Wipro, India's No. 3 software services exporter, sees robust deal pipeline on the back of improving IT demand worldwide, a senior official said on Tuesday.
"The deal pipeline is good ... the demand environment is building up. The IT demand situation is improving," Suresh Vaswani, joint chief executive of the company's IT business, told reporters on the sidelines of the World Economic Forum.
The company last month reported a 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.
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.
Wednesday, November 11, 2009
Satyam
Mahindra Satyam to reposition itself
Moving away from the shadow of Satyam scam, software exporter Mahindra Satyam today said the company would be repositioned as a complete Information and Communications Technology (ICT) firm from just an IT outsourcing player.
Tech Mahindra bought Satyam in April and encouraged by the addition of 35 new clients is focusing on expanding service horizons by investing in building new technologies.
"We plan to position Mahindra Satyam as an ICT firm. The focus is on converting an IT company to ICT company," Mahindra Satyam Chief Executive Officer CP Gurnani told PTI.
The company is focusing on new areas like digital convergence, as it continues to strengthen its five verticals -- manufacturing, financial, health care, retail and consumer product, he said.
"We are looking at overall growth in digital convergence. That is a focus area. We will also be focusing on mobile applications," Gurnani said, adding "I am taking advantage of our presence in connected solutions, in enterprise solution, in mobility and coming up with new paradigm shift."
On new business additions, he said the company is seeing an uptake in demand and has added 35 new clients from May this year.
"The worst is behind us and we are back on the path to recovery... Mahindra satyam is getting traction in the market and getting new clients. We have added 35 new clients since May this year... We are seeing good demand from clients. The overall IT market is also improving."
Gurnani said only a few former Satyam clients, who walked away from the company after it was hit by the scam early this year have returned, although new clients are coming on board.
He said the company was in talks with one of its old clients, the World Bank, to lift the ban imposed on awarding contracts to Satyam after the scam as the company has now been bought by Tech Mahindra and has a new management.
"We are in active dialogue with the World Bank for revoking the eight-year ban imposed by it," Gurnani said.
Till January Satyam had about 500 clients, but the number dwindled to 380 by the time Tech Mahindra won the bid to take it over.
Tech Mahindra bought Satyam in April and encouraged by the addition of 35 new clients is focusing on expanding service horizons by investing in building new technologies.
"We plan to position Mahindra Satyam as an ICT firm. The focus is on converting an IT company to ICT company," Mahindra Satyam Chief Executive Officer CP Gurnani told PTI.
The company is focusing on new areas like digital convergence, as it continues to strengthen its five verticals -- manufacturing, financial, health care, retail and consumer product, he said.
"We are looking at overall growth in digital convergence. That is a focus area. We will also be focusing on mobile applications," Gurnani said, adding "I am taking advantage of our presence in connected solutions, in enterprise solution, in mobility and coming up with new paradigm shift."
On new business additions, he said the company is seeing an uptake in demand and has added 35 new clients from May this year.
"The worst is behind us and we are back on the path to recovery... Mahindra satyam is getting traction in the market and getting new clients. We have added 35 new clients since May this year... We are seeing good demand from clients. The overall IT market is also improving."
Gurnani said only a few former Satyam clients, who walked away from the company after it was hit by the scam early this year have returned, although new clients are coming on board.
He said the company was in talks with one of its old clients, the World Bank, to lift the ban imposed on awarding contracts to Satyam after the scam as the company has now been bought by Tech Mahindra and has a new management.
"We are in active dialogue with the World Bank for revoking the eight-year ban imposed by it," Gurnani said.
Till January Satyam had about 500 clients, but the number dwindled to 380 by the time Tech Mahindra won the bid to take it over.
IT market, new openings
Yahoo to expand India headcount
Yahoo Inc wants to triple its operating margin to 15-20 percent over the next three years by increasing revenue and keeping costs under control, CEO Carol Bartz said.
She also said that Yahoo, the top US seller of online display ads, planned to expand its business in India and hire more people there as it targets emerging markets with low Internet penetration and high growth potential.
"Six percent operating margin is terrible, terrible... We have a commitment that it will be 15-20 per cent in the next three years," she said at a lunch talk organised by the American Chamber of Commerce in Singapore.
Bartz, who joined Yahoo as CEO in January this year, has been trying to revitalise the Internet giant by shedding staff, dropping unprofitable products and getting the firm to respond faster to changes in the way people use the web.
"We go where the population is, we go where the economies are growing," she said, highlighting India, Indonesia and Vietnam as countries where Yahoo hoped to grow its presence.
She would be heading from Singapore to India, she said, where she is scheduled to meet Indian Prime Minister Manmohan Singh and other senior officials. Yahoo plans to hire more people and find new partners in the world's second-most populous nation for its various Internet initiatives.
Turning to China, Bartz said Yahoo was "very happy" with its 40 per cent investment in China's Alibaba Group although it recently sold shares in Alibaba.com, the Chinese firm's listed unit.
Yahoo does not have a direct presence in China as it has an agreement to let Alibaba use the Yahoo brand name in the country.
Microsoft and Yahoo earlier this year signed a 10-year global web search partnership to challenge market leader Google Inc, a pact that US and European antitrust regulators are evaluating.
Bartz said the two partners will formally seek regulatory approval for their tie-up in the first quarter of next year as scheduled.
She also said that Yahoo, the top US seller of online display ads, planned to expand its business in India and hire more people there as it targets emerging markets with low Internet penetration and high growth potential.
"Six percent operating margin is terrible, terrible... We have a commitment that it will be 15-20 per cent in the next three years," she said at a lunch talk organised by the American Chamber of Commerce in Singapore.
Bartz, who joined Yahoo as CEO in January this year, has been trying to revitalise the Internet giant by shedding staff, dropping unprofitable products and getting the firm to respond faster to changes in the way people use the web.
"We go where the population is, we go where the economies are growing," she said, highlighting India, Indonesia and Vietnam as countries where Yahoo hoped to grow its presence.
She would be heading from Singapore to India, she said, where she is scheduled to meet Indian Prime Minister Manmohan Singh and other senior officials. Yahoo plans to hire more people and find new partners in the world's second-most populous nation for its various Internet initiatives.
Turning to China, Bartz said Yahoo was "very happy" with its 40 per cent investment in China's Alibaba Group although it recently sold shares in Alibaba.com, the Chinese firm's listed unit.
Yahoo does not have a direct presence in China as it has an agreement to let Alibaba use the Yahoo brand name in the country.
Microsoft and Yahoo earlier this year signed a 10-year global web search partnership to challenge market leader Google Inc, a pact that US and European antitrust regulators are evaluating.
Bartz said the two partners will formally seek regulatory approval for their tie-up in the first quarter of next year as scheduled.
Tuesday, November 10, 2009
IT market, New Deals, Outsourcing
Capgemini, Logica, AT&T, BT now eye local IT services
The domestic information technology (IT) services market is no more a lowprofit option and entry of global players in this segment is a testimony to its growing maturity and lucrativeness.
Earlier, the domestic IT services market was characterised as ‘where you would pay for the hardware but get the services for free’. This has changed over the last few years with the profit margins in some segments comparable to the developed markets.
Says Seepij Gupta, analyst, software and services research, IDC India: “In some segments of the domestic IT services markets — application management and managed services, for example — the profit margins range between 25-30 % and 16-32 %, respectively. This kind of profitability makes the India market almost at par with the developed economies.”
Rising profits also reveal the growing maturity of the local market where corporates and governments are willing to spend a larger amount on technology. Sudip Saha, analyst, services research, Springboard Research, says the maturity curve is getting sharper in the domestic market reflected in the larger size of IT outsourcing deals as well as longer-term contracts. “Corporates are realising that having internal IT departments is expensive and it better to outsource,” he added.
European IT services majors like Capgemini, Logica, Groupe Steria and Atos Origin have already planned their local market moves. Segment-specific players like AT&T and BT too have made their foray into the telecom technology services market in India.
Anand Sankaran, chief executive, Wipro Infotech, said domestic IT services market is reasonably attractive and has steadily seen more vendors getting in: while the market was dominated by the likes of IBM, TCS, Wipro, Hewlett-Packard and HCL Infosystems, it is now seeing aggressive pitches by Infosys Technologies and Accenture.
Springboard Research says the domestic IT services market size was $5.7 billion in 2008 and is expected to touch $6.6 billion this calendar. According to Mr Saha, there are sectors in India like utilities and infrastructure which are actively looking at outsourcing their IT requirements and in the process expanding the market.
The domestic IT services market has already set certain global benchmarks which are either being very closely studied or even getting emulated. A classic example of this is the Bharti-IBM IT outsourcing deal, which set a benchmark for the global telecom industry.
Earlier, the domestic IT services market was characterised as ‘where you would pay for the hardware but get the services for free’. This has changed over the last few years with the profit margins in some segments comparable to the developed markets.
Says Seepij Gupta, analyst, software and services research, IDC India: “In some segments of the domestic IT services markets — application management and managed services, for example — the profit margins range between 25-30 % and 16-32 %, respectively. This kind of profitability makes the India market almost at par with the developed economies.”
Rising profits also reveal the growing maturity of the local market where corporates and governments are willing to spend a larger amount on technology. Sudip Saha, analyst, services research, Springboard Research, says the maturity curve is getting sharper in the domestic market reflected in the larger size of IT outsourcing deals as well as longer-term contracts. “Corporates are realising that having internal IT departments is expensive and it better to outsource,” he added.
European IT services majors like Capgemini, Logica, Groupe Steria and Atos Origin have already planned their local market moves. Segment-specific players like AT&T and BT too have made their foray into the telecom technology services market in India.
Anand Sankaran, chief executive, Wipro Infotech, said domestic IT services market is reasonably attractive and has steadily seen more vendors getting in: while the market was dominated by the likes of IBM, TCS, Wipro, Hewlett-Packard and HCL Infosystems, it is now seeing aggressive pitches by Infosys Technologies and Accenture.
Springboard Research says the domestic IT services market size was $5.7 billion in 2008 and is expected to touch $6.6 billion this calendar. According to Mr Saha, there are sectors in India like utilities and infrastructure which are actively looking at outsourcing their IT requirements and in the process expanding the market.
The domestic IT services market has already set certain global benchmarks which are either being very closely studied or even getting emulated. A classic example of this is the Bharti-IBM IT outsourcing deal, which set a benchmark for the global telecom industry.
IT market, Recession
75% Indian engineering students unemployable: Report
Discussing a report by software industry group Nasscom which says that 75 percent engineering students in India are unemployable, education experts here on Saturday said that the Indian higher education system must give skill building and practical training equal importance as academics to give them an edge.
A.D. Sahasrabudhu, director of the College of Engineering, Pune said that one of the major reasons why engineers, even from reputed institutes, are not easily employed because they lack hands-on skill.
"The focus in most institutes here is always on academics and theory. Thus a mechanical engineer may actually not know how to change a part of a machine. Therefore even if a high scoring student gets placed in a good company, eventually that lack of practical knowledge catches up," Sahasrabudhu said during a panel discussion at the sixth Higher Education Summit organised by Federation of of Indian Chambers of Commerce and Industry (FICCI).
"From our experience we now know that practical, hands-on training is very crucial in the education system," he added.
In their latest report released in the last week of October, National Association of Software and Services Companies (Nasscom) said that Indian IT firms reject 90 percent of college graduates and 75 percent of engineers who apply for jobs because they are not good enough to be trained.
And because there is such a dearth of competent people, companies like Infosys increased its training of employees to 29 weeks from this year. That's seven months of training, the report added.
Richard Kerly, a Scottish university professor, who had participated in the discussion said: "Just recently I came to know that Citi Bank had started its recruiting process here, but was not going to campuses placement cells.
"The possible reason is that students here, although brilliant, don't have an edge when it comes to putting theories to practice."
Sudhir Matthew, Dean, Ecole Hoteliere Lavasa, Lavasa Corporation Limited, Pune said: "The scene is very similar in the hospitality industry. Lack of hands-on trained students have forced hotel chains like the Oberoi, Taj and ITC to open their own hotel schools where the students are trained as per their needs.
"Tourism will grow at a rate of 8.8 percent till 2015 in India, making it one of the fastest growing markets but there is a serious lack of skilled hands. Academics combined with practical training is therefore very important to meet this shortage which is estimated at 3.2 million."
A.D. Sahasrabudhu, director of the College of Engineering, Pune said that one of the major reasons why engineers, even from reputed institutes, are not easily employed because they lack hands-on skill.
"The focus in most institutes here is always on academics and theory. Thus a mechanical engineer may actually not know how to change a part of a machine. Therefore even if a high scoring student gets placed in a good company, eventually that lack of practical knowledge catches up," Sahasrabudhu said during a panel discussion at the sixth Higher Education Summit organised by Federation of of Indian Chambers of Commerce and Industry (FICCI).
"From our experience we now know that practical, hands-on training is very crucial in the education system," he added.
In their latest report released in the last week of October, National Association of Software and Services Companies (Nasscom) said that Indian IT firms reject 90 percent of college graduates and 75 percent of engineers who apply for jobs because they are not good enough to be trained.
And because there is such a dearth of competent people, companies like Infosys increased its training of employees to 29 weeks from this year. That's seven months of training, the report added.
Richard Kerly, a Scottish university professor, who had participated in the discussion said: "Just recently I came to know that Citi Bank had started its recruiting process here, but was not going to campuses placement cells.
"The possible reason is that students here, although brilliant, don't have an edge when it comes to putting theories to practice."
Sudhir Matthew, Dean, Ecole Hoteliere Lavasa, Lavasa Corporation Limited, Pune said: "The scene is very similar in the hospitality industry. Lack of hands-on trained students have forced hotel chains like the Oberoi, Taj and ITC to open their own hotel schools where the students are trained as per their needs.
"Tourism will grow at a rate of 8.8 percent till 2015 in India, making it one of the fastest growing markets but there is a serious lack of skilled hands. Academics combined with practical training is therefore very important to meet this shortage which is estimated at 3.2 million."
IT market, new openings
StanChart to hire 3,000 employees by next year
Global banking behemoth Standard Chartered plans to hire 3,000 employees in India by the end of 2010, a year that would also see the British firm listing its shares on the bourses here.
The bank intends to add close to 2,500 employees to its payroll in India during 2010, while it is hiring a staff of 500 in the last two months of 2009, StanChart's Regional Head for Human Resources Madhavi Lall told PTI here.
StanChart, which currently employs close to 18,000 people in the country, has already hired 2,000 employees so far this year, she added.
The bank is currently working on the modalities for listing its Indian Depository Receipts (IDRs) here -- which would make it the first foreign entity to exercise the IDR route to raise capital in India.
The bank intends to add close to 2,500 employees to its payroll in India during 2010, while it is hiring a staff of 500 in the last two months of 2009, StanChart's Regional Head for Human Resources Madhavi Lall told PTI here.
StanChart, which currently employs close to 18,000 people in the country, has already hired 2,000 employees so far this year, she added.
The bank is currently working on the modalities for listing its Indian Depository Receipts (IDRs) here -- which would make it the first foreign entity to exercise the IDR route to raise capital in India.
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