.

Salaries barely grew at all in Hong Kong and Japan, this year as companies cut staff. More than 60 percent of companies surveyed in Hong Kong, Japan and Singapore froze wage levels, compared with only 26.1 percent in India and 30.8 percent in China.

Next year, only 6 percent of companies in India and 8.3 percent in China expect to freeze pay compared with 12-14 percent of companies in Japan, Singapore, Hong Kong and Australia.

It’s party time at Infosys

Say cheers to this! IT behemoth Infosys has reintroduced binge benefit to its 100,000 employees, entitling them to a fixed quarterly allowance to take time out for recreation.

The company had withdrawn this perk six months ago in the wake of the economic meltdown and stagnation of its business.

There is now buzz in the campus that Infy may soon reintroduce other incentives such as interest-free home loans to needy employees, car loans and other giveaways.

The news comes close on the heels of the IT bellwether revising its full-year revenue guidance upwards and is aimed at boosting staff morale.

Nandita Gurjar, senior VP and group head of HR at Infosys, confirmed the news.

“Yes, we have reintroduced this particular scheme. This was put on hold due to economic downturn. Under this scheme, the company pays Rs 300 per person every quarter as party incentive. All employees will get this benefit,” Gurjar said.

Infoscians say the sop marks a return to good times both for the company and for the employees located at around 50 offices across the globe.

The party incentive comes as the icing on top of an across-the-board salary hike and promotions announced earlier this month. Offshore salaries have risen by 8 per cent while onsite remunerations have gone up 2 per cent.

For quarter ending September 30, Infosys reported a rise in net profit by 7.5 per cent on a year-on-year basis at Rs 1,540 crore and 3 per cent revenues growth at Rs 5,418 crore, beating street expectations.

Windows 7 launch today

The world’s largest software company Microsoft will unveil the latest version of its operating system, Windows 7 on Thursday. The new operating system allows increased usage of multimedia applications and is helpful for users who prefer to store data on the internet. The Redmond-based company’s previous operating system, Vista, had failed to elicit much response. “The product will now be available to all enterprises across India,” Windows client director said.
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IT job mart buzzing again, software pros in demand

Headhunters looking out for 30,000 lateral entries in top firms
IT majors are back to hiring experienced hands after an eight-month hiatus beginning January. Counting for the early signals from headhunters in Bangalore, Hyderabad and Chennai, tech shops may be looking out for up to 30,000 lateral entries, if not more, before this calendar runs out. Recruitment agencies say they have started getting mandates for hiring in small batches.

At least two recruitment firms that FC spoke to confirmed that IT companies had mandated lateral hiring of between 20,000 and 30,000 employees in the past one month alone, though they were unwilling to hazard a guess on how the numbers might stack up by the end of 2009. They said there were still uncertainties about hiring intentions of their clients.

In the boom years of 2006, 2007 and 2008, the IT/ITeS industry created up to 400,000 new jobs every year of which about 150,000 were lateral entries. And while the global recession set in September 2008, hiring continued right through December. It was only in January-August this year that hiring trickled down to just a few hundred.

Headhunters confide that most large Indian and foreign firms, including the likes of IBM and Accenture, are back to hiring. Infosys and TCS have about more lateral hirings from the October-December quarter. So are some of the mid-sized body shops Sotware engineers with 4-8 years experience are mostly in demand.

Kris Lakshmikanth, CEO of The Head Hunters India said even tier-II IT companies were scouting for experienced personnel. “Depending on the size of the companies, the number of vacancies is generally between 50-100.”

Infosys board member T V Mohandas Pai told Financial Chronicle that his company had increased the forecast of additional headcount for financial year 2010 to 20,000 from 18,000 because it wanted to recruit more experienced people. This was needed to balance out the company’s staff pyramid, 70 per cent of which rests on freshers.

A HR industry tracker, who did not want to be named, said Infosys and TCS were also looking for business and vertical heads with over 12 years experience.

Sudhakar Balakrishnan, CEO of Adecco India, said, “There is some buoyancy now in the lateral hiring market for IT companies. Companies, though keeping the final numbers under wraps, are definitely looking to hire laterally. With revenues going up and the environment stabilising, they feel that a lot of requirements would be coming up.’’

While declining to give definite growth numbers, T Muralidharan, CMD of Hyderabad-based TMI Group said, the mandates received by his agency for filling up vacancies at top software firms in the past month was equal to what he had got in the preceding five months.

E Balaji, CEO of Chennai-based Ma Foi Management Consultants, said while the signs were good, firms were basically opening up positions that they had frozen earlier. “We have to wait and see how this scenario will pan out in the future,” he added. His opinion was shared by Gautam Sinha, CEO of TVA Allegis, a specialty IT/ITeS

hiring firm. He said, “The situation has improved but we are still 3-6 months away from lateral hiring going up to the pre-economic crisis numbers. The pipeline is good but big hirings will depend on the market condition in the US in coming months.”

He also explained that right now the companies were looking for professionals with 4-8 years experience. The big numbers would come when firms start looking out for professionals with 2-4 years experience, he said.

Yahoo triples profit, beats f'cast

Yahoo Inc beat Wall Street's profit and sales expectations as spending by advertisers showed signs of life in the third quarter and as months of cost-cutting and restructuring boosted the Internet company's bottom line.

Shares of Yahoo, the top US seller of online display ads but a distant No. 2 to Google Inc in search, jumped 5 percent after the results, which analysts said boded well for the fourth quarter, when ad spending should improve further.

Yahoo's revenue from display advertising was much better than expected, said RBC Capital Markets analyst Ross Sandler, citing the 2 percent sequential increase in US display ad sales.

"That basically says that large Fortune 500 advertisers who want high-quality, premium inventory are going back to Yahoo more in the third quarter than they were in the first or second," he said.

Yahoo's net profit more than tripled year-over-year, though a big chunk of the upside came from the sale of its stake in Chinese Web site Yahoo has undergone significant restructuring since Chief Executive Carol Bartz took over in January. It said in April it would lay off 5 percent of its workforce, or about 675 jobs, and it also pulled the plug on underperforming properties.

Yahoo also signed a 10-year Web search partnership with Microsoft Corp to challenge Google, a pact that US and European antitrust regulators are evaluating.

Chief Financial Officer Tim Morse said on a conference call that the company still believes the deal will close in early 2010, and that they can make significant progress on integration in one or two major markets next year.

Morse, who began as Yahoo CFO in July and handled Tuesday's earnings conference call on his own due to Bartz' having "come down with something" -- which he characterized as not serious -- said large advertisers began to spend again in the third quarter.

Mahindra Satyam may axe 5,000 benchers

The axe is haunting Mahindra Satyam staff, months after they were assured that there would not be any layoffs. On Monday afternoon, many Satyam's employees on the Virtual Pool Program (VPP) of the company were sent a formal notice of two months by e-mail.

The mail dated October 19, a copy of which is with The Times of India, reads, "In our earlier communication dated June 11, 2009, you were placed on VPP for a period of six months and accordingly, your Virtual Pool Leave is due to end on December 18, 2009. It is rather unfortunate that due to the continued economic constraints and business outlook, we do not anticipate that we will have the ability to recall many of our valued associates within the VPP period."

On June 11, the company announced the creation of the virtual pool, placing nearly 8,000 associates on the bench. "The surplus employees will be put in the VPP and paid basic salary, PF and medical insurance," Vineet Nayyar, CEO, Tech Mahindra, had said even as he ruled out any retrenchment.

However, with the six-month period of the VPP set to lapse in December, the company has served a two-month notice, as required by the employment contract, reportedly on over 5,000 employees. Sources told that the company did not have enough projects on hand and was not able to recall many associates.

A Mahindra Satyam spokesperson told that the company had absorbed about 1,500 associates from the virtual pool. The spokesperson also denied that the company was "laying off" people, even as the mail speaks of "separation of employment".

"We have given these employees an option of availing outplacement services. We will try to help them to the best of our abilities," he said.

Sun Micro to cut 3,000 jobs

Computer maker Sun Microsystems Inc is cutting 3,000 jobs worldwide, or about 10 percent of its staff, blaming delays in its $7 billion sale to Oracle Corp.

Oracle CEO Larry Ellison recently said that Sun is losing about $100 million a month because of uncertainty about the computer maker's future as European antitrust regulators pursue an in-depth probe of the transaction.

Rivals IBM and Hewlett-Packard Co are taking advantage of the uncertainty by poaching Sun's customers with steep discounts.

"Sun's business is really hurting," said Cross Research analyst Shannon Cross.

Analysts had widely expected thousands of Sun employees to lose their jobs, but not until No. 2 business software maker Oracle closes the deal.

Sun sold itself to Oracle after several years of failed attempts to devise a strategy to turn itself around. Last year it announced plans to 5,000 to 6,000 jobs and posted a net loss of $2.2 billion.

Sun said the job cuts would take place over the next 12 months, and it expects to take $75 million to $125 million in charges over the next several quarters. It said the job cuts would occur worldwide -- in its North America, EMEA, APAC and emerging markets regions.

Oracle spokeswoman Karen Tillman declined comment.

Satyam wins $8 mn worth new deals in Q2

Mahindra Satyam said on Wednesday it had won 30 million dirhams ($8 million) worth of new contracts in the Middle East and North Africa region in the July-September quarter.

Mahindra Satyam is planning to double its business in the region in the next 18 to 24 months, said a company statement.

Earlier the company had said that it is winning new outsourcing deals, but business is yet to see a total turnaround as some cautious clients wait for stability to return to the company.

“While there have not been any major client losses since April, some customers continue to keep Mahindra Satyam on their "watch list" to track its performance for about six months,” said Atul Kunwar, head of operations in Europe, Asia Pacific, the Middle East, Africa and India.

Mahindra Satyam was earlier known as Satyam Computer Services. Satyam was acquired by India's Tech Mahindra in an auction in April after the firm was hit by India's biggest corporate fraud that was revealed in January.

"Definitely, there is a sense of optimism that has started to come back but it isn't something that's windfall kind of a situation right now," Kunwar said.

Kunwar said Mahindra Satyam was seeing good business momentum in the geographies excluding the United States, with the company "actively participating" in some deals in Europe that could bring in revenues of about $50 million over four to five years.

"Europe is actually, from the point of view of looking at all these terrains, moving faster towards getting the momentum."

Non-US regions bring in about 50 per cent of Mahindra Satyam's revenue and the firm expects a sharp surge in India, Africa and the Middle East businesses in about two years, Kunwar said.

Wednesday, October 21, 2009


Scandal hits corporate role models IBM, McKinsey

It isn't often that big blue gets a black eye. But on Friday IBM, the leading U.S. technology firm known for its conservative management, found itself entangled in the largest ever hedge fund insider-trading scheme involving Galleon Group founder Raj Rajaratnam.

Robert Moffat, senior vice president and head of IBM's systems and technology group was named as a defendant. Executives at leading chipmaker Intel Corp and management consulting firm McKinsey & Co. were also implicated.

Bob Djurdjevic, an Annex Research analyst who has been covering IBM for over 30 years and is himself a former employee, said the news came as a shock.

"If there's any company that's always been a model of pristine behavior, being above it all, it was IBM," he said.

"I don't think it will have an effect on IBM's business because it has deep talent. However, it is a black eye to IBM's reputation."

The charges, stemming from wiretaps, included accusations that Moffat passed on to hedge fund New Castle Group insider information on Advanced Micro Devices Inc, obtained through IBM's business negotiations with the company.

He is also accused of passing on information on IBM itself ahead of the company's quarterly results, as well as those of Sun Microsystems while IBM was looking at its books for a possible acquisition. The FBI said Moffat was one of the IBM executives conducting due diligence on Sun.

Rajaratnam is also accused of conspiring with Rajiv Goel, director of strategic investment at Intel's investment arm, and Anil Kumar, a director of powerful management consulting firm McKinsey & Co.

Daniel Lazaroff, business law professor at Loyola Law School, said the case showed how widespread insider trading was, and that often the risk and penalty of getting caught was often not enough to deter them.

"The lesson for these companies is to try to internally monitor what is going on and make it clear that separate and apart from federal or state laws they are going to deal very harshly with these people from an employment standpoint," he said. "And they should have compliance systems in place."

Coincidentally, IBM sells software to aid companies' compliance policies and prevent insider fraud as part of its portfolio of technology services, software and servers.

The case adds to IBM's recent headaches. The U.S. Justice Department said last week that it was investigating allegations that IBM abused its dominance in the mainframe servers market to squeeze rivals.

The news also comes a day after IBM announced quarterly results that beat expectations but disappointed some investors who were not happy with some of the numbers, including a drop in service contract signings, an indication of future sales.

IBM declined to comment. McKinsey said it was "distressed" to learn that Kumar had been arrested, and was looking into the matter. Intel said it was not aware of the case until Friday and had not been contacted by authorities.

Mac, iPhone push Apple’s profit 47% higher

Apple, in its recent history, has overcome nearly every obstacle thrown its way. Now
it has dealt with another: the burden of high expectations.

Apple managed to surprise optimistic investors, posting a 47 per cent increase in profit in the fourth quarter and handily beating investors’ estimates. Renewed sales of Macintosh laptops and the continued popularity of the iPhone around the world helped to lift Apple’s bottom line.

‘‘It’s a pretty impressive quarter, given that consumers are still trying to figure out whether they want to spend again,’’ said Gene Munster, a securities analyst at Piper Jaffray.

Shares of Apple have already nearly doubled this year, and investors pushed up the stock throughout what appeared to be a profitable summer. Wall Street has been impressed by rebounding momentum in the Mac business and Apple’s leadership in the battle for smartphones — the versatile phones that make calls and run thousands of applications.

Moreover, the return of Steven P Jobs, the chief executive, to the public spotlight at an Apple event in September to introduce new iPods has calmed fears about management turbulence at the company.

Apple, based in Cupertino, California, posted particularly strong gains in the computer segment while many of its rivals were still struggling to recover from the recession’s effect on consumer spending. Apple said it sold 3.05 million Macs in the quarter, up about 17 per cent from the 2.6 million it sold in the same quarter last year. Global PC sales rose 2.3 per cent in the third quarter of the year, according to the market tracking firm IDC.

Mac sales were also helped by renewed back-to-school buying in the United States and the June introduction of Snow Leopard, the latest version of its Mac operating system. Macintosh sales have grown faster than the rest of the PC market in 19 of the past 20 quarters.

Apple continued to mine gold from the summer introduction of a new smartphone, the iPhone 3GS. Apple sold 7.4 million phones in the quarter, up from 6.9 million units sold in the same quarter a year earlier and ahead of Wall Street’s expectation of about seven million iPhones.

But there were indications that the company could have done even better. Timothy D Cook, Apple’s chief operating officer, indicated that demand for the 3GS had exceeded expectations and that it had taken the company until early October to get supply and demand balanced in some countries.

Apple executives added that they planned to introduce the iPhone on October 30 in China through a partnership with China Unicom, one of the country’s largest mobile carriers. ‘‘This is the largest market in the world in terms of total phones, and it’s very important we get started to make it as large as possible in smartphones,’’ Cook said.

Not even the iPod, which has been slowly fading as a stand-alone business, seriously hurt the quarter for Apple. The company sold 10.2 million iPods during the quarter, slightly behind the pace of 10.4 million that Wall Street had projected for the company.

But Apple took pains to point out that sales of the iPod Touch, which can run applications as the iPhone does, had doubled over the same period last year.

For the quarter that ended September 26, Apple said its net income had risen to $1.67 billion, or $1.82 a share. That was up from $1.14 billion, or $1.26 a share, in the quarter a year ago. Revenue rose to $9.87 billion, from $7.9 billion last year.

That easily beat the already optimistic expectations of analysts, who had projected that Apple would announce revenue of $9.2 billion and net income of $1.42 a share, according to a survey conducted by Thomson Reuters.

Looking ahead, Apple projected earnings for the December quarter of about $1.70 a share and gross margins that fell short of analysts’ predictions. Apple said that new products would have lower margins than their predecessors. Analysts are expecting earnings closer to $1.91 a share, saying that Apple is notoriously conservative in estimating profits.

Asked about iPhone competitors like Motorola, Research In Motion and Palm, Apple executives took the opportunity to brag.

‘‘We feel very good suiting up and competing against anyone,’’ Cook said. ‘‘People are really just trying to catch up with the first iPhone that was announced two years ago, and we have long since moved beyond that.’’

Indian cos hiring activity picks up 4.1 % in Sept

India Inc's hiring activity picked up 4.1 per cent in September with IT, BPO and real estate sectors turning bullish after a long time, a report by job portal naurkri.Com has said.

The naukri.Com's monthly 'JobSpeak index' increased to 729 in September from 701 in August this year.

"The secular trend is positive across sectors. Had it not been for an early festival season we may have seen further improvement in the index.

"The good news is that the IT and BPO sectors which are big employers especially at entry and junior levels seem to be in positive territory after a long time," Info Edge (owner of naukri.Com) COO and Director Hitesh Oberoi said.

Moreover, on the three-month moving average, the index inched up to 719 in September from 715 in August.

Last month, companies' hiring activity saw a positive trend with 14 out of 41 sectors covered showing a double digit rise in hiring activities.

The IT-enabled services (ITeS) and BPO, real estate and retail sectors saw a significant push in September as compared to August, the report stated.

The ITeS/BPO sector, saw an increase of 18.3 per cent in hiring activity in September, while real estate and retail saw a rise of 36.8 per cent and 12.2 per cent, respectively.

Tuesday, October 20, 2009

Google employees get surprise bonus

Employees of Google, the world’s most popular search engine, got more than just sweets and wishes this Diwali. Google announced a surprise bonus for its employees worldwide, which comes in the backdrop of its better than expected results for the third quarter, announced last week.

A mail to this effect was sent to employees of Google on Monday and a company official confirmed the development. "The bonus we rewarded our employees is a part of the annual bonus that nearly 20,000 employees worldwide were given. Job-holders across all levels were handed out a bonus," said Manoj Varghese, head-human resources, APAC region, Google.

Further details on why employees were rewarded or what the quantum was across various levels were not available. The bonus that Googlers get is like the company’s famous canteen in Googleplex - a much-discussed topic among Google followers.

Google has over thousand employees in India, its second largest employee base after US. An employees said Google’s India employees, spread across its centres in Gurgaon, Bangalore and Hyderabad and different levels received the mail about the bonus payment.

"We were told that we are getting a surprise bonus of Rs 18,000 and it’s to thank employees for their contribution to the company. Also, that its like a gift for working hard during the recession and showing spectacular results," said an employee of the company, who did not wish to be named.

The mail comes a few days after Google announced results for the third quarter, where it beat street expectations. For the quarter ended September 2009, Google’s revenue was up 7% at $5.94 billion and its net profit rose 27% to $1.64 billion.

During the earnings call last week, Google CEO Eric Schmidt had said, "While there’s obviously a lot of uncertainty about the pace of the economic recovery, we feel the worst of the recession is behind us and now we feel confident about investing heavily in our future."

And the unexpected bonuses worldwide only points to Google’s confidence about the business environment. Its better sales numbers is a key indicator of advertising spend as an increase in ad spend could in turn give signals about how the economy is shaping up.

It could also work as a motivation tool for employees, as Google faces increasing competition in the search space and has also forayed into the product space with its Google phone.

"Google is entering a phase where it’s going to face increasing competition from its main rivals- Microsoft and Apple. This surprise bonus could be a way of motivating employees to prepare themselves for the competition which is going to be stiffer going ahead," said Gartner India’s principal research analyst Diptarup Chakraborti.

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