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.
Thursday, October 29, 2009
Outsourcing
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".
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".
IT market, Wipro
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.
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.
IT market
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.
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.
BPO, Infosys
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".
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, IT market
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.
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
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.
"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
IT market, Wipro
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.
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.
IT market, TCS
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.
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 market
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.
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
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.
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.
Layoffs in India
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.
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.
IT market
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.
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.
BPO, new openings
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.
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.
new openings
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.
"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.
Cost cutting, Layoffs in India, Satyam
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.
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.
Infosys
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.
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.
New Deals, TCS
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.
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.
New Deals, Outsourcing, Wipro
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."
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
Outsourcing
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.
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.
IT market, New Deals, Satyam
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.
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.
IT market
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.
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.
IT market
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.
“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.
IT market
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.
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.
Infosys
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.
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.
IT market
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.
IT market, new openings, Recession
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.
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.
IT market
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 alibaba.com. 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.
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 alibaba.com. 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.
Layoffs in India, Satyam
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.
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.
Layoffs in USA
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.
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.
New Deals, Satyam
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.
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
IBM, IT market
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.
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.
IT market
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.’’
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.’’
IT market, new openings
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.
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
IT market
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.
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.
Monday, October 19, 2009
IT market
Staff confidence in Indian firms up in Q3
Indian employees maintained high level of confidence in the future of their companies in the third quarter of this year compared with their global peers, a study says.
As per the study by global human resource solutions provider Kenexa, except India, China and Brazil, employees from nine other countries reported a decline in employee confidence in the third quarter compared with the previous quarter.
“Globally there was about one point decline in the third quarter 2009 (in the employee confidence index), compared to five point improvement in the second quarter. China and India sustained and built very slightly on the improvements seen in the second quarter of 2009, while Japan reversed a second quarter downward trend,” Kenexa Research Institute research consultant Anne Herman said.
Employee confidence, a quarterly measure of the degree of confidence employees have in their employers’ marketplace competitiveness and their own careers, dropped to 97.9 at the end of September from 98.9 in June this year.
The country-wise employee confidence index score for India was 100.2 in September quarter, rising marginally from 99.6 in June this year, the report showed. “Only three countries, China, India and Brazil, are at or above the employee confidence levels first measured in Q2 of 2008,” the report stated.
In September, Brazil (105.3), China (102.8) and India had highest levels of employee confidence, while Germany (96.7), Japan (95.6) and Spain (93.3) had lowest. The largest declines in 2009 Q3 employee confidence levels compared with the second quarter were registered in France followed by Spain and Germany.
Interestingly, the US employee confidence index score dropped 1.2 per cent since June this year to 97.7. “While Q2 of 2009 showed a global economy rebounding strongly, the third quarter employee confidence scores indicate that recovery is not going to be a straight line of positively improving results,” the survey said.
As per the study by global human resource solutions provider Kenexa, except India, China and Brazil, employees from nine other countries reported a decline in employee confidence in the third quarter compared with the previous quarter.
“Globally there was about one point decline in the third quarter 2009 (in the employee confidence index), compared to five point improvement in the second quarter. China and India sustained and built very slightly on the improvements seen in the second quarter of 2009, while Japan reversed a second quarter downward trend,” Kenexa Research Institute research consultant Anne Herman said.
Employee confidence, a quarterly measure of the degree of confidence employees have in their employers’ marketplace competitiveness and their own careers, dropped to 97.9 at the end of September from 98.9 in June this year.
The country-wise employee confidence index score for India was 100.2 in September quarter, rising marginally from 99.6 in June this year, the report showed. “Only three countries, China, India and Brazil, are at or above the employee confidence levels first measured in Q2 of 2008,” the report stated.
In September, Brazil (105.3), China (102.8) and India had highest levels of employee confidence, while Germany (96.7), Japan (95.6) and Spain (93.3) had lowest. The largest declines in 2009 Q3 employee confidence levels compared with the second quarter were registered in France followed by Spain and Germany.
Interestingly, the US employee confidence index score dropped 1.2 per cent since June this year to 97.7. “While Q2 of 2009 showed a global economy rebounding strongly, the third quarter employee confidence scores indicate that recovery is not going to be a straight line of positively improving results,” the survey said.
IT market, new openings
Mid-tier IT cos look to hire up to 30k
The hire-no-more hysteria seems to be heading for a soft burial, with mid-tier and niche technology companies returning to the employment orbit as they plan to take in 25,000 to 30,000 experienced hands in the next three to nine months.
The renewed demand has been spurred by a spurt in outsourcing, better order positions and companies expanding their India operations and moving up the value chain. Those on the lookout for trained hands are companies like GlobalLogic India, Aricent, MindTree, CPA Global, Sapient, Symphony Services, Citrix, Adobe, Persistent Solutions, nVidia, Amazon , Agilent and Vertex.
Following is the companies list
CPA Global
To hire: 1,400
Vertex
To hire:1,000
UHG
To hire:1,000
Sapient
To hire: 800
Aricent
To hire: 700
MindTree
To hire: 600
GlobalLogic
To hire: 400
Symphony
To hire: 300
The renewed demand has been spurred by a spurt in outsourcing, better order positions and companies expanding their India operations and moving up the value chain. Those on the lookout for trained hands are companies like GlobalLogic India, Aricent, MindTree, CPA Global, Sapient, Symphony Services, Citrix, Adobe, Persistent Solutions, nVidia, Amazon , Agilent and Vertex.
Following is the companies list
CPA Global
To hire: 1,400
Vertex
To hire:1,000
UHG
To hire:1,000
Sapient
To hire: 800
Aricent
To hire: 700
MindTree
To hire: 600
GlobalLogic
To hire: 400
Symphony
To hire: 300
New Deals, TCS
TCS wins $63 mn deal from MP govt
Tata Consultancy Services, India's top software firm, has been selected as the lowest bidder for a Rs 2.93 billion ($63 million) project in the state of Madhya Pradesh, an official with the state power utility said.
"For the IT implementation work, Tata Consultancy Services has been selected as the L-1 (lowest bidder)," S A Ansari, Chief Engineer (IT) of the MP.
Madhya Kshetra Vidyut Vitran Company Ltd, told Reuters over telephone from the city of Bhopal.
The project will be formally awarded after approval from the board of directors of the state's distribution utilities, and will be completed in 18 months, he said.
A spokesman for TCS confirmed the company had bid for a project in the state, but declined to give further details.
The project is part of a central government-funded power reforms programme to use information technology to cap electricity distribution losses in the country.
"For the IT implementation work, Tata Consultancy Services has been selected as the L-1 (lowest bidder)," S A Ansari, Chief Engineer (IT) of the MP.
Madhya Kshetra Vidyut Vitran Company Ltd, told Reuters over telephone from the city of Bhopal.
The project will be formally awarded after approval from the board of directors of the state's distribution utilities, and will be completed in 18 months, he said.
A spokesman for TCS confirmed the company had bid for a project in the state, but declined to give further details.
The project is part of a central government-funded power reforms programme to use information technology to cap electricity distribution losses in the country.
HCL, IT market, New Deals
HCL Info bags $114 mn Rajasthan govt deal
IT hardware firm HCL Infosystems has been awarded a Rs 529 crore ($114 million) IT project for Rajasthan's power distribution utilities, a top official of the utilities said.
"We have awarded the order to HCL Infosystems," R G Gupta, chairman of Jaipur, Jodhpur and Ajmer Vidyut Vitaran Nigam Ltd, said from Jaipur.
The project involves applying technology to identify power losses across all cities and villages of Rajasthan and has to be completed in 18 months, he said.
A company spokesman declined to comment but said HCL Infosystems had bid for several R-APDRP (Re-structured Accelerated Power Development and Reform Programme) IT projects including the one in Rajasthan.
"We have awarded the order to HCL Infosystems," R G Gupta, chairman of Jaipur, Jodhpur and Ajmer Vidyut Vitaran Nigam Ltd, said from Jaipur.
The project involves applying technology to identify power losses across all cities and villages of Rajasthan and has to be completed in 18 months, he said.
A company spokesman declined to comment but said HCL Infosystems had bid for several R-APDRP (Re-structured Accelerated Power Development and Reform Programme) IT projects including the one in Rajasthan.
IT market, new openings
Google to resume hiring, acquisitions
Google Inc, the world’s most popular Internet search engine, plans to resume hiring and acquisitions after the recovering economy helped third-quarter sales beat analysts’ estimates.
Excluding revenue passed on to partner sites, sales jumped 8.4 percent to $4.38 billion from a year earlier, the company said. That compared with an average estimate of $4.25 billion in a Bloomberg survey of analysts.
Large customers stepped up spending on Google ads last quarter, a rebound from the first half of the year, Chief Financial Officer Patrick Pichette said. With the economy improving, the company can go back to investing, he said. Google had trimmed jobs and shut down underperforming businesses this year to rein in spending.
“We weathered what is an incredible recession,” Pichette said in an interview. “If you have all this behind you, the only outcome you should have as management is: ‘OK, let’s build now.’”
Net income rose 27 percent to $1.64 billion, or $5.13 a share, from $1.29 billion, or $4.06, a year earlier, the Mountain View, California-based company said. Leaving out some costs such as stock-based compensation, profit was $5.89 a share. Analysts had estimated $5.43.
Accelerating growth?
“These are very strong results -- above even the highest expectations out there,” said Andy Miedler, an analyst with Edward Jones in St Louis. He rates the stock a buy and doesn’t own it. “As the economy continues to improve, we expect accelerating growth.”
Google’s plan to boost spending may have tempered investors’ enthusiasm, said Ben Schachter, an analyst at San Francisco-based Broadpoint AmTech Inc.
“The stock would be further up if not for the bit about them investing heavily,” he said.
“We’re going to invest,” Chief Executive Officer Eric Schmidt said on a conference call with analysts. “That, I think, ultimately is good for the long term of Google.”
The company’s acquisitions will be mostly smaller companies that might help with search technology or advertising, Schmidt said. While Google is open to big purchases, those deals will be rare, he said.
Fifty companies
“They are probably the most acquisitive company in technology right now,” Gene Munster, an analyst at
Piper Jaffray & Co in Minneapolis, said in an interview with Bloomberg Television. “There are probably 50 companies out there they could acquire that will make their ads more relevant.”
Google’s paid clicks -- the number of times its ads were clicked on by consumers -- climbed about 14 percent last quarter. The average amount that Google charges for each click declined from a year earlier, falling 6 percent, a sign that advertisers are paying lower rates. Those rates may recover again as the recession eases, said Martin Pyykkonen, an analyst with Janco Partners Inc in Greenwood Village, Colorado.
Google took a harder line on expenses earlier this year, eliminating waste and shutting down some of its free employee cafes. It also closed businesses, such as a radio-programming division. In March, the company cut about 200 sales and marketingpositions, or 1 percent of its workforce.
Capital expenditures fell to $186.3 million last quarter from $451.5 million a year earlier. Google has maintained its dominance in the Internet search market this year, warding off an attack from Microsoft Corp’s Bing, which debuted in June.
Google had 64.9 percent of the US market last month, compared with 65 percent in May, according to ComScore Inc in Reston, Virginia. Microsoft’s share grew to 9.4 percent from 8 percent over that period -- mostly at the expense of Yahoo Inc, which fell to 18.8 percent from 20.1 percent.
Excluding revenue passed on to partner sites, sales jumped 8.4 percent to $4.38 billion from a year earlier, the company said. That compared with an average estimate of $4.25 billion in a Bloomberg survey of analysts.
Large customers stepped up spending on Google ads last quarter, a rebound from the first half of the year, Chief Financial Officer Patrick Pichette said. With the economy improving, the company can go back to investing, he said. Google had trimmed jobs and shut down underperforming businesses this year to rein in spending.
“We weathered what is an incredible recession,” Pichette said in an interview. “If you have all this behind you, the only outcome you should have as management is: ‘OK, let’s build now.’”
Net income rose 27 percent to $1.64 billion, or $5.13 a share, from $1.29 billion, or $4.06, a year earlier, the Mountain View, California-based company said. Leaving out some costs such as stock-based compensation, profit was $5.89 a share. Analysts had estimated $5.43.
Accelerating growth?
“These are very strong results -- above even the highest expectations out there,” said Andy Miedler, an analyst with Edward Jones in St Louis. He rates the stock a buy and doesn’t own it. “As the economy continues to improve, we expect accelerating growth.”
Google’s plan to boost spending may have tempered investors’ enthusiasm, said Ben Schachter, an analyst at San Francisco-based Broadpoint AmTech Inc.
“The stock would be further up if not for the bit about them investing heavily,” he said.
“We’re going to invest,” Chief Executive Officer Eric Schmidt said on a conference call with analysts. “That, I think, ultimately is good for the long term of Google.”
The company’s acquisitions will be mostly smaller companies that might help with search technology or advertising, Schmidt said. While Google is open to big purchases, those deals will be rare, he said.
Fifty companies
“They are probably the most acquisitive company in technology right now,” Gene Munster, an analyst at
Piper Jaffray & Co in Minneapolis, said in an interview with Bloomberg Television. “There are probably 50 companies out there they could acquire that will make their ads more relevant.”
Google’s paid clicks -- the number of times its ads were clicked on by consumers -- climbed about 14 percent last quarter. The average amount that Google charges for each click declined from a year earlier, falling 6 percent, a sign that advertisers are paying lower rates. Those rates may recover again as the recession eases, said Martin Pyykkonen, an analyst with Janco Partners Inc in Greenwood Village, Colorado.
Google took a harder line on expenses earlier this year, eliminating waste and shutting down some of its free employee cafes. It also closed businesses, such as a radio-programming division. In March, the company cut about 200 sales and marketingpositions, or 1 percent of its workforce.
Capital expenditures fell to $186.3 million last quarter from $451.5 million a year earlier. Google has maintained its dominance in the Internet search market this year, warding off an attack from Microsoft Corp’s Bing, which debuted in June.
Google had 64.9 percent of the US market last month, compared with 65 percent in May, according to ComScore Inc in Reston, Virginia. Microsoft’s share grew to 9.4 percent from 8 percent over that period -- mostly at the expense of Yahoo Inc, which fell to 18.8 percent from 20.1 percent.
TCS
TCS posts Rs.13.5 Billion second quarter net profit
Software major Tata Consultancy Services has posted a net profit of Rs.13.5 billion ($300 million) for the quarter ended Sep 30, as compared to Rs.11.7 billion ($260 million) in the corresponding period last fiscal, it said Friday.
The company's total income increased to Rs.57.2 billion ($1.27 billion) for the quarter under review from Rs.55.2 billion ($1.23 billion) in the second quarter last fiscal, TCS said in a regulatory statement.
The group's consolidated net profit rose to Rs.16.4 billion ($364 million) during the quarter, from Rs.12.7 billion ($282 million) in the like period last year.
Similarly, total consolidated income increased from Rs.67.8 billion ($1.5 billion) for the quarter ended Sep 30 last year to Rs.74.3 billion ($1.65 billion) in the second quarter this year.
The company's total income increased to Rs.57.2 billion ($1.27 billion) for the quarter under review from Rs.55.2 billion ($1.23 billion) in the second quarter last fiscal, TCS said in a regulatory statement.
The group's consolidated net profit rose to Rs.16.4 billion ($364 million) during the quarter, from Rs.12.7 billion ($282 million) in the like period last year.
Similarly, total consolidated income increased from Rs.67.8 billion ($1.5 billion) for the quarter ended Sep 30 last year to Rs.74.3 billion ($1.65 billion) in the second quarter this year.
Friday, October 16, 2009
IT market, Wipro
Wipro to hire US workers
Also see:Infosys to replace Indians by Americans
Wipro Ltd, India’s third-largest software-services provider, plans to hire more workers in the US to take advantage of a rebounding technology market.
“We are seeing signs of stability, signs of decision making coming back,” Chairman and Chief Executive Officer Azim Premji, 64, said in an interview at Bloomberg headquarters in New York yesterday. “So overall positive, but still cautious.”
Premji is betting that US employees will help the Bangalore-based company win local orders, including contracts with the federal government, as the world’s largest economy starts to recover from the worst recession since the 1930s. Wipro gets about half its revenue from the US.
The company plans to hire about 500 local employees for a new services center by June, he said. He declined to name possible locations, saying he is talking to different state governments. The company already has a center in Atlanta.
“Everybody wants employment,” said Premji, who attended Stanford University. “That’s the trump card today.”
Larger rival Infosys Technologies Ltd. reported second- quarter profit that beat analysts’ estimates last week after winning more business from current customers.
Wipro designs and builds software programs, maintains computers, and provides product-engineering services and back- office support to General Electric Co, Cisco Systems Inc, Citigroup Inc and other customers. It will report results on Oct. 27 for the three months ended Sept. 30.
Wipro rose 1.4 percent to 581.70 rupees yesterday in Mumbai trading. The stock has more than doubled this year, compared with a 79 percent increase for the benchmark Sensitive Index on the Bombay Stock Exchange.
U.S. Universities
The company has been working with schools such as the Georgia Institute of Technology to help bolster engineering education, which is subpar in the U.S., Premji said. U.S. graduates have become more affordable in the recession, he said.
Premji said he was worried about President Barack Obama limiting H-1B visas in a bid to fight unemployment. The visas allow foreign workers to come to the U.S.
Wipro Ltd, India’s third-largest software-services provider, plans to hire more workers in the US to take advantage of a rebounding technology market.
“We are seeing signs of stability, signs of decision making coming back,” Chairman and Chief Executive Officer Azim Premji, 64, said in an interview at Bloomberg headquarters in New York yesterday. “So overall positive, but still cautious.”
Premji is betting that US employees will help the Bangalore-based company win local orders, including contracts with the federal government, as the world’s largest economy starts to recover from the worst recession since the 1930s. Wipro gets about half its revenue from the US.
The company plans to hire about 500 local employees for a new services center by June, he said. He declined to name possible locations, saying he is talking to different state governments. The company already has a center in Atlanta.
“Everybody wants employment,” said Premji, who attended Stanford University. “That’s the trump card today.”
Larger rival Infosys Technologies Ltd. reported second- quarter profit that beat analysts’ estimates last week after winning more business from current customers.
Wipro designs and builds software programs, maintains computers, and provides product-engineering services and back- office support to General Electric Co, Cisco Systems Inc, Citigroup Inc and other customers. It will report results on Oct. 27 for the three months ended Sept. 30.
Wipro rose 1.4 percent to 581.70 rupees yesterday in Mumbai trading. The stock has more than doubled this year, compared with a 79 percent increase for the benchmark Sensitive Index on the Bombay Stock Exchange.
U.S. Universities
The company has been working with schools such as the Georgia Institute of Technology to help bolster engineering education, which is subpar in the U.S., Premji said. U.S. graduates have become more affordable in the recession, he said.
Premji said he was worried about President Barack Obama limiting H-1B visas in a bid to fight unemployment. The visas allow foreign workers to come to the U.S.
CTS
Cognizant snaps up UBS' Indian captive for $75 million
UBS, Switzerland’s biggest bank by assets, has sold its Indian back-office captive to multinational services firm Cognizant Technology Solutions for around $75 million along with a five-year outsourcing contract worth up to $442 million. The acquisition will strengthen Cognizant’s BPO practice and also help it expand its relations with UBS, an existing client.
“We are among the top five companies providing technological services for the financial services sector. This acquisition helps us consolidate our position, expand our service offering and take our solutions to a wider geography. We have significant revenues coming from the US whereas the USB ISC (India Service Centre) has more than half its revenues coming from APAC and Europe regions. So, this helps in diversifying our revenue base,” Cognizant vice-chairman Lakshmi Narayanan told ET NOW on Thursday.
A report by Deutsche Bank said the deal was reasonably priced, through which Cognizant would acquire highly skilled employees. The report further said, “It highlights Cognizant’s ability to expand with existing clients and captives tend to have margin leverage potential related to improved span of control opportunities.”
ET had reported last month that UBS was in discussions with Cognizant for a potential sale of its UBS India Service Centre and was exploring to bundle an outsourcing contract with the transaction. The bank had held discussions with Infosys and Wipro who count UBS as their customer.
Divesting non-core captive operations is a strategy adopted by banks such as Citigroup and UBS for focusing better on their core operations and also gain better outsourcing rates by bundling such transactions with a multi-year contract.
An upfront payment also helps them unlock value from non-core assets. Citibank sold its Indian back office business to TCS for around $505 million in October last year and Citi Technology Services for around $127 million to Wipro in December last year. Both these transactions came with assured outsourcing business of around $3 billion together for these vendors.
While around 2,000 staff of UBS’ India captive unit in Hyderabad will move to Cognizant as part of this transaction, the bank’s captive operations in Poland has not been included in this deal, a Cognizant spokesman added.
The $442-million outsourcing contract bundled with this deal includes work beyond back office and knowledge process outsourcing and could involve application development and IT hardware management as well.
“We are among the top five companies providing technological services for the financial services sector. This acquisition helps us consolidate our position, expand our service offering and take our solutions to a wider geography. We have significant revenues coming from the US whereas the USB ISC (India Service Centre) has more than half its revenues coming from APAC and Europe regions. So, this helps in diversifying our revenue base,” Cognizant vice-chairman Lakshmi Narayanan told ET NOW on Thursday.
A report by Deutsche Bank said the deal was reasonably priced, through which Cognizant would acquire highly skilled employees. The report further said, “It highlights Cognizant’s ability to expand with existing clients and captives tend to have margin leverage potential related to improved span of control opportunities.”
ET had reported last month that UBS was in discussions with Cognizant for a potential sale of its UBS India Service Centre and was exploring to bundle an outsourcing contract with the transaction. The bank had held discussions with Infosys and Wipro who count UBS as their customer.
Divesting non-core captive operations is a strategy adopted by banks such as Citigroup and UBS for focusing better on their core operations and also gain better outsourcing rates by bundling such transactions with a multi-year contract.
An upfront payment also helps them unlock value from non-core assets. Citibank sold its Indian back office business to TCS for around $505 million in October last year and Citi Technology Services for around $127 million to Wipro in December last year. Both these transactions came with assured outsourcing business of around $3 billion together for these vendors.
While around 2,000 staff of UBS’ India captive unit in Hyderabad will move to Cognizant as part of this transaction, the bank’s captive operations in Poland has not been included in this deal, a Cognizant spokesman added.
The $442-million outsourcing contract bundled with this deal includes work beyond back office and knowledge process outsourcing and could involve application development and IT hardware management as well.
IT market
Dell loses no. 2 spot to Acer
Dell Inc, once the world’s top seller of personal computers, fell from second to third place in the global PC market last quarter after Acer Inc surged past the company.
Dell was the only top-five PC maker to see its shipments drop in the third quarter from a year earlier, market research firms IDC and Gartner Inc said today in separate reports. Hewlett-Packard Co, which took the lead from Dell in 2006, retained its top ranking.
Dell has struggled to reach consumer laptop shoppers -- the industry’s biggest source of growth right now, said Loren Loverde, an analyst for IDC. Acer’s shipments surged 25.6 percent last quarter, the fastest growth among the top PC makers, buoyed by sales of low-cost netbooks. Dell gets about 80 percent of its sales from business customers, with 20 percent coming from consumers.
“They’re dropping for the same reason that they have been having trouble over the last couple of years: They’re more focused on U.S. commercial desktops than all their competitors,” Loverde said. “Where the market has been growing is in retail with portables. That’s proven to be a challenge for Dell.”
‘Profitable growth’
Dell’s worldwide share fell to 12.7 percent from 14.2 percent on an 8.4 percent drop in shipments, IDC said. Gartner put Dell’s drop at 6.7 percent.
“We’re focused on profitable growth and not simply share gain,” Dell said in a statement. “We’ll announce financial results for our fiscal third quarter on Nov. 19 and will hold further comment until then.”
The total market rose 2.3 percent, a rebound from declines in the first and second quarters, IDC said. Hewlett-Packard, based in Palo Alto, California, captured a 20.2 percent share after a 9.3 percent gain in shipments, IDC said. Lenovo Group Ltd. and Toshiba Corp. rounded out the top five.
In the US market, which grew 2.5 percent last quarter, Hewlett-Packard led, followed by Dell and Acer, according to Framingham, Massachusetts-based IDC. Gartner, based in Stamford, Connecticut, gave the U.S. lead to Dell.
Both research firms ranked Apple Inc, maker of the Macintosh computer, in fourth place in the US.
Dell, based in Round Rock, Texas, rose 32 cents to $15.63 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 53 percent this year. Hewlett-Packard advanced $1.20 to $47.89.
Dell was the only top-five PC maker to see its shipments drop in the third quarter from a year earlier, market research firms IDC and Gartner Inc said today in separate reports. Hewlett-Packard Co, which took the lead from Dell in 2006, retained its top ranking.
Dell has struggled to reach consumer laptop shoppers -- the industry’s biggest source of growth right now, said Loren Loverde, an analyst for IDC. Acer’s shipments surged 25.6 percent last quarter, the fastest growth among the top PC makers, buoyed by sales of low-cost netbooks. Dell gets about 80 percent of its sales from business customers, with 20 percent coming from consumers.
“They’re dropping for the same reason that they have been having trouble over the last couple of years: They’re more focused on U.S. commercial desktops than all their competitors,” Loverde said. “Where the market has been growing is in retail with portables. That’s proven to be a challenge for Dell.”
‘Profitable growth’
Dell’s worldwide share fell to 12.7 percent from 14.2 percent on an 8.4 percent drop in shipments, IDC said. Gartner put Dell’s drop at 6.7 percent.
“We’re focused on profitable growth and not simply share gain,” Dell said in a statement. “We’ll announce financial results for our fiscal third quarter on Nov. 19 and will hold further comment until then.”
The total market rose 2.3 percent, a rebound from declines in the first and second quarters, IDC said. Hewlett-Packard, based in Palo Alto, California, captured a 20.2 percent share after a 9.3 percent gain in shipments, IDC said. Lenovo Group Ltd. and Toshiba Corp. rounded out the top five.
In the US market, which grew 2.5 percent last quarter, Hewlett-Packard led, followed by Dell and Acer, according to Framingham, Massachusetts-based IDC. Gartner, based in Stamford, Connecticut, gave the U.S. lead to Dell.
Both research firms ranked Apple Inc, maker of the Macintosh computer, in fourth place in the US.
Dell, based in Round Rock, Texas, rose 32 cents to $15.63 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 53 percent this year. Hewlett-Packard advanced $1.20 to $47.89.
IBM, Outsourcing
Brazil's CBD In 5-Yr Outsourcing Pact With IBM
Brazilian supermarket chain Companhia Brasileira de Distribuicao (CBD, PCAR5.BR), or CBD, signed a partnership with International Business Machines Corp. (IBM) to outsource its information technology, IBM said late Wednesday in a press release.
"The deal, worth about $115 million, was designed by IBM and CBD to meet current business needs and to support the expansion planned for the next years," said IBM.
The five year agreement will transfer two data centers of the retail chain to an IBM Global Delivery Center, based in Hortolandia, Sao Paulo.
CBD is jointly controlled by the Diniz family of Sao Paulo, the chain's founders, and by French retail company Casino Guichard-Perrachon SA (CO.FR). Its main competitors in Brazil include U.S. retail giant Wal-Mart Stores Inc. (WMT) and France's Carrefour SA (CRERY, CA.FR).
Source: WallStreetJournal
"The deal, worth about $115 million, was designed by IBM and CBD to meet current business needs and to support the expansion planned for the next years," said IBM.
The five year agreement will transfer two data centers of the retail chain to an IBM Global Delivery Center, based in Hortolandia, Sao Paulo.
CBD is jointly controlled by the Diniz family of Sao Paulo, the chain's founders, and by French retail company Casino Guichard-Perrachon SA (CO.FR). Its main competitors in Brazil include U.S. retail giant Wal-Mart Stores Inc. (WMT) and France's Carrefour SA (CRERY, CA.FR).
Source: WallStreetJournal
IT market
Polaris Software to acquire Laser Soft for Rs 52 cr
IT firm Polaris Software Lab on Thursday said it will acquire software product company, Laser Soft, for Rs 52 crore.
The company has signed a definitive agreement with Chennai based-Laser Soft and its principal shareholders to acquire its 100 per cent equity shares, Polaris Software said in a filing to the Bombay Stock Exchange (BSE).
"The value of the deal is about Rs 52 crore all in cash, linked to performance" it further said.
The deal is subject to the regulatory approvals, Polaris said.
Laser Soft is a software product company offering an entire range of banking operations, which includes core banking and specialised products like treasury, trade finance and cash management.
Shares of Polaris Software Lab were trading at Rs 149.20 on the BSE, up 0.74 per cent from its previous close.
The company has signed a definitive agreement with Chennai based-Laser Soft and its principal shareholders to acquire its 100 per cent equity shares, Polaris Software said in a filing to the Bombay Stock Exchange (BSE).
"The value of the deal is about Rs 52 crore all in cash, linked to performance" it further said.
The deal is subject to the regulatory approvals, Polaris said.
Laser Soft is a software product company offering an entire range of banking operations, which includes core banking and specialised products like treasury, trade finance and cash management.
Shares of Polaris Software Lab were trading at Rs 149.20 on the BSE, up 0.74 per cent from its previous close.
Thursday, October 15, 2009
Infosys, IT market
Infosys to replace Indians by Americans
To overcome the visa problems and strengthen their businesses, Infosys Technologies is likely to hire more number of local talents in the U.S. The company has already recruited 72 Americans and 140 more offers are under way.
Nandita Gurjar, Senior Vice President and Group Head of Human Resources at Infosys told Financial Chronicle that under a hiring plan started in April, 1,000 Americans will be taken on board. This lateral hiring will be typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the U.S.
The hiring of more Americans is part of the company's strategy to have more non-Indians, who now account for 4.67 percent of the employee strength. The company wants to take the figure to 15 percent by 2012.
According to the company's Director, T V Mohandas Pai, Infosys has not planned to fill senior management positions in the U.S. now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said that the company believed in having the 'most capable person heading the best positions'.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the U.S.), including 4,900 non-Indians. 1,000 Indian staffs are stationed in the U.S.; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
Infosys is also recruiting in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines. It is generally believed that local hiring costs Indian companies more. However, Gurjar said, "This is no longer true. The U.S. minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity."
Nandita Gurjar, Senior Vice President and Group Head of Human Resources at Infosys told Financial Chronicle that under a hiring plan started in April, 1,000 Americans will be taken on board. This lateral hiring will be typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the U.S.
The hiring of more Americans is part of the company's strategy to have more non-Indians, who now account for 4.67 percent of the employee strength. The company wants to take the figure to 15 percent by 2012.
According to the company's Director, T V Mohandas Pai, Infosys has not planned to fill senior management positions in the U.S. now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said that the company believed in having the 'most capable person heading the best positions'.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the U.S.), including 4,900 non-Indians. 1,000 Indian staffs are stationed in the U.S.; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
Infosys is also recruiting in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines. It is generally believed that local hiring costs Indian companies more. However, Gurjar said, "This is no longer true. The U.S. minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity."
IT market, TCS
TCS to be fined for passport project delay
India's top IT services firm by sales, Tata Consultancy Services, has been reportedly asked by the government to pay penalty for missing the second deadline in implementing Passport Seva Project.
TCS was to set up seven pilot Passport Seva Kendras (PSK) in Chandigarh and Bangalore by October 1.
According to a report, the government has sent a notice to the company asking it to pay Rs 2 lakh as penalty for every week of delay in project.
The ministry of external affairs' (MEA) Passport Seva Project is estimated to cost over Rs 100 crore. But even after a year since the government signed an agreement with TCS to issue passports within three days, the project is yet to take off.
After missing its first deadline in June, TCS had announced that the pilot project in Bangalore and Chandigarh would start in October.
However, recent reports revealed that the main reason for delay is that TCS had not got its software ready. There have been too many errors in the software which is currently in testing phase.
TCS was to set up seven pilot Passport Seva Kendras (PSK) in Chandigarh and Bangalore by October 1.
According to a report, the government has sent a notice to the company asking it to pay Rs 2 lakh as penalty for every week of delay in project.
The ministry of external affairs' (MEA) Passport Seva Project is estimated to cost over Rs 100 crore. But even after a year since the government signed an agreement with TCS to issue passports within three days, the project is yet to take off.
After missing its first deadline in June, TCS had announced that the pilot project in Bangalore and Chandigarh would start in October.
However, recent reports revealed that the main reason for delay is that TCS had not got its software ready. There have been too many errors in the software which is currently in testing phase.
IT market
Intel results beat forecasts
Intel Corp's quarterly outlook and results soared past expectations, sending shares 7 per cent higher and fueling optimism over a tech sector recovery before the crucial holiday season.
Intel's rosier than expected forecast and comments about recovering demand for personal computers cheered markets and helped lift shares in tech heavyweights from Dell to Hewlett-Packard.
Intel Chief Financial Officer Stacy Smith said in an interview the technology sector was leading the way out of the economic downturn as demand for PCs rebounded.
Results from the world's largest chipmakers bolstered hopes of a sector-wide recovery. Global chip sales posted their sixth consecutive monthly increase in August, and analysts forecast September chip sales will likely rose more than 6 per cent from August.
They cited chip orders ahead of the holidays as well as the upcoming release of Microsoft Corp's Windows 7 operating system as sales drivers.
"What it says is we're on the mend, it's a rebound," said ITIC analyst Laura DiDio. "This is jump-starting momentum, so the outlook for 2010 is very good." Chief Executive Paul Otellini told analysts on a conference call that demand in the third quarter was consumer driven and that back-to-school sales exceeded expectations.
Otellini, whose company's "Intel Inside" stickers grace eight of every 10 PCs, said inventory remained below normal. FTN Equity Capital Markets analyst Joanne Feeney said Intel's results will likely boost the market.
"That will reassure people that we're not running into another situation where we have another inventory problem," she said.
Intel executives said their factories are running at 80 per cent to 90 per cent of capacity in the current quarter.
Intel's rosier than expected forecast and comments about recovering demand for personal computers cheered markets and helped lift shares in tech heavyweights from Dell to Hewlett-Packard.
Intel Chief Financial Officer Stacy Smith said in an interview the technology sector was leading the way out of the economic downturn as demand for PCs rebounded.
Results from the world's largest chipmakers bolstered hopes of a sector-wide recovery. Global chip sales posted their sixth consecutive monthly increase in August, and analysts forecast September chip sales will likely rose more than 6 per cent from August.
They cited chip orders ahead of the holidays as well as the upcoming release of Microsoft Corp's Windows 7 operating system as sales drivers.
"What it says is we're on the mend, it's a rebound," said ITIC analyst Laura DiDio. "This is jump-starting momentum, so the outlook for 2010 is very good." Chief Executive Paul Otellini told analysts on a conference call that demand in the third quarter was consumer driven and that back-to-school sales exceeded expectations.
Otellini, whose company's "Intel Inside" stickers grace eight of every 10 PCs, said inventory remained below normal. FTN Equity Capital Markets analyst Joanne Feeney said Intel's results will likely boost the market.
"That will reassure people that we're not running into another situation where we have another inventory problem," she said.
Intel executives said their factories are running at 80 per cent to 90 per cent of capacity in the current quarter.
Wednesday, October 14, 2009
Accenture, IBM, Infosys, Outsourcing
Wal-Mart to issue $1 bn IT contract: Sources
Global retail giant Wal-Mart may be all set to issue an IT contract worth USD 1 billion. CNBC-TV18 learns that it will select upto 10 IT vendors for the contract. CNBC-TV18’s Kritika Saxena reports that the contract, for which the bid will open by July 2010, will span across six to eight years. TCS, Infosys, Wipro and HCL Tech emerge as potential bidders along with IBM and Accenture.
However, Wal-Mart says they do not engage in speculation about IT activities in India.
Here is a verbatim transcript of her comments on CNBC-TV18.
Wal-Mart is all set to issue a large scale IT project. This could be the largest project in the retail space. What we pick up from our sources is that the contract is expected to be valued between USD 800 million to a USD 1 billion. Who are the IT firms?—this is good news for IT companies definitely. It will be too early to talk about the likely contenders but who are the potential bidders?—What we pick up from our sources is that four large-cap Indian IT firms—Infosys, TCS, Wipro and HCL Tech would be looking to bid for this project. Even multi-national firms like IBM and Accenture would be looking to bid for these projects. But these are the potential bidders and it’s way too early to comment for these individual companies, since the bids will be open only by approximately July to August 2010.
If you see the recent activities by British Petroleum and Exxon Mobil in the IT space—they have issued large scale contract of USD 1.5 to USD 1 billion but in the retail space this would be the largest so far.
Wal-Mart and obviously individual IT companies too would be looking to see boost in the revenues after this IT contract. These individual IT companies—the plan is to issue about USD 50-100 million individual contracts as spread across, some would be about USD 250-300 million.
When we contracted Wal-Mart for an official comment on this they said that they have several inquiries about their IT activities in India but they do not comment on individual specifications on this.
However, Wal-Mart says they do not engage in speculation about IT activities in India.
Here is a verbatim transcript of her comments on CNBC-TV18.
Wal-Mart is all set to issue a large scale IT project. This could be the largest project in the retail space. What we pick up from our sources is that the contract is expected to be valued between USD 800 million to a USD 1 billion. Who are the IT firms?—this is good news for IT companies definitely. It will be too early to talk about the likely contenders but who are the potential bidders?—What we pick up from our sources is that four large-cap Indian IT firms—Infosys, TCS, Wipro and HCL Tech would be looking to bid for this project. Even multi-national firms like IBM and Accenture would be looking to bid for these projects. But these are the potential bidders and it’s way too early to comment for these individual companies, since the bids will be open only by approximately July to August 2010.
If you see the recent activities by British Petroleum and Exxon Mobil in the IT space—they have issued large scale contract of USD 1.5 to USD 1 billion but in the retail space this would be the largest so far.
Wal-Mart and obviously individual IT companies too would be looking to see boost in the revenues after this IT contract. These individual IT companies—the plan is to issue about USD 50-100 million individual contracts as spread across, some would be about USD 250-300 million.
When we contracted Wal-Mart for an official comment on this they said that they have several inquiries about their IT activities in India but they do not comment on individual specifications on this.
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