US-based Intelligroup Inc, a provider of strategic IT consulting, application management, support and implementation services with its global delivery centres in Hyderabad and Bangalore, is pursuing acquisitions in the US and India, which have the right set of competencies in the business intelligence (BI), infrastructure management and testing space.
“We are in talks with a couple of companies in the US and India – the markets where is are strong in – which would complement our enterprise resource planning (ERP) offerings. As on March 31, 2009, we have cash and cash equivalents to the tune of $18 million (approximately Rs 88.2 crore), which we intend to utilise to fund the buyouts,” Intelligroup’s president and chief executive officer, Vikram Gulati, told Business Standard, while declining to draw any time line for closing the deals.
Intelligroup had, in 2007, acquired IGS Novasoft, a UK-based company, which had a good SAP implementation methodology, for $3 million (Rs 14.7 crore).
Stating that the company would stay focused on life sciences, consumer products, discrete manufacturing, process manufacturing and insurance verticals, Gulati said they were also looking at tapping the renewable energy space. “The US government’s plans to earmark a $15-billion spend every year for renewables hold maximum promise for us. We are still awaiting that money to start trickling down,” he added.
Intelligroup currently has six US clients in the renewable energy space – including Ausra, which develops and deploys utility-scale solar technologies to serve global electricity, SumPower that manufactures high-efficiency solar power solutions for residential, commercial and power plant applications, and solar technology company Miasole – together contributing about 5 per cent to its overall revenues
The US market, Gulati said, at present contributes 75 per cent, while Europe and India account for 10 per cent and 5 per cent respectively and the rest flowing in from other geographies like Japan. “We clearly want to derisk the US. Europe will grow faster this year,” he added.
Intelligroup, which follows a January-to-December financial year, reported a 19.7 per cent decrease in its revenues to $30.9 million (around Rs 151.41crore) for the first quarter of 2009, as compared to $38.5 million (Rs 188.65 crore) in Q1 of 2008. “Though it is clear that the full year 2009 will be a challenging period with revenue levels below those in 2008, we are on track to improve our operational efficiency and reduce costs to best manage our margins,” Gulati said.
Tuesday, July 28, 2009
IT market, Outsourcing, Recession
Active client base of IT firms shrinks
Top Indian IT firms saw their active client base erode in the April-June period, on the back of project rampdowns and vendor consolidations.
In the case of Infosys, the number of active clients came down to 569, down sequentially by 10. Wipro’s active client base fell to 830 from 863 and that of TCS was down by 52 to 933. According to Infosys COO, S D Shibulal, the company added 27 new clients in the first quarter, even though the total client base came down. “Some clients will not figure in the list, if the business carried out with them is below a certain threshold limit,” he said.
During the quarter, project rampdowns saw contribution by Infosys’ top client by revenue, BT, come down below the $300 million mark. Top five clients accounted for 16.3 per cent of total revenues, dipping sequentially from 17.2 per cent. “In some quarters, revenue contribution from top 10 will be higher than in other quarters. This is not a secular trend, but is more situational. We are very focused on getting new clients and will continue this focus. There might be some additional work we have to do since the business environment is challenging,” said Shibulal.
For Wipro, the top five customers accounted for 11.4 per cent, up from 10.8 per cent in previous quarter. The number of new customers went up from 20 to 26, but down 31 from the first quarter of the previous financial year.
Wipro CFO Suresh Senapaty said that the company had not lost any customers, but some of them had fallen below the threshold of $150,000 per quarter in revenue run-rate and hence were not counted. Joint CEO Suresh Vaswani said that because of the focus being given to customers, many of them are becoming high value clients and are moving up into higher bands or giving larger revenue.
Jens Butler from analyst firm Ovum in his bulletin said this about TCS: “Maybe of bigger concern is the fact that only 26 new clients (and only 0.7 per cent of new revenue contributions, down from 6.9 per cent) have been added during the quarter (with contributions of less than $5 million), alongside a fall in its active client count to 933 from 985. This may be due to a focus on client retention in turbulent times, or possibly underinvestment in sales resources, or TCS’ unwillingness to enter into pricing wars. The likelihood is a combination of all three.”
Rajeev Mehta, IT analyst at India Infoline, said that too much should not be read into top IT firms losing out on active clients. “The recessionary pressures are still on, and this kind of thing could happen. Also, revenues from some top clients drop during a quarter and lose their ‘active client’ tag,” he said. “This will pass.”
Source: FinancialChronicle
In the case of Infosys, the number of active clients came down to 569, down sequentially by 10. Wipro’s active client base fell to 830 from 863 and that of TCS was down by 52 to 933. According to Infosys COO, S D Shibulal, the company added 27 new clients in the first quarter, even though the total client base came down. “Some clients will not figure in the list, if the business carried out with them is below a certain threshold limit,” he said.
During the quarter, project rampdowns saw contribution by Infosys’ top client by revenue, BT, come down below the $300 million mark. Top five clients accounted for 16.3 per cent of total revenues, dipping sequentially from 17.2 per cent. “In some quarters, revenue contribution from top 10 will be higher than in other quarters. This is not a secular trend, but is more situational. We are very focused on getting new clients and will continue this focus. There might be some additional work we have to do since the business environment is challenging,” said Shibulal.
For Wipro, the top five customers accounted for 11.4 per cent, up from 10.8 per cent in previous quarter. The number of new customers went up from 20 to 26, but down 31 from the first quarter of the previous financial year.
Wipro CFO Suresh Senapaty said that the company had not lost any customers, but some of them had fallen below the threshold of $150,000 per quarter in revenue run-rate and hence were not counted. Joint CEO Suresh Vaswani said that because of the focus being given to customers, many of them are becoming high value clients and are moving up into higher bands or giving larger revenue.
Jens Butler from analyst firm Ovum in his bulletin said this about TCS: “Maybe of bigger concern is the fact that only 26 new clients (and only 0.7 per cent of new revenue contributions, down from 6.9 per cent) have been added during the quarter (with contributions of less than $5 million), alongside a fall in its active client count to 933 from 985. This may be due to a focus on client retention in turbulent times, or possibly underinvestment in sales resources, or TCS’ unwillingness to enter into pricing wars. The likelihood is a combination of all three.”
Rajeev Mehta, IT analyst at India Infoline, said that too much should not be read into top IT firms losing out on active clients. “The recessionary pressures are still on, and this kind of thing could happen. Also, revenues from some top clients drop during a quarter and lose their ‘active client’ tag,” he said. “This will pass.”
Source: FinancialChronicle
IT market
IT firms speed up patent filing
Stepping up efforts to commercialise their intellectual property (IP), Indian IT services firms have accelerated their patent filing process. The top three firms — TCS, Infosys and Wipro — filed together over 150 patent applications in fiscal 2009.
Such a move is an important part of their non-linear growth strategy, where the companies are trying to de-link their revenue growth from the number of people added. This is expected to improve their profitability in a changing business environment.
Patent figures
While Infosys led rivals TCS and Wipro in terms of filing the highest number of patents in fiscal 2009, TCS was granted the most during the year. TCS filed for 58 patents in fiscal 2009 and was granted five — three in India and two in the US. Infosys filed for some 80 patent applications in the US and India and was granted two by the US Patents and Trademark Office. Wipro filed for 13 patents and granted one during the year.
“We have defined an IP strategy with a view to building an effective portfolio and plan to monetise going forward,” said Mr Ananth Krishnan, Chief Technology Officer, TCS. Despite setting up its first software R&D centre way back in 1981, TCS filed for its first set of IPs only in the early part of this decade.
However, with an IP strategy in place, TCS has stepped up its efforts. “We filed for more than 30 patents in the June quarter and currently have some 200 patent applications pending in various jurisdictions,” Mr Krishnan said. TCS managed to save $26 million (Rs 125 crore) through its R&D efforts in fiscal 2009.
Infosys has an aggregate of 200 patent applications pending in India and the US. “As part of our new engagement model, the focus has changed to commercialising the IP from merely developing it,” Infosys COO, Mr S. D. Shibulal, told Business Line recently.
The changed economic conditions, where customers have slashed their technology spending drastically, have forced even the smaller IT services firms such as KPIT Cummins to look at patenting their IPs.
“For the first time, we filed for eight patent applications in fiscal 2009,” said Mr Girish Wardadkar, President and ED, KPIT Cummins Infosystems Ltd. The company is looking to commercialise its IPs and leverage its knowledge assets, Mr Wardadkar said.
Such a move is an important part of their non-linear growth strategy, where the companies are trying to de-link their revenue growth from the number of people added. This is expected to improve their profitability in a changing business environment.
Patent figures
While Infosys led rivals TCS and Wipro in terms of filing the highest number of patents in fiscal 2009, TCS was granted the most during the year. TCS filed for 58 patents in fiscal 2009 and was granted five — three in India and two in the US. Infosys filed for some 80 patent applications in the US and India and was granted two by the US Patents and Trademark Office. Wipro filed for 13 patents and granted one during the year.
“We have defined an IP strategy with a view to building an effective portfolio and plan to monetise going forward,” said Mr Ananth Krishnan, Chief Technology Officer, TCS. Despite setting up its first software R&D centre way back in 1981, TCS filed for its first set of IPs only in the early part of this decade.
However, with an IP strategy in place, TCS has stepped up its efforts. “We filed for more than 30 patents in the June quarter and currently have some 200 patent applications pending in various jurisdictions,” Mr Krishnan said. TCS managed to save $26 million (Rs 125 crore) through its R&D efforts in fiscal 2009.
Infosys has an aggregate of 200 patent applications pending in India and the US. “As part of our new engagement model, the focus has changed to commercialising the IP from merely developing it,” Infosys COO, Mr S. D. Shibulal, told Business Line recently.
The changed economic conditions, where customers have slashed their technology spending drastically, have forced even the smaller IT services firms such as KPIT Cummins to look at patenting their IPs.
“For the first time, we filed for eight patent applications in fiscal 2009,” said Mr Girish Wardadkar, President and ED, KPIT Cummins Infosystems Ltd. The company is looking to commercialise its IPs and leverage its knowledge assets, Mr Wardadkar said.
HCL, New Deals
HCL Infosytems takes up project to disperse NREGA wages in UP
HCL Infosystems on Monday said it has undertaken a project with the Uttar Pradesh government to facilitate disbursement of wages to workers under National Rural Employment Guarantee Act (NREGA) project.
As per the project, HCL Infosystems would implement technology for issuing e-job cards to workers in Sitapur district of UP.
"We are sure that using technology will further facilitate on-ground implementation of NREGA and the benefits of this initiative will reach the right individuals and thereby multiply its impact on the society," HCL Infosystems Executive vice-president George Paul said in a release.
As part of the phase one of the project, 1,000 e-job cards would be issued, it said.
As per the project, HCL Infosystems would implement technology for issuing e-job cards to workers in Sitapur district of UP.
"We are sure that using technology will further facilitate on-ground implementation of NREGA and the benefits of this initiative will reach the right individuals and thereby multiply its impact on the society," HCL Infosystems Executive vice-president George Paul said in a release.
As part of the phase one of the project, 1,000 e-job cards would be issued, it said.
Monday, July 27, 2009
Infosys, IT market, Outsourcing, TCS, Wipro
TCS, Infy, Wipro among top 10 global service providers
Even in a recession-hit market where clients are cutting outsourcing budgets, Indian firms such as TCS, Infy, Wipro, HCL and Tata Communications have won large outsourcing deals this year placing them among the top 10 global service providers, on contract value terms.
Even though the total contract value of awarded outsourcing deals fell by 22% to $40.2 billion in the first six months of this year, Indian tech firms continued to compete neck and neck with the global biggies such as IBM, Accenture, HP/EDS, CSC, shows data from TPI. TPI is the largest sourcing data and advisory firm and measures commercial outsourcing contracts valued at $25 million or more.
Indian firms dominated the information technology outsourcing (ITO) segment ($33.2 billion) split into application, development & maintenance (ADM) and infrastructure segments.
Among the desi firms, the top deal winners were Cognizant, Infosys, HCL, TCS and Wipro featuring in the ADM section. HCL and Wipro were again listed among the top 10 infrastructure deal winners, TPI said.
“Retail, diversified financials, transport, and network telecom services provided strength to the ITO market. TCS was the top vendor to win deals in three of these markets, while Infosys appeared as one of the top vendors in the Americas and the APAC region,” HSBC IT analyst Yogesh Aggarwal said.
Tata Com, only Indian firm among network service bigwigs such as AT&T, BT, Ericsson and Nokia Siemens, grabbed a place amongst top 10 club in a segment where deals worth $13.4 billion were awarded till June.
While the broader BPO market remained weak, experts believe Indian vendors relied on client mining, rather than winning new mega-accounts. Infy, that employs 16,700 people in its BPO division, was among the top 10 BPO service providers in the H1 of 2009, wherein globally contracts worth $7 billion were awarded to the likes of Capita, Perot Systems, Xerox, RR Donnelley and Johnson Controls.
Even though the total contract value of awarded outsourcing deals fell by 22% to $40.2 billion in the first six months of this year, Indian tech firms continued to compete neck and neck with the global biggies such as IBM, Accenture, HP/EDS, CSC, shows data from TPI. TPI is the largest sourcing data and advisory firm and measures commercial outsourcing contracts valued at $25 million or more.
Indian firms dominated the information technology outsourcing (ITO) segment ($33.2 billion) split into application, development & maintenance (ADM) and infrastructure segments.
Among the desi firms, the top deal winners were Cognizant, Infosys, HCL, TCS and Wipro featuring in the ADM section. HCL and Wipro were again listed among the top 10 infrastructure deal winners, TPI said.
“Retail, diversified financials, transport, and network telecom services provided strength to the ITO market. TCS was the top vendor to win deals in three of these markets, while Infosys appeared as one of the top vendors in the Americas and the APAC region,” HSBC IT analyst Yogesh Aggarwal said.
Tata Com, only Indian firm among network service bigwigs such as AT&T, BT, Ericsson and Nokia Siemens, grabbed a place amongst top 10 club in a segment where deals worth $13.4 billion were awarded till June.
While the broader BPO market remained weak, experts believe Indian vendors relied on client mining, rather than winning new mega-accounts. Infy, that employs 16,700 people in its BPO division, was among the top 10 BPO service providers in the H1 of 2009, wherein globally contracts worth $7 billion were awarded to the likes of Capita, Perot Systems, Xerox, RR Donnelley and Johnson Controls.
Cost cutting, Layoffs in USA
AOL Tells Employees Job Cuts Possible After Review
AOL’s new Chief Executive Officer Tim Armstrong told employees today that job cuts are possible as he undertakes a 60-day review of the Internet company’s cost structure, a company spokeswoman said.
Armstrong said at a companywide meeting that he’s working on financial plans, and part of that process could include staff reductions, Tricia Primrose, a spokeswoman for AOL, said in an e-mail. She didn’t specify how many jobs may be eliminated.
After completing a 100-day review of AOL’s strategy, Armstrong said in an interview last week that he plans to overhaul advertising and develop more local Web sites to revive falling sales. Time Warner Inc. plans to spin off AOL, which employs about 7,000 people, into a separate, publicly traded company later this year.
Time Warner, based in New York, fell 30 cents to $27.58 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 24 percent this year. The possible cuts were reported earlier by Silicon Alley Insider.
Armstrong said at a companywide meeting that he’s working on financial plans, and part of that process could include staff reductions, Tricia Primrose, a spokeswoman for AOL, said in an e-mail. She didn’t specify how many jobs may be eliminated.
After completing a 100-day review of AOL’s strategy, Armstrong said in an interview last week that he plans to overhaul advertising and develop more local Web sites to revive falling sales. Time Warner Inc. plans to spin off AOL, which employs about 7,000 people, into a separate, publicly traded company later this year.
Time Warner, based in New York, fell 30 cents to $27.58 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 24 percent this year. The possible cuts were reported earlier by Silicon Alley Insider.
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