Indian IT services firm Mahindra Satyam has added 35 new clients since April 13 and lost just a handful, said the firm's chief executive, adding that the worst was behind it and that spending by key customer groups was improving.
Mahindra Satyam, earlier known as Satyam Computer Services, was acquired by India's Tech Mahindra in April after the firm was hit by India's biggest corporate fraud, which came to light in January.
"I do believe that we are now stable from a customer, or a delivery perspective," C P Gurnani said.
"I am very, very clear that the bottom is behind us and we are back on a path to recovery," he added in the interview on the sidelines of a World Economic Forum event in New Delhi.
He said the company, which lost 25 to 30 percent of its customers between January and Tech Mahindra's agreement to take over the firm on April 13, had since then added 35 new customers and, to his knowledge, lost just three.
"These 35 logo accounts have come from emerging markets, the Middle East and Africa, and we have also added some clients in the US and Europe," Gurnani said.
The firm had about 380 customers when Tech Mahindra won an auction to take it over, said Gurnani, who was president of international operations at Tech Mahindra before taking over at Mahindra Satyam.
Tech Mahindra, a unit of tractor and utility vehicle maker Mahindra & Mahindra, owns about 43 percent of Mahindra Satyam.
By comparison, rival Wipro said it added 37 clients in the July-September quarter.
Satyam's founder and then-chairman Ramalinga Raju shocked investors in January by saying profits had been overstated for years, which at the time had put in doubt the survival of a Hyderabad-based company once ranked as India's No. 4 software services exporter.
"I am very happy with the progress that we made, considering that this company had a situation where the focus on new sales had practically become zero," said Gurnani.
He said growth for the IT outsourcing industry would come from clients including the financial services sector.
"They went through a fair amount of slowdown in spending. And now with some of the, at least the American firms you've seen, the kind of numbers they are returning with, I do believe that they will accelerate their spending," he said.
Bigger rivals Infosys and Tata Consultancy Services have said demand from financial services clients was stabilising, but manufacturing and telecoms remained weak spots.
"Similarly healthcare, education, government, public sector -- I mean these are the areas where the spending velocity will be higher than last year," Gurnani said.
"The momentum is good, the uptake has improved, and I hope that it translates to better numbers not only for us but for the Indian IT industry," he said.
Gurnani also said the restatement of company results for recent years would be made on or before June 30, 2010.
Tuesday, November 10, 2009
BPO, Infosys, New Deals
Infosys eyeing acquisitions in Europe, US
The back-office arm of Infosys Technologies, India's No. 2 software services provider, is looking at acquiring firms in Europe and in the United States of $50 million to $100 million, a top official said on Monday.
Infosys BPO would also hire 1,200 people in the current financial year, the unit's chief executive, Amitabh Chaudhry, told reporters on the sidelines of the World Economic Forum.
Infosys BPO would also hire 1,200 people in the current financial year, the unit's chief executive, Amitabh Chaudhry, told reporters on the sidelines of the World Economic Forum.
Saturday, November 7, 2009
IT market, Outsourcing
Indian engineers becoming backbone of Japan's IT industry
Indian system engineers have emerged as the backbone of Japan's IT industry and more are flocking to the country which is witnessing a steep decline in its work force.
Indian system engineers are making their presence felt in Japan's information technology industry. Around 22,000 Indians are living in Japan at the end of 2008, nearly double the number a decade ago.
"India is already the international standard in the IT world," said Kenichi Yoshida, a director of Softbridge Solutions Japan Co., a staffing company. Its founder is an Indian-American, who set up the Japanese company in 2002.
Indian engineers are sent out to Japan after studying Japanese language for five months. In addition to operation and maintenance of financial information systems, they are in charge of systems development for computers and mobile phones, Kyodo news agency reported.
"While the number of working people is decreasing in Japan, in India the number will continue to increase until 2040. Education levels are also high. It's important for Japanese industry to work together with India," Yoshida said.
His company is also providing opportunities for Japanese engineers to undergo training in India for two to four months, and major Japanese enterprises are taking advantage of the service.
"Everything is in English there. They eat curry from same bowl and return home a lot tougher," he said.
Tokyo's Edogawa Ward has the highest number of Indian residents, at about 2,200. After visa requirements for engineers working in Japan were eased in 2001, Indians flocked to the ward because it is close to the centre of Tokyo and prices are lower than in other wards.
"Until several years ago, there were only men in their 20s whose families were back home, but recently, the number of Indians accompanied by their families is increasing," said Jagmohan Chandrani, 57, a company president who came to Japan about 30 years ago.
Chandrani imports and sells black tea, runs a guest house and also serves as leader of the Indian society in the ward, assisting his countrymen in their day-to-day lives.
Many new residents are from Bangalore, known as India's Silicon Valley. Given that tandoori chicken and nan, which are popular in Japan, are northern Indian dishes, Chandrani has opened a southern Indian restaurant and a food store for engineers yearning for the taste of home.
He also participates in local events and holds an Indian festival twice a year, inviting Japanese from neighboring areas.
Chandrani says he hopes the ward will become not an 'India town' but a place serving as bridge between the two countries.
Indian system engineers are making their presence felt in Japan's information technology industry. Around 22,000 Indians are living in Japan at the end of 2008, nearly double the number a decade ago.
"India is already the international standard in the IT world," said Kenichi Yoshida, a director of Softbridge Solutions Japan Co., a staffing company. Its founder is an Indian-American, who set up the Japanese company in 2002.
Indian engineers are sent out to Japan after studying Japanese language for five months. In addition to operation and maintenance of financial information systems, they are in charge of systems development for computers and mobile phones, Kyodo news agency reported.
"While the number of working people is decreasing in Japan, in India the number will continue to increase until 2040. Education levels are also high. It's important for Japanese industry to work together with India," Yoshida said.
His company is also providing opportunities for Japanese engineers to undergo training in India for two to four months, and major Japanese enterprises are taking advantage of the service.
"Everything is in English there. They eat curry from same bowl and return home a lot tougher," he said.
Tokyo's Edogawa Ward has the highest number of Indian residents, at about 2,200. After visa requirements for engineers working in Japan were eased in 2001, Indians flocked to the ward because it is close to the centre of Tokyo and prices are lower than in other wards.
"Until several years ago, there were only men in their 20s whose families were back home, but recently, the number of Indians accompanied by their families is increasing," said Jagmohan Chandrani, 57, a company president who came to Japan about 30 years ago.
Chandrani imports and sells black tea, runs a guest house and also serves as leader of the Indian society in the ward, assisting his countrymen in their day-to-day lives.
Many new residents are from Bangalore, known as India's Silicon Valley. Given that tandoori chicken and nan, which are popular in Japan, are northern Indian dishes, Chandrani has opened a southern Indian restaurant and a food store for engineers yearning for the taste of home.
He also participates in local events and holds an Indian festival twice a year, inviting Japanese from neighboring areas.
Chandrani says he hopes the ward will become not an 'India town' but a place serving as bridge between the two countries.
IT market, new openings
India needs 5 Lakh project managers: PMI
According to a research by Project Management Institute (PMI), India will need about five lakh project managers in the future to complete 591 projects being carried out in the country.
About 591 projects each worth more than Rs. 100 crore were being executed in the country and it required a great number of project managers in order to finish them on time, said Raj Kalady, Managing Director (MD), PMI.
"The initial estimates of Rs. 5.25 lakh crore for the total projects have aroused to Rs. 5.85 lakh crore due to lack of proper project management," said Kaladi.
PMI will organize an all India conference starting from November 13, former MD of Maruti Udyog will be the key note speaker in the conference and NASSCOMM President Som Mittal and ISRO Chairman Dr. K Radha Krishnan are among others to attend the conference.
Kalady stated that PMI has developed 12 applications of project management on the lines of world's best practices. The institute was also negotiating with some of educational institutions to offer scholarships to students pursuing project management course.
About 591 projects each worth more than Rs. 100 crore were being executed in the country and it required a great number of project managers in order to finish them on time, said Raj Kalady, Managing Director (MD), PMI.
"The initial estimates of Rs. 5.25 lakh crore for the total projects have aroused to Rs. 5.85 lakh crore due to lack of proper project management," said Kaladi.
PMI will organize an all India conference starting from November 13, former MD of Maruti Udyog will be the key note speaker in the conference and NASSCOMM President Som Mittal and ISRO Chairman Dr. K Radha Krishnan are among others to attend the conference.
Kalady stated that PMI has developed 12 applications of project management on the lines of world's best practices. The institute was also negotiating with some of educational institutions to offer scholarships to students pursuing project management course.
Infosys
Infosys offers multi-function human resource solutions
Infosys Technologies, in association with Oracle, will offer managed services platform that will help companies streamline their human resource (HR) operations and reduce costs.
"The platform enables us to offer the next generation of multi-process HR transformational outsourcing to our global clients cost-effectively," the company said in a statement.
Built on Oracle's PeopleSoft enterprise human capital management suite, the offering will help companies streamline their HR operations and reduce costs, as it includes hire-to-retire processes and functions such as HR administration, payroll and talent management.
"Clients can take advantage of the scalable IT infrastructure to achieve economies of scale, best practices and variable cost models," Infosys vice-president Anantha Radhakrishnan said.
"Offshore teams will provide integrated technology, process and language support from multiple offshore and near-shore delivery centers."
The global software major has teamed with Oracle to promote the offering in Australia and New Zealand and extend it to Asia, Europe and the Americas.
Oracle vice-president Tibor Beles said the combination of Oracle's platform and Infosys' IT and HR capabilities can help global organisations achieve HR process transformation and cost reduction using a "pay-as-you-go" variable pricing model.
"The platform enables us to offer the next generation of multi-process HR transformational outsourcing to our global clients cost-effectively," the company said in a statement.
Built on Oracle's PeopleSoft enterprise human capital management suite, the offering will help companies streamline their HR operations and reduce costs, as it includes hire-to-retire processes and functions such as HR administration, payroll and talent management.
"Clients can take advantage of the scalable IT infrastructure to achieve economies of scale, best practices and variable cost models," Infosys vice-president Anantha Radhakrishnan said.
"Offshore teams will provide integrated technology, process and language support from multiple offshore and near-shore delivery centers."
The global software major has teamed with Oracle to promote the offering in Australia and New Zealand and extend it to Asia, Europe and the Americas.
Oracle vice-president Tibor Beles said the combination of Oracle's platform and Infosys' IT and HR capabilities can help global organisations achieve HR process transformation and cost reduction using a "pay-as-you-go" variable pricing model.
IT market
Citi continues to divest stake in Polaris
Citi completed another round of selling mid-tier software company Polaris Software Lab’s shares in the open market on Friday. In the last few months, OrbiTech, an entity controlled by Citi has sold off over 5% of its stake in the company.
According to bulk deal trade details on the NSE, OrbiTech sold 10.29 lakh shares at Rs 168.56 apiece on Friday. As of 30 June 2009, Citi held a 43.33% stake in Chennai-based Polaris but after a series of open market transactions, that stake is down by 5.2% to 38.13%.
Citi holds a stake in Polaris through two entities-OrbiTech and Citibank A/C OrbiTech Ltd. Apart from these, there is also an entity called OrbiTech Employees Welfare Trust, which has 1.41% in Polaris.
When contacted, Polaris CFO R Srikanth said that the transactions were a positive sign as it meant more diversification in terms of investors. “There is active buying happening at the Polaris counter, there is good interest,” he said. Mr Srikanth however added that the identity of buyers was not known.
According to bulk deal trade details on the NSE, OrbiTech sold 10.29 lakh shares at Rs 168.56 apiece on Friday. As of 30 June 2009, Citi held a 43.33% stake in Chennai-based Polaris but after a series of open market transactions, that stake is down by 5.2% to 38.13%.
Citi holds a stake in Polaris through two entities-OrbiTech and Citibank A/C OrbiTech Ltd. Apart from these, there is also an entity called OrbiTech Employees Welfare Trust, which has 1.41% in Polaris.
When contacted, Polaris CFO R Srikanth said that the transactions were a positive sign as it meant more diversification in terms of investors. “There is active buying happening at the Polaris counter, there is good interest,” he said. Mr Srikanth however added that the identity of buyers was not known.
IT market
Apple's Steve Jobs named CEO of the decade
He single-handedly saved Apple, wrought a revolution in online music, created a world-beating smartphone and led Pixar to dominate computer animation.
So it's no surprise that Apple chief executive Steve Jobs was named CEO of the decade on Thursday by Fortune magazine, which said that Jobs' success in reordering four industries - computers, music, movies and mobile telephones - was "unheard of."
"It's often noted that he's a showman, a born salesman, a magician who creates a famed reality-distortion field, a tyrannical perfectionist," the report said. "It's totally accurate, of course, and the descriptions contribute to his legend."
Comparing Jobs favourably to Henry Ford, PanAm's Juan Trippe and Conrad Hilton, the report said: "In the past decade, Jobs and Apple have entered and changed the industries of music, movies and cell phones. The company has also remained in the computer business, where it continues to innovate as it has done for decades. Remaking any one business is a career-defining achievement; four is unheard of."
The report surveyed Jobs' achievements since he returned to Apple in 1997, 12 years after being ousted from the company he founded.
It took him several years to get the company back in shape. Even as he introduced his long-term digital lifestyle strategy and the revolutionary iTunes software and music player in 2000, the company was facing bankruptcy.
It now has 34,000 employees and is valued at over $170 billion. During this period he also nurtured computer animation shop Pixar, which he sold to Disney in 2006 for $7.5 billion, making him the largest shareholder in the entertainment conglomerate.
So it's no surprise that Apple chief executive Steve Jobs was named CEO of the decade on Thursday by Fortune magazine, which said that Jobs' success in reordering four industries - computers, music, movies and mobile telephones - was "unheard of."
"It's often noted that he's a showman, a born salesman, a magician who creates a famed reality-distortion field, a tyrannical perfectionist," the report said. "It's totally accurate, of course, and the descriptions contribute to his legend."
Comparing Jobs favourably to Henry Ford, PanAm's Juan Trippe and Conrad Hilton, the report said: "In the past decade, Jobs and Apple have entered and changed the industries of music, movies and cell phones. The company has also remained in the computer business, where it continues to innovate as it has done for decades. Remaking any one business is a career-defining achievement; four is unheard of."
The report surveyed Jobs' achievements since he returned to Apple in 1997, 12 years after being ousted from the company he founded.
It took him several years to get the company back in shape. Even as he introduced his long-term digital lifestyle strategy and the revolutionary iTunes software and music player in 2000, the company was facing bankruptcy.
It now has 34,000 employees and is valued at over $170 billion. During this period he also nurtured computer animation shop Pixar, which he sold to Disney in 2006 for $7.5 billion, making him the largest shareholder in the entertainment conglomerate.
H1-B, IT market, NRIs
H-1B visa applications lowest since 2003
More than six months after the federal government began accepting petitions for work visas popular with Silicon Valley companies, thousands of spots remain open, a reflection of the nation's high unemployment and the political pressure to hire citizens, experts say.
As of last week, 46,700 H-1B visa applications had been submitted, thousands less than the 65,000 allocated for fiscal year 2010 and the lowest number since 2003. The cap for 20,000 additional H-1B visas reserved for foreign graduates of U.S. colleges with at least a master's degree was met, though applications are still being accepted.
Tech industry insiders say the recession is primarily responsible for the dearth of applications. "There is definitely a sense that there is a growing hostility toward some of the (visa) programs, but I don't think that is related to the downturn" in petitions, said Jenifer Verdery, Intel's director of work force policy. "You are not going to see big ramp-ups in hiring during the downturn."
But political pressure did affect hiring in other industries. The federal stimulus law includes provisions making it difficult for financial companies receiving money from the Troubled Asset Relief Program, or TARP, to hire H-1B workers. The requirement forced companies
like Bank of America to rescind job offers to foreign professionals.
Julie Pearl, a San Francisco-based corporate immigration lawyer who works with valley companies, says her firm's caseload for visa work has been cut in half. "In the financial industry, H-1B (applications) are down almost 75 percent," she added.
Sen. Charles Grassley has criticized tech companies for not protecting jobs of U.S. citizens over those of foreigners as they lay off thousands of employees at a clip. The Iowa Republican and Sen. Richard Durbin, an Illinois Democrat, in April reintroduced a bill that would require companies to do everything they can to hire Americans before seeking H-1B visas.
One technology corporate client of Pearl's declined to file petitions out of a sense of patriotism. "They felt, 'How do you hire a foreigner' " with 12 percent unemployment in California, she said.
Samta Kapoor, who will complete her master's degree in engineering management at Duke University in December, said she and other foreign-born classmates have been told by prospective employers that they are not hiring international students this year. "There are times when we are not even looked at. They say, 'We are not hiring international students this year. It's a companywide policy. Sorry,' " she said.
Silicon Valley companies, where immigrants have played prominent roles in creating startups and new technology inventions, view the H-1B visa program as a way to grab the best talent from around the world. "For most of our clients, their mantra is: Hire the best person you can," Pearl added.
Companies can spend thousands of dollars per applicant. "It's such a hard process," Verdery of Intel said. "It's a laborious, difficult, expensive endeavor to bring someone on board."
Despite the challenges, Intel has continued about the same level of H-1B hiring as in the past, she said.
In recent years, there has been some support from both parties in Congress for more H-1B visas and green cards for foreign professionals, a major goal of tech companies that has been caught up in the highly charged debate over immigration.
During the dot-com boom a decade ago, the H-1B visa cap was 195,000 a year, a reflection of the frenzied hiring of tech workers in Silicon Valley and elsewhere around the nation. That number dropped dramatically during the recession that followed.
Les French, president of WashTech, a Seattle-based union for tech professionals, which is critical of the visa program, predicts application levels will eventually rise again. "Once the economy picks up, you'll see a pickup in the applications," he said. "I think it will be lock-step with the economy."
Others, though, say the difficulties faced by foreign-born potential workers as well as the recession will deter some overseas professionals from pursuing careers here.
"The problem is, you lose the cream-of-the-crop," said Vivek Wadhwa, a researcher on immigration and labor issues at the University of California-Berkeley. "The cream of the crop can get jobs elsewhere. Before, they had to come here."
Nonetheless, students such as Kapoor say the United States is still their first choice.
"There are a lot of things happening back home," said Kapoor, who is from Mumbai, India. "There would be no lack of opportunity for me if I went back. But I've been educated here. I want to give back to the United States."
Courtesy: mercurynews.com
As of last week, 46,700 H-1B visa applications had been submitted, thousands less than the 65,000 allocated for fiscal year 2010 and the lowest number since 2003. The cap for 20,000 additional H-1B visas reserved for foreign graduates of U.S. colleges with at least a master's degree was met, though applications are still being accepted.
Tech industry insiders say the recession is primarily responsible for the dearth of applications. "There is definitely a sense that there is a growing hostility toward some of the (visa) programs, but I don't think that is related to the downturn" in petitions, said Jenifer Verdery, Intel's director of work force policy. "You are not going to see big ramp-ups in hiring during the downturn."
But political pressure did affect hiring in other industries. The federal stimulus law includes provisions making it difficult for financial companies receiving money from the Troubled Asset Relief Program, or TARP, to hire H-1B workers. The requirement forced companies
like Bank of America to rescind job offers to foreign professionals.
Julie Pearl, a San Francisco-based corporate immigration lawyer who works with valley companies, says her firm's caseload for visa work has been cut in half. "In the financial industry, H-1B (applications) are down almost 75 percent," she added.
Sen. Charles Grassley has criticized tech companies for not protecting jobs of U.S. citizens over those of foreigners as they lay off thousands of employees at a clip. The Iowa Republican and Sen. Richard Durbin, an Illinois Democrat, in April reintroduced a bill that would require companies to do everything they can to hire Americans before seeking H-1B visas.
One technology corporate client of Pearl's declined to file petitions out of a sense of patriotism. "They felt, 'How do you hire a foreigner' " with 12 percent unemployment in California, she said.
Samta Kapoor, who will complete her master's degree in engineering management at Duke University in December, said she and other foreign-born classmates have been told by prospective employers that they are not hiring international students this year. "There are times when we are not even looked at. They say, 'We are not hiring international students this year. It's a companywide policy. Sorry,' " she said.
Silicon Valley companies, where immigrants have played prominent roles in creating startups and new technology inventions, view the H-1B visa program as a way to grab the best talent from around the world. "For most of our clients, their mantra is: Hire the best person you can," Pearl added.
Companies can spend thousands of dollars per applicant. "It's such a hard process," Verdery of Intel said. "It's a laborious, difficult, expensive endeavor to bring someone on board."
Despite the challenges, Intel has continued about the same level of H-1B hiring as in the past, she said.
In recent years, there has been some support from both parties in Congress for more H-1B visas and green cards for foreign professionals, a major goal of tech companies that has been caught up in the highly charged debate over immigration.
During the dot-com boom a decade ago, the H-1B visa cap was 195,000 a year, a reflection of the frenzied hiring of tech workers in Silicon Valley and elsewhere around the nation. That number dropped dramatically during the recession that followed.
Les French, president of WashTech, a Seattle-based union for tech professionals, which is critical of the visa program, predicts application levels will eventually rise again. "Once the economy picks up, you'll see a pickup in the applications," he said. "I think it will be lock-step with the economy."
Others, though, say the difficulties faced by foreign-born potential workers as well as the recession will deter some overseas professionals from pursuing careers here.
"The problem is, you lose the cream-of-the-crop," said Vivek Wadhwa, a researcher on immigration and labor issues at the University of California-Berkeley. "The cream of the crop can get jobs elsewhere. Before, they had to come here."
Nonetheless, students such as Kapoor say the United States is still their first choice.
"There are a lot of things happening back home," said Kapoor, who is from Mumbai, India. "There would be no lack of opportunity for me if I went back. But I've been educated here. I want to give back to the United States."
Courtesy: mercurynews.com
TCS
TCS scales up US Delivery Centre
Tata Consultancy Services (TCS) has announced that it has scaled up its North America Domestic Delivery Center, TCS Seven Hills Park, to 300 associates.
TCS Seven Hills Park is also the location of TCS' new North American Training Center. Over the last several months, more than 225 associates have joined the company from top universities throughout the country and completed a six weeks training program at the center as part of TCS' Initial Learning Program (ILP).
Located in the Cincinnati suburb of Milford, Ohio, the center sits on 223 acres of wooded land and includes 196 thousand square feet of office space.
Seven Hills Park provides a wide range of IT solutions, consulting, business process outsourcing and engineering services across industries including BFSI, manufacturing, retail, life science and healthcare.
Ohio Governor Ted Strickland commented: "Fostering job creation is vital to a strong economic recovery for Ohio. Companies like Tata Consultancy Services are tapping into our highly talented workforce and world class educational institutions to grow their business while providing high skilled jobs for Ohioans. This is the type of investment and long term commitment that will ensure Ohio's place as an economic leader."
N Chandrasekaran, CEO and MD of TCS, said: "The United States is by far our largest market and Seven Hills Park plays an integral role in our strategy of putting our customers first. As part of our Global Network Delivery Model(TM), Seven Hills Park helps TCS deliver on our promise of providing reliable, scalable, cost-effective delivery of IT services and solutions."
TCS Seven Hills Park is also the location of TCS' new North American Training Center. Over the last several months, more than 225 associates have joined the company from top universities throughout the country and completed a six weeks training program at the center as part of TCS' Initial Learning Program (ILP).
Located in the Cincinnati suburb of Milford, Ohio, the center sits on 223 acres of wooded land and includes 196 thousand square feet of office space.
Seven Hills Park provides a wide range of IT solutions, consulting, business process outsourcing and engineering services across industries including BFSI, manufacturing, retail, life science and healthcare.
Ohio Governor Ted Strickland commented: "Fostering job creation is vital to a strong economic recovery for Ohio. Companies like Tata Consultancy Services are tapping into our highly talented workforce and world class educational institutions to grow their business while providing high skilled jobs for Ohioans. This is the type of investment and long term commitment that will ensure Ohio's place as an economic leader."
N Chandrasekaran, CEO and MD of TCS, said: "The United States is by far our largest market and Seven Hills Park plays an integral role in our strategy of putting our customers first. As part of our Global Network Delivery Model(TM), Seven Hills Park helps TCS deliver on our promise of providing reliable, scalable, cost-effective delivery of IT services and solutions."
IT market, Outsourcing
Take on folks in Beijing & Bangalore: Obama
President Barack Obama has hit the road to push a new $4.35 billion grant programme to encourage American schools to develop internationally competitive standards to let its students take on "folks in Beijing and Bangalore."
The "Race to the Top" fund is one of the largest federal investments in school reform in US history, Obama said on a trip to Wisconsin. It is being financed with money made available through the economic stimulus plan enacted in February.
"We're putting over $4 billion on the table ... but we're not just handing it out to states because they want it," Obama told an audience at a Wisconsin public charter school making it clear that the grants will go to only those "committed to real change in the way you educate your kids."
"So, a race to the top has begun in our schools, but the real competition will begin when states apply for the actual Race to the Top grants," he said outlining four key reform measures that will be used to help determine a state's eligibility for grant money.
"The first measure is whether a state is committed to setting higher standards and better assessments that prepare our children to succeed in the 21st century," Obama said noting that 48 US states are now working to develop internationally competitive standards.
"...Internationally competitive standards because these young people are going to be growing up in an international environment where they're competing not just against kids in Chicago or Los Angeles for jobs, but they're competing against folks in Beijing and Bangalore," he said.
Second, the state will need to demonstrate a commitment to policies designed to encourage the recruitment and retention of effective teachers and principals. Conversely, teachers that fail to adequately perform need to be removed, he said.
Third, it will need to design systems to measure student success. Finally, federal officials will examine whether a state is taking steps to overhaul its lowest-performing schools.
"We'll look at whether they're willing to remake a school from top to bottom, with new leaders and a new way of teaching," Obama said. The process of doing so may include replacing a school's staff or even closing a school and sending its students to a better one nearby, he noted.
The "Race to the Top" fund is one of the largest federal investments in school reform in US history, Obama said on a trip to Wisconsin. It is being financed with money made available through the economic stimulus plan enacted in February.
"We're putting over $4 billion on the table ... but we're not just handing it out to states because they want it," Obama told an audience at a Wisconsin public charter school making it clear that the grants will go to only those "committed to real change in the way you educate your kids."
"So, a race to the top has begun in our schools, but the real competition will begin when states apply for the actual Race to the Top grants," he said outlining four key reform measures that will be used to help determine a state's eligibility for grant money.
"The first measure is whether a state is committed to setting higher standards and better assessments that prepare our children to succeed in the 21st century," Obama said noting that 48 US states are now working to develop internationally competitive standards.
"...Internationally competitive standards because these young people are going to be growing up in an international environment where they're competing not just against kids in Chicago or Los Angeles for jobs, but they're competing against folks in Beijing and Bangalore," he said.
Second, the state will need to demonstrate a commitment to policies designed to encourage the recruitment and retention of effective teachers and principals. Conversely, teachers that fail to adequately perform need to be removed, he said.
Third, it will need to design systems to measure student success. Finally, federal officials will examine whether a state is taking steps to overhaul its lowest-performing schools.
"We'll look at whether they're willing to remake a school from top to bottom, with new leaders and a new way of teaching," Obama said. The process of doing so may include replacing a school's staff or even closing a school and sending its students to a better one nearby, he noted.
IBM, IT market
US state cuts IBM contract
The US state of Texas has reportedly pulled its voter registration system out of an ongoing $863 million data center consolidation project being handled by IBM.
Texas Secretary of State's office is said to have cut the project because of data security and disaster recoverability fears.
According to the news report in ComputerWorld, the decision was prompted by an incident in August when a server being managed by IBM crashed resulting in a 13-day outage of the office's business records filing system.
The news article quotes a spokesman from the Secretary of State's office saying that the incident exposed "weaknesses" in IBM's ability to recover lost data.
As a result of the concerns expressed by the Secretary of State's office, Texas Governor Rick Perry and the state's Department of Information Resources, which is overseeing the IBM contract, gave permission for the agency to withdraw its election systems from the contract, the report said. Following its withdrawal from the IBM project, the agency will set up its own data center with two separate back-up locations.
According to the report, an IBM was performing for the Secretary of State's office shows that the project started in November 2004 and was supposed to have been completed by January 2006.
Under the contract, IBM was supposed to have helped Texas build a statewide voter registration system that would be complaint with Help America Vote Act standards.
The new system known as the Texas Election Administration Management, or TEAM, system will replace the existing Texas Voter Registration System.
Texas Secretary of State's office is said to have cut the project because of data security and disaster recoverability fears.
According to the news report in ComputerWorld, the decision was prompted by an incident in August when a server being managed by IBM crashed resulting in a 13-day outage of the office's business records filing system.
The news article quotes a spokesman from the Secretary of State's office saying that the incident exposed "weaknesses" in IBM's ability to recover lost data.
As a result of the concerns expressed by the Secretary of State's office, Texas Governor Rick Perry and the state's Department of Information Resources, which is overseeing the IBM contract, gave permission for the agency to withdraw its election systems from the contract, the report said. Following its withdrawal from the IBM project, the agency will set up its own data center with two separate back-up locations.
According to the report, an IBM was performing for the Secretary of State's office shows that the project started in November 2004 and was supposed to have been completed by January 2006.
Under the contract, IBM was supposed to have helped Texas build a statewide voter registration system that would be complaint with Help America Vote Act standards.
The new system known as the Texas Election Administration Management, or TEAM, system will replace the existing Texas Voter Registration System.
IT market
Now, know what Google knows about you
Google has opened a window for users to see what records the Internet giant keeps regarding their activities at YouTube, Gmail, Reader and other accounts.
Dashboard summarizes data kept about use of more than 20 of the California-based firm's services, according to a blog post by Google engineer Alma Whitten, product manager Yariv Adan, and vice president Marissa Mayer.
"The Dashboard summarizes data for each product that you use and provides you direct links to control your personal settings," the message said.
"The scale and level of detail of the Dashboard is unprecedented, and we're delighted to be the first Internet company to offer this and we hope it will become the standard."
Only information shared with Google while logged into accounts at its Web properties is included in Dashboard summaries.
People can change settings or delete data, which is viewable by account owners online at google.com/dashboard/.
"We are very aware of the trust that you have placed in us, and our responsibility to protect your privacy and data," Adan, Mayer, and Whitten said.
Dashboard does not include information Google records without identifying accounts of users. Data kept independent of accounts includes "server logs" with details of searches, Web browser types and computer IP addresses.
Also separated from accounts is information from snippets of code called "cookies" and search activity data used to target advertising, according to Google.
Dashboard summarizes data kept about use of more than 20 of the California-based firm's services, according to a blog post by Google engineer Alma Whitten, product manager Yariv Adan, and vice president Marissa Mayer.
"The Dashboard summarizes data for each product that you use and provides you direct links to control your personal settings," the message said.
"The scale and level of detail of the Dashboard is unprecedented, and we're delighted to be the first Internet company to offer this and we hope it will become the standard."
Only information shared with Google while logged into accounts at its Web properties is included in Dashboard summaries.
People can change settings or delete data, which is viewable by account owners online at google.com/dashboard/.
"We are very aware of the trust that you have placed in us, and our responsibility to protect your privacy and data," Adan, Mayer, and Whitten said.
Dashboard does not include information Google records without identifying accounts of users. Data kept independent of accounts includes "server logs" with details of searches, Web browser types and computer IP addresses.
Also separated from accounts is information from snippets of code called "cookies" and search activity data used to target advertising, according to Google.
HCL, IT market
Microsoft launches online services in India
Software giant Microsoft today announced the commercial availability of its online services in India at prices starting from $2 (Rs 95) per user per month which will allow small and medium enterprises (SMEs) and enterprise customers to access Microsoft’s e-mail, collaboration, conferencing and productivity capabilities online.
The services, that include Microsoft Online Services product family, offers Exchange Online (for e-mail) and Office SharePoint Online (portals and collaboration), Microsoft Exchange Hosted Services and Microsoft Office Communications Online (for instant messaging and presence), from Saturday.
“Customers can access a suite of products directly from the company website and pay a use-based monthly subscription fee and thus manage their IT needs efficiently and lower their IT spend 10-50 per cent,” said Microsoft’s Business Group President Stephen Elop while launching the services here today.
Microsoft has partnered with HCL Infosystems, Infosys and Wipro to market and offer value-added services around the Microsoft Online Services.
The services, that include Microsoft Online Services product family, offers Exchange Online (for e-mail) and Office SharePoint Online (portals and collaboration), Microsoft Exchange Hosted Services and Microsoft Office Communications Online (for instant messaging and presence), from Saturday.
“Customers can access a suite of products directly from the company website and pay a use-based monthly subscription fee and thus manage their IT needs efficiently and lower their IT spend 10-50 per cent,” said Microsoft’s Business Group President Stephen Elop while launching the services here today.
Microsoft has partnered with HCL Infosystems, Infosys and Wipro to market and offer value-added services around the Microsoft Online Services.
IT market, new openings
Thomson to expand Bangalore operations
Global information services provider Thomson Reuters will be looking at expanding the operations at its captive technology centre in Bangalore as it considers this unit strategic for its world-wide IT requirements.
Without getting into specifics of the expansion plan, James Powell, CTO, Thomson Reuters said, “We will grow over time and we see this (Bangalore) as strategic centre....There is going to be a positive momentum.”
Thomson Reuters has around 7,000 people in India of which around 2,000 are engaged in the technology operations. Mr Powell said that Bangalore is a strategic centre for them on par with its other large development centres in London and New York.
The Bangalore centre is engaged in wide variety of IT activity for Thomson Reuters, which include product management, quality assurance, content technologies among others. At the same time, Thomson Reuters has certain third party engagements with IT services vendors like Infosys Technologies.
However, the company does not see any change in the relationship with these vendors with their own expansion plans, as it is keen to do core IT work by themselves.
Mr Powell said, “I’m a big fan of using our own staff and we believe that we can offer some great opportunities for technologists here.”
Thomson Reuters which is still on the course of its merger process is expecting that the single unified unit will give them better visibility of attracting the right kind of talent. The CTO said, “We are confident of allocating work to any of the three global development centres and not necessarily looking at Bangalore as an offhsore destination.”
Thomson Reuters which provides information to both businesses and professionals to a wide variety of sectors is looking at addressing new segments in India.
Without getting into specifics of the expansion plan, James Powell, CTO, Thomson Reuters said, “We will grow over time and we see this (Bangalore) as strategic centre....There is going to be a positive momentum.”
Thomson Reuters has around 7,000 people in India of which around 2,000 are engaged in the technology operations. Mr Powell said that Bangalore is a strategic centre for them on par with its other large development centres in London and New York.
The Bangalore centre is engaged in wide variety of IT activity for Thomson Reuters, which include product management, quality assurance, content technologies among others. At the same time, Thomson Reuters has certain third party engagements with IT services vendors like Infosys Technologies.
However, the company does not see any change in the relationship with these vendors with their own expansion plans, as it is keen to do core IT work by themselves.
Mr Powell said, “I’m a big fan of using our own staff and we believe that we can offer some great opportunities for technologists here.”
Thomson Reuters which is still on the course of its merger process is expecting that the single unified unit will give them better visibility of attracting the right kind of talent. The CTO said, “We are confident of allocating work to any of the three global development centres and not necessarily looking at Bangalore as an offhsore destination.”
Thomson Reuters which provides information to both businesses and professionals to a wide variety of sectors is looking at addressing new segments in India.
Wednesday, November 4, 2009
IT market, new openings
IT's not all that hot for fresh recruits
Entry-level salaries down by 20% for software pros
Dhannanjay Kumar, a 25-year-old computer science graduate from a top engineering college in Bangalore, considers himself lucky to have found job in a year when India’s over $50-billion software outsourcing industry had to cope with falling demand and trim payroll by up to 10%.
“Not only I had to work twice as much for getting an interview, the annual salary of around Rs 1.7 lakh is much lower compared to my seniors who got Rs 3.5 lakh two years ago,” said Kumar who got hired by a Bangalore-based mid-tier software company last month.
Every year, around 3,00,000 computer science and engineering graduates seek employment with hundreds of tech firms, including big names such as TCS, Infosys and Wipro. This year, more than half of them were left unemployed because tech firms were already finding it tough to manage resources sitting on the bench.
A worsening economic crisis, increased availability of skilled workers and lower demand for software services have brought down the entry-level salaries for IT professionals in the country by up to 20%, according to experts tracking the sector.
“The entry-level salaries are down by at least 10-16%,” said GC Jayaprakash, principal consultant of Stanton Chase International.
Until two years ago, almost all computer and engineering graduates were absorbed by India’s outsourcing industry, comprising top tech firms such as TCS, Infosys, Wipro and many others. However, as customers delayed and shelved outsourcing projects, these tech firms also postponed campus hirings.
“Last year, a number of companies gave away offer letters but did not recruit. On top of that, there is a new pool of qualified professionals being churned out this year -- all this has created an oversupply in the entry-level IT job market where salaries typically sway between Rs 3 lakh per annum and Rs 5 lakh on the higher side,” Mr Jayaprakash added.
Many students had to approach potential employers directly, since companies did not visit their campuses for placements.
“We formed groups and toured companies, and agreed to settle at lower salaries because it’s better to be employed at lower salary than having no job at all,” said Srilekha Varma, who recently accepted a job offer from a Chennai-based IT firm specialising in banking software.
Recruitment firms such as GlobalHunt said the entry-level salaries may have dipped by up to 30% because of increased availability of skilled professionals.
“Earlier, companies were building bench strength and doing skill development, as they were expecting large business and didn’t want to run out of manpower. Fresh graduates used to have multiple offers and they were in a position to negotiate,” said Sunil Goel, director of GlobulHunt’s Indian operations.
In a normal year, computer science graduates were offered entry-level salaries of Rs 3.5-5 lakh. However, companies are now hiring freshers at Rs 1.7 to Rs 3.5 lakh.
Meanwhile, HR heads at tech firms, including Wipro, India’s third-largest software exporter, say professionals have become more realistic about what they want from their employers.
“I don’t think salaries have come down, but the environment has indeed helped us in containing salary hikes,” Pratik Kumar, head of human resources at Wipro said.
What has also changed this year is the manner in which salary offers are being structured.
“Due to an oversupply of qualified talent there is rationalisation at entry-level salary, which is based more on performance and are variable by nature. Cost-to-company is not necessarily a comparison of the past-drawn salary,” said Ashok Reddy, managing director and co-founder of staffing company TeamLease.
Indeed, professionals who lost their jobs during the past few months, are now being offered entry-level salaries by companies who can get experienced talent at lower salary levels.
“I was working as a software testing engineer and lost my job in February. Now I have a job, but the salary is similar to what is being offered to new recruits,” said Neelesh, who has around six-month experience.
“Companies are now preferring to hire professionals who missed jobs due to slowdown, were on the bench or were laid off, because they have some kind of training and are experience compared to freshers,” said Mr Goel.
TCS said it would do new campus hiring in January 2010 and will honour all 24,000 offers made for FY09. “Around 1,800 graduates have joined us in Q2 and another 8,000 will join in Q3, rest of the graduates will join based on the demand,” a TCS spokeswoman said.
Infosys said for FY10, it has made 20,000 campus offers and expects an 80% conversion rate i.e. 16,000 of these offers to join the company. “We are honouring all our hiring commitments,” an Infosys spokeswoman said.
“Not only I had to work twice as much for getting an interview, the annual salary of around Rs 1.7 lakh is much lower compared to my seniors who got Rs 3.5 lakh two years ago,” said Kumar who got hired by a Bangalore-based mid-tier software company last month.
Every year, around 3,00,000 computer science and engineering graduates seek employment with hundreds of tech firms, including big names such as TCS, Infosys and Wipro. This year, more than half of them were left unemployed because tech firms were already finding it tough to manage resources sitting on the bench.
A worsening economic crisis, increased availability of skilled workers and lower demand for software services have brought down the entry-level salaries for IT professionals in the country by up to 20%, according to experts tracking the sector.
“The entry-level salaries are down by at least 10-16%,” said GC Jayaprakash, principal consultant of Stanton Chase International.
Until two years ago, almost all computer and engineering graduates were absorbed by India’s outsourcing industry, comprising top tech firms such as TCS, Infosys, Wipro and many others. However, as customers delayed and shelved outsourcing projects, these tech firms also postponed campus hirings.
“Last year, a number of companies gave away offer letters but did not recruit. On top of that, there is a new pool of qualified professionals being churned out this year -- all this has created an oversupply in the entry-level IT job market where salaries typically sway between Rs 3 lakh per annum and Rs 5 lakh on the higher side,” Mr Jayaprakash added.
Many students had to approach potential employers directly, since companies did not visit their campuses for placements.
“We formed groups and toured companies, and agreed to settle at lower salaries because it’s better to be employed at lower salary than having no job at all,” said Srilekha Varma, who recently accepted a job offer from a Chennai-based IT firm specialising in banking software.
Recruitment firms such as GlobalHunt said the entry-level salaries may have dipped by up to 30% because of increased availability of skilled professionals.
“Earlier, companies were building bench strength and doing skill development, as they were expecting large business and didn’t want to run out of manpower. Fresh graduates used to have multiple offers and they were in a position to negotiate,” said Sunil Goel, director of GlobulHunt’s Indian operations.
In a normal year, computer science graduates were offered entry-level salaries of Rs 3.5-5 lakh. However, companies are now hiring freshers at Rs 1.7 to Rs 3.5 lakh.
Meanwhile, HR heads at tech firms, including Wipro, India’s third-largest software exporter, say professionals have become more realistic about what they want from their employers.
“I don’t think salaries have come down, but the environment has indeed helped us in containing salary hikes,” Pratik Kumar, head of human resources at Wipro said.
What has also changed this year is the manner in which salary offers are being structured.
“Due to an oversupply of qualified talent there is rationalisation at entry-level salary, which is based more on performance and are variable by nature. Cost-to-company is not necessarily a comparison of the past-drawn salary,” said Ashok Reddy, managing director and co-founder of staffing company TeamLease.
Indeed, professionals who lost their jobs during the past few months, are now being offered entry-level salaries by companies who can get experienced talent at lower salary levels.
“I was working as a software testing engineer and lost my job in February. Now I have a job, but the salary is similar to what is being offered to new recruits,” said Neelesh, who has around six-month experience.
“Companies are now preferring to hire professionals who missed jobs due to slowdown, were on the bench or were laid off, because they have some kind of training and are experience compared to freshers,” said Mr Goel.
TCS said it would do new campus hiring in January 2010 and will honour all 24,000 offers made for FY09. “Around 1,800 graduates have joined us in Q2 and another 8,000 will join in Q3, rest of the graduates will join based on the demand,” a TCS spokeswoman said.
Infosys said for FY10, it has made 20,000 campus offers and expects an 80% conversion rate i.e. 16,000 of these offers to join the company. “We are honouring all our hiring commitments,” an Infosys spokeswoman said.
New Deals, Outsourcing, TCS, Wipro
TCS, Wipro eye $400 mn Target outsourcing deal
India’s top tech firms Tata Consultancy Services (TCS), Wipro and several others are pursuing Target’s captive technology centre for a potential acquisition, in what could be a transaction bundled with a long-term outsourcing contract worth $300-400 million. America’s second-biggest discount retailer Target has around 1,500 staff employed at its Bangalore centre, currently doing software development and maintenance work.
“We have been in discussions with them for the past few months and the dialogue is still open,” a senior executive at one of the tech firms exploring this transaction told ET on conditions of anonymity. “There is no conclusion yet about how this transaction can be structured, and it’s very early days,” he added. Both TCS and Wipro count Target as one of their top retail customers.
Some of the world’s top retailers, including UK’s Tesco and America’s speciality retailer Home Depot, have been outsourcing projects to Indian third-party service providers, including TCS and Infosys, apart from their own captive centres in order to support their existing IT systems and also develop newer applications. Tesco, for instance, saves over $100 million every year by outsourcing its IT projects to India, and primarily drives projects from its own captive in Bangalore.
“Target’s India centre could be doing at least $100 million worth of projects (revenues) every year,” another person familiar with the retailer’s India operations told ET on conditions of anonymity. Officials at Target did not reply to an email query sent by ET. TCS, Infosys and Wipro also declined to comment. Few years ago, many retailers started with an Indian captive operation as there were not many service providers who could understand their core operations better. Target entered India in 2004 through a JV with ANSRSource, a Texas-based BPO outsourcing company.
“There is a certain equity in building up the operations (captive) initially, but over the course of time, there is the objective of monetising the operations,” said Avinash Vashistha, CEO, Tholons, an offshore advisory firm.
“Once a particular process becomes commoditised, then any adding of additional resources is not justified as it adds up to the costs.”
TCS, one of Target’s Indian suppliers, supports the retailer’s operations from its delivery centres in Uruguay and Chile, apart from India. Target, which competes with Walmart Stores, reported quarterly revenues of $14.6 billion for the second quarter ended August this year.
Over the past few months, many companies have sold their technology captives in India. 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.
“We have been in discussions with them for the past few months and the dialogue is still open,” a senior executive at one of the tech firms exploring this transaction told ET on conditions of anonymity. “There is no conclusion yet about how this transaction can be structured, and it’s very early days,” he added. Both TCS and Wipro count Target as one of their top retail customers.
Some of the world’s top retailers, including UK’s Tesco and America’s speciality retailer Home Depot, have been outsourcing projects to Indian third-party service providers, including TCS and Infosys, apart from their own captive centres in order to support their existing IT systems and also develop newer applications. Tesco, for instance, saves over $100 million every year by outsourcing its IT projects to India, and primarily drives projects from its own captive in Bangalore.
“Target’s India centre could be doing at least $100 million worth of projects (revenues) every year,” another person familiar with the retailer’s India operations told ET on conditions of anonymity. Officials at Target did not reply to an email query sent by ET. TCS, Infosys and Wipro also declined to comment. Few years ago, many retailers started with an Indian captive operation as there were not many service providers who could understand their core operations better. Target entered India in 2004 through a JV with ANSRSource, a Texas-based BPO outsourcing company.
“There is a certain equity in building up the operations (captive) initially, but over the course of time, there is the objective of monetising the operations,” said Avinash Vashistha, CEO, Tholons, an offshore advisory firm.
“Once a particular process becomes commoditised, then any adding of additional resources is not justified as it adds up to the costs.”
TCS, one of Target’s Indian suppliers, supports the retailer’s operations from its delivery centres in Uruguay and Chile, apart from India. Target, which competes with Walmart Stores, reported quarterly revenues of $14.6 billion for the second quarter ended August this year.
Over the past few months, many companies have sold their technology captives in India. 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.
New Deals, Satyam
Mahindra Satyam bags Saab deal
Mahindra Satyam on Tuesday said that it won an IT outsourcing contract from Swedish defence and aerospace firm, Saab, to develop its operations for the global defence and security market in India in a deal valued at around $300 million.
The contract, which spread over a period of five years encompasses engineering services and technology maintenance, will enable both the companies jointly address the Battlefield Management System (BMS) for the Indian Army, according to a release.
Mahindra Satyam said that it has already initiated the setting up of a centre of excellence for network centric warfare (CoE – NCW) which will offer comprehensive skills and a repository of tools, systems, middleware, integration platforms and system showcases in the field of NCW.
The company through the CoE hopes to tap the high potential market for nationwide security, for which the Indian government has large investment plans. “This relationship will jumpstart our foray in mission critical areas of defense. Our commitment in the domestic market will be reaffirmed by this collaboration and also set the stage to enter uncharted territories in the global arena,” said C P Gurnani, CEO, Mahindra Satyam.
The centre, which will be accessible to both the partners, is for mission critical applications and Command, Control, Communications, Computers, and Intelligence solutions for global opportunities. The capabilities of the centre will also span areas of homeland security to provide end to end security solutions.
“We view this relationship with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in technical and engineering excellence,” said Åke Svensson, President and CEO for Saab.
Mahindra Satyam, which counts Citigroup, GE, GlaxoSmithKline, Cisco Systems Inc and Nissan among its top five clients, has over 430 clients now. Over the last four months, the company, erstwhile Satyam Computers gained over 32 new customers including some large clients.
Satyam was acquired by Pune based IT services firm Tech Mahindra in April, after the firm’s defamed founder B Ramalinga Raju confessed to perpetrating India’s biggest corporate fraud. Customer confidence took a knock after Raju’s confession.
The company is attempting to regain contracts and enter into new strategic alliances to turn-around, even as its accounts are in the process of being re-stated.
The contract, which spread over a period of five years encompasses engineering services and technology maintenance, will enable both the companies jointly address the Battlefield Management System (BMS) for the Indian Army, according to a release.
Mahindra Satyam said that it has already initiated the setting up of a centre of excellence for network centric warfare (CoE – NCW) which will offer comprehensive skills and a repository of tools, systems, middleware, integration platforms and system showcases in the field of NCW.
The company through the CoE hopes to tap the high potential market for nationwide security, for which the Indian government has large investment plans. “This relationship will jumpstart our foray in mission critical areas of defense. Our commitment in the domestic market will be reaffirmed by this collaboration and also set the stage to enter uncharted territories in the global arena,” said C P Gurnani, CEO, Mahindra Satyam.
The centre, which will be accessible to both the partners, is for mission critical applications and Command, Control, Communications, Computers, and Intelligence solutions for global opportunities. The capabilities of the centre will also span areas of homeland security to provide end to end security solutions.
“We view this relationship with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in technical and engineering excellence,” said Åke Svensson, President and CEO for Saab.
Mahindra Satyam, which counts Citigroup, GE, GlaxoSmithKline, Cisco Systems Inc and Nissan among its top five clients, has over 430 clients now. Over the last four months, the company, erstwhile Satyam Computers gained over 32 new customers including some large clients.
Satyam was acquired by Pune based IT services firm Tech Mahindra in April, after the firm’s defamed founder B Ramalinga Raju confessed to perpetrating India’s biggest corporate fraud. Customer confidence took a knock after Raju’s confession.
The company is attempting to regain contracts and enter into new strategic alliances to turn-around, even as its accounts are in the process of being re-stated.
Layoffs in USA, Recession
Johnson & Johnson to cut 7,000 to 8,000 jobs
Johnson & Johnson will eliminate about 6 per cent to 7 per cent of its global workforce, or some 7,000 to 8,000 positions, as the diversified healthcare company restructures and seeks cost savings, the company said on Tuesday.
The company said it expects to generate annual pre-tax cost savings of $1.4 billion to $1.7 billion in 2011.
"We are announcing a series of actions and plans designed to ensure that our company remains well-positioned and appropriately structured for sustainable, long-term growth in the health care industry," J&J Chief Executive Officer William Weldon said in a statement.
J&J, which employs about 117,000 people, said it expects to record a pre-tax charge of about $1.1 billion to $1.3 billion in the fourth quarter associated with the restructuring. It backed its 2009 forecast of $4.54 to $4.59 per share, excluding special items.
Cost savings will be achieved mainly by reducing layers of management, increasing individual spans of control, and simplifying business structures and processes, the company said in a statement.
The company said it expects to generate annual pre-tax cost savings of $1.4 billion to $1.7 billion in 2011.
"We are announcing a series of actions and plans designed to ensure that our company remains well-positioned and appropriately structured for sustainable, long-term growth in the health care industry," J&J Chief Executive Officer William Weldon said in a statement.
J&J, which employs about 117,000 people, said it expects to record a pre-tax charge of about $1.1 billion to $1.3 billion in the fourth quarter associated with the restructuring. It backed its 2009 forecast of $4.54 to $4.59 per share, excluding special items.
Cost savings will be achieved mainly by reducing layers of management, increasing individual spans of control, and simplifying business structures and processes, the company said in a statement.
Layoffs in USA, Recession
Nokia Siemens to cut thousands of jobs: Company
Finnish-German telecom equipment maker Nokia Siemens said on Tuesday that it could reduce its 64,000-strong workforce by seven to nine percent, or by 4,500 to 5,800 jobs, in a cost-cutting drive.
The cost-cutting is to "improve financial performance and return to growth" by reducing 500 million euros (732 million dollars) in annualised operating expenses and production overheads by 2011, the company said.
"As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees," it added.
Nokia, the world's biggest mobile phone maker, last month reported its first quarterly loss in a decade partly due to a 908-million-euro impairment charge for goodwill in the Nokia Siemens joint venture.
The cost-cutting is to "improve financial performance and return to growth" by reducing 500 million euros (732 million dollars) in annualised operating expenses and production overheads by 2011, the company said.
"As part of this effort, the company will also conduct a global personnel review which may lead to headcount reductions in the range of about 7-9 percent of its current approximately 64,000 employees," it added.
Nokia, the world's biggest mobile phone maker, last month reported its first quarterly loss in a decade partly due to a 908-million-euro impairment charge for goodwill in the Nokia Siemens joint venture.
NRIs
HSBC bank says it will cut 1,700 jobs in Britain
HSBC is to cut more than 1,700 jobs across Britain, a spokesman for the global banking group said on Tuesday.
HSBC will axe "just over 1,700" jobs, a spokesman told media, confirming media reports. An official statement from HSBC explaining the cuts was due later Tuesday.
The announcement came as the British government unveiled a major shake-up of the country's banking sector and one day after state-controlled Royal Bank of Scotland (RBS) said it would eliminate about 3,700 jobs across its British retail operations.
The government on Tuesday said it would force RBS and another state-controlled bank, Lloyds Banking Group, to sell assets to promote competition but would support them with 30 billion pounds (33 billion euros, 49 billion dollars).
Britain's government expects new banks to be born as a result of the break-ups, which are the result of pressure from EU competition authorities.
The parts being separated from the parent groups add up to about 10 percent of Britain's troubled retail banking market.
In return for more state aid, RBS and Lloyds will have to cut bonuses paid to top staff and increase lending to recession-struck businesses and individuals.
Lloyds meanwhile announced that it would launch a record 13.5-billion-pound rights issue, the biggest-ever sale in Britain of new shares to existing shareholders.
Tuesday's announcements come one week after the European Commission approved the state aid in plans to break up and sell Britain's nationalised bank Northern Rock.
HSBC will axe "just over 1,700" jobs, a spokesman told media, confirming media reports. An official statement from HSBC explaining the cuts was due later Tuesday.
The announcement came as the British government unveiled a major shake-up of the country's banking sector and one day after state-controlled Royal Bank of Scotland (RBS) said it would eliminate about 3,700 jobs across its British retail operations.
The government on Tuesday said it would force RBS and another state-controlled bank, Lloyds Banking Group, to sell assets to promote competition but would support them with 30 billion pounds (33 billion euros, 49 billion dollars).
Britain's government expects new banks to be born as a result of the break-ups, which are the result of pressure from EU competition authorities.
The parts being separated from the parent groups add up to about 10 percent of Britain's troubled retail banking market.
In return for more state aid, RBS and Lloyds will have to cut bonuses paid to top staff and increase lending to recession-struck businesses and individuals.
Lloyds meanwhile announced that it would launch a record 13.5-billion-pound rights issue, the biggest-ever sale in Britain of new shares to existing shareholders.
Tuesday's announcements come one week after the European Commission approved the state aid in plans to break up and sell Britain's nationalised bank Northern Rock.
new openings
Apple hires 2,300 full-time employees in a year
Technology major Apple has raised its full-time employee count by 2,300 to 34,300 for the year ended September 2009, at a time when many companies worldwide slashed their workforce in the wake of the financial crisis.
For the September 2009 financial year, the company had nearly 34,300 full-time equivalent employees and 2,500 temporary equivalent workers and contractors, according to its annual report.
The firm had about 32,000 full-time people and 3,100 temporary employees and contractors, for the year ended September 2008.
The total head count at Apple -- including full-time and temporary people and contractors -- shot up to 36,800 for the fiscal year ended September 26, 2009. In the comparable period, the same stood at 35,100.
Interestingly, the year ended September was also the time when companies worldwide slashed thousands of jobs as part of their efforts to bring down costs. The entities which resorted to layoffs include Dell, Microsoft, General Motors and Caterpillar.
Moreover, the unemployment rate in the US touched a 26-year-high of 9.8 per cent in September.
Despite the adverse economic situation, Apple's net sales surged over 12 per cent to $36.5 billion for the year ended September 2009, mainly boosted by increased sales of iPhone and Mac computers. During the same period, profits rose to $5.7 billion.
For the September 2009 financial year, the company had nearly 34,300 full-time equivalent employees and 2,500 temporary equivalent workers and contractors, according to its annual report.
The firm had about 32,000 full-time people and 3,100 temporary employees and contractors, for the year ended September 2008.
The total head count at Apple -- including full-time and temporary people and contractors -- shot up to 36,800 for the fiscal year ended September 26, 2009. In the comparable period, the same stood at 35,100.
Interestingly, the year ended September was also the time when companies worldwide slashed thousands of jobs as part of their efforts to bring down costs. The entities which resorted to layoffs include Dell, Microsoft, General Motors and Caterpillar.
Moreover, the unemployment rate in the US touched a 26-year-high of 9.8 per cent in September.
Despite the adverse economic situation, Apple's net sales surged over 12 per cent to $36.5 billion for the year ended September 2009, mainly boosted by increased sales of iPhone and Mac computers. During the same period, profits rose to $5.7 billion.
IT market, new openings
Capgemini to expand India headcount
Outsourcing firm Capgemini is all set to increase its India headcount with the opening of a new business information centre in Bangalore, according to a report in a business daily.
The Bangalore centre will take the company's India headcount beyond 21,000, an increase from its employee strength of 20,000 in home country France.
According to the company, the new centre in Bangalore would start with a workforce of 1,000, which would scale up to 3,000 in about 18 months.
Paul Nannetti, general manager of Capgemini's global business information service line, said, "Bangalore provides plenty of application and technical skills in information management." He added, "The company can scale-up there much more quickly than in onshore locations."
India is among the most attractive outsourcing destination for global MNCs including IBM, Accenture and Microsoft, giving tough competition to domestic players TCS, Wipro and Infosys. The country offers large pool of skilled and low-cost talent for business information management services that help companies improve their collection, use and analysis of data.
The Bangalore centre will take the company's India headcount beyond 21,000, an increase from its employee strength of 20,000 in home country France.
According to the company, the new centre in Bangalore would start with a workforce of 1,000, which would scale up to 3,000 in about 18 months.
Paul Nannetti, general manager of Capgemini's global business information service line, said, "Bangalore provides plenty of application and technical skills in information management." He added, "The company can scale-up there much more quickly than in onshore locations."
India is among the most attractive outsourcing destination for global MNCs including IBM, Accenture and Microsoft, giving tough competition to domestic players TCS, Wipro and Infosys. The country offers large pool of skilled and low-cost talent for business information management services that help companies improve their collection, use and analysis of data.
New Deals, Outsourcing, TCS
TCS bags multi-million Cardiff deal
India's Tata Consultancy Services' contract with Cardiff City Council for technology services is a multi-million dollar deal that will run over 15 years, a company source said on Tuesday.
Under the deal signed last week, Tata Consultancy will provide a host of IT services for faster and efficient delivery of services in Cardiff.
Tata Consultancy and its rivals such as Infosys Technologies and Wipro are aggressively vying for deals in markets such as Europe and Asia Pacific to cut their dependence on the US, which brings in more than half the sector's revenue.
According to Ovum's Straight Talk service, the deal is reportedly worth £150 million, spanning 15-years.
Under the deal, TCS will help drive the council's mission-critical Strategic Transformational Change Programme.
Tata Consultancy, a part of the diversified Tata Group that spans commodities autos and services businesses, last month beat forecasts with a 29 percent rise in quarterly net profit helped by demand from recession-hit financial customers.
Under the deal signed last week, Tata Consultancy will provide a host of IT services for faster and efficient delivery of services in Cardiff.
Tata Consultancy and its rivals such as Infosys Technologies and Wipro are aggressively vying for deals in markets such as Europe and Asia Pacific to cut their dependence on the US, which brings in more than half the sector's revenue.
According to Ovum's Straight Talk service, the deal is reportedly worth £150 million, spanning 15-years.
Under the deal, TCS will help drive the council's mission-critical Strategic Transformational Change Programme.
Tata Consultancy, a part of the diversified Tata Group that spans commodities autos and services businesses, last month beat forecasts with a 29 percent rise in quarterly net profit helped by demand from recession-hit financial customers.
IT market, Recession
IT spending won't fully recover: Microsoft CEO
Microsoft CEO Steve Ballmer said that corporate spending on information technology (IT) will not recover to levels seen in recent years before the global economic slowdown.
"The economy went thru a set of changes on a global basis over the course of the last year which are, I think is fair to say, once in a lifetime," said Ballmer.
Spending on information technology, which accounted for about half of capital expenditures in developed countries before the crisis, was unlikely to rebound fully because capital was scarcer these days, he said.
"While we will see growth, we will not see recovery," he said. Ballmer was in Seoul to tout Microsoft's new Windows 7 operating system. The latest edition of Windows, the software that runs personal computers, was released last month.
He said company purchases of PCs and servers were down about 15 per cent globally.
"It reflects the fact that CEOs have much more tightly constrained IT budgets," he added.
"The economy went thru a set of changes on a global basis over the course of the last year which are, I think is fair to say, once in a lifetime," said Ballmer.
Spending on information technology, which accounted for about half of capital expenditures in developed countries before the crisis, was unlikely to rebound fully because capital was scarcer these days, he said.
"While we will see growth, we will not see recovery," he said. Ballmer was in Seoul to tout Microsoft's new Windows 7 operating system. The latest edition of Windows, the software that runs personal computers, was released last month.
He said company purchases of PCs and servers were down about 15 per cent globally.
"It reflects the fact that CEOs have much more tightly constrained IT budgets," he added.
IT market, new openings
ACIS foresees 100% growth in headcount
Being in the insurance-financial services domain may not be the most attractive situation during the current downturn, but Alliance Cornhill Information Services (ACIS), a wholly-owned subsidiary of UK-based Allianz Insurance, is foreseeing a 100% growth in its headcount at its operations out of the Technopark here.
ACIS, which has grown from being an IT/ITeS operation employing about two dozen employees in 2004 has grown to being a 700-staff organisation doing high-end value-added services for the Allianz group, and has added a new facility here, hoping to reach a headcount of 1,400 in the near future.
The company opened its third facility at the Technopark today, which adds 40,000 sq ft and 250 seats in the first phase of the new facility. The ACIS centre here is a one-of-its-kind facility for the Allianz group, doing captive work for the parent company and operating units within the Allianz group.
“ACIS has been working with five other operating units within the Allianz group over the past one year, and looks poised to expand to make full use of its capacity of 1,400 seats at the Technopark”, Andrew Torrance, CEO of Allianz Insurance, UK told ET.
He said some of the new projects that ACIS had added in the recent past included a project to supply certain insurance products to customers, another that is meant for the insurance broker base, a project that involves revamp of the retail platform, one relating to legal protection insurance, and a claims operation project.
ACIS COO Rakesh Gupta said the immediate future looked bright for the company in the backdrop of the pressure on businesses to achieve cost efficiencies, adding that ACIS was offering the right value proposition to attract fresh business.
Mr Torrance said Allianz Insurance was not, at the moment, looking to set up another unit on the lines of ACIS anywhere else in the world, adding that the expansion here would be able to take care of additional work for the near term. Mr Gupta said ACIS had the option of expanding by adding more space within the Technopark or outside of it should the need arise to up its headcount beyond 1,400.
ACIS, which has grown from being an IT/ITeS operation employing about two dozen employees in 2004 has grown to being a 700-staff organisation doing high-end value-added services for the Allianz group, and has added a new facility here, hoping to reach a headcount of 1,400 in the near future.
The company opened its third facility at the Technopark today, which adds 40,000 sq ft and 250 seats in the first phase of the new facility. The ACIS centre here is a one-of-its-kind facility for the Allianz group, doing captive work for the parent company and operating units within the Allianz group.
“ACIS has been working with five other operating units within the Allianz group over the past one year, and looks poised to expand to make full use of its capacity of 1,400 seats at the Technopark”, Andrew Torrance, CEO of Allianz Insurance, UK told ET.
He said some of the new projects that ACIS had added in the recent past included a project to supply certain insurance products to customers, another that is meant for the insurance broker base, a project that involves revamp of the retail platform, one relating to legal protection insurance, and a claims operation project.
ACIS COO Rakesh Gupta said the immediate future looked bright for the company in the backdrop of the pressure on businesses to achieve cost efficiencies, adding that ACIS was offering the right value proposition to attract fresh business.
Mr Torrance said Allianz Insurance was not, at the moment, looking to set up another unit on the lines of ACIS anywhere else in the world, adding that the expansion here would be able to take care of additional work for the near term. Mr Gupta said ACIS had the option of expanding by adding more space within the Technopark or outside of it should the need arise to up its headcount beyond 1,400.
Tuesday, November 3, 2009
IT market
Google tops best employer lists
Internet search giant Google has emerged as the most sought after company for business as well as engineering graduates, according to two surveys, which term the company as the world’s “most attractive employer” followed closely by rival, Microsoft.
According to the surveys compiled by global employer branding firm Universum, Google has been ranked at the top spot in the list of top 50 global businesses and engineering companies.
About Google, the survey said, “Google’s number one position is no surprise. Due to its remarkable brand image, students worldwide see it as a company they would like to work for.” The internet search giant is followed by Pricewaterhouse where most business schools students want to work, while engineering graduates preferred Microsoft as their second choice.
“The employers that feature in top 50 all have one thing in common: they successfully appeal to current and future talent, and they are aware of how scarce talent is,” Universum said.
Soft drink major Coca-Cola has been placed at the 13th position, while Citigroup has cornered the 21st place for itself among the list for business students. However, irrespective of ranks, the top 50 global employers for business and engineering students are very similar, showing strong employer brands transcend many skill and industry groups.
Conversely, Oracle and Philip Morris make it to the top 50 for business students, but not for engineering students. GlaxoSmithKline and Alcatel-Lucent appear only in the engineering rankings. Despite it being one of the toughest years for car manufactures, BMW and Daimler appear in the global top 50 ranking in both lists. The global rankings based on the survey of about 1,20,000 students highlights the world’s most powerful employer brands and those that are “successful in talent attraction and retention.”
Students from the US, Japan, China, Germany, France, the UK, Italy, Russia, Spain, Canada and India took part in the survey.
According to the surveys compiled by global employer branding firm Universum, Google has been ranked at the top spot in the list of top 50 global businesses and engineering companies.
About Google, the survey said, “Google’s number one position is no surprise. Due to its remarkable brand image, students worldwide see it as a company they would like to work for.” The internet search giant is followed by Pricewaterhouse where most business schools students want to work, while engineering graduates preferred Microsoft as their second choice.
“The employers that feature in top 50 all have one thing in common: they successfully appeal to current and future talent, and they are aware of how scarce talent is,” Universum said.
Soft drink major Coca-Cola has been placed at the 13th position, while Citigroup has cornered the 21st place for itself among the list for business students. However, irrespective of ranks, the top 50 global employers for business and engineering students are very similar, showing strong employer brands transcend many skill and industry groups.
Conversely, Oracle and Philip Morris make it to the top 50 for business students, but not for engineering students. GlaxoSmithKline and Alcatel-Lucent appear only in the engineering rankings. Despite it being one of the toughest years for car manufactures, BMW and Daimler appear in the global top 50 ranking in both lists. The global rankings based on the survey of about 1,20,000 students highlights the world’s most powerful employer brands and those that are “successful in talent attraction and retention.”
Students from the US, Japan, China, Germany, France, the UK, Italy, Russia, Spain, Canada and India took part in the survey.
IT market, New Deals, Outsourcing
Mid-tier tech cos eye $2 bn local deals
With larger rivals already chasing the lucrative domestic market, mid-tier tech firms such as Patni Computer Systems and Hexaware are attempting to enter the market by jointly bidding with experienced bidders. India’s government departments and other state-owned firms are set to spend around $2 billion on IT during the next 12 months. Hexaware, MindTree and Patni are among the many mid-tier Indian tech firms seeking to explore new business with an experienced partner.
Hexaware, for instance, is pursuing 2-3 large deals as part of a consortium and several smaller ones on its own. The company’s strategy for the Indian market will be different from its strategy for overseas markets, said Hexaware’s vice-chairman and chief executive officer, PR Chandrasekar.
“If we treat India as just another location for our services, it will not work. It will need fairly dedicated focus and some innovation on how we source talent and price our offerings. You also need to leverage your niche capabilities, especially if you are not one of the big players,” said Mr Chandrasekar, who was earlier with Wipro, India’s third-biggest IT company.
In order to focus better on the Indian market, companies such as Hexaware and Patni have recently formed focused business units. While Narendra Upasani heads Hexaware’s India business, Deepak Khosla is responsible for growing Patni’s revenues from the country.
For large contracts in the government and public sector, Hexaware will work as part of a consortium because these projects usually require the bidder to have a prior track record in executing similar projects.
Experts such as Guru Malladi, partner at Ernst & Young said it will be challenging for mid-tier tech firms to take on bigger rivals. “A Rs 5,000-crore project, for example, can never be delivered by a single player. But I do see an element of challenge for mid-size players who have so far not operated in the domestic market. Large players have to sometimes rely on small players but they may not see value in mid-size players in terms of cost or efficiency arbitrage,” said Mr Malladi.
“Globally, this kind of scale is not available anywhere, even if it may not be the largest in revenues,” pointed out Jeya Kumar, CEO, Patni Computer.
Like Hexaware, Patni is chasing 3-4 contracts in the domestic market as part of a consortium. “With the kind of large deal sizes we are seeing, you have to have a multi-vendor strategy,” added Mr Kumar. Apart from the government, Hexaware will focus on sectors such as travel and transport, insurance, hospitality and logistics, and technology offerings across sectors.
According to Mr Malladi, mid-size players have to be more strategic in their outlook using their niche skills to enter the market. Hexaware, along with others like Patni and Mindtree are turning towards India, drawn by the large opportunity and significant growth potential.
Hexaware, for instance, is pursuing 2-3 large deals as part of a consortium and several smaller ones on its own. The company’s strategy for the Indian market will be different from its strategy for overseas markets, said Hexaware’s vice-chairman and chief executive officer, PR Chandrasekar.
“If we treat India as just another location for our services, it will not work. It will need fairly dedicated focus and some innovation on how we source talent and price our offerings. You also need to leverage your niche capabilities, especially if you are not one of the big players,” said Mr Chandrasekar, who was earlier with Wipro, India’s third-biggest IT company.
In order to focus better on the Indian market, companies such as Hexaware and Patni have recently formed focused business units. While Narendra Upasani heads Hexaware’s India business, Deepak Khosla is responsible for growing Patni’s revenues from the country.
For large contracts in the government and public sector, Hexaware will work as part of a consortium because these projects usually require the bidder to have a prior track record in executing similar projects.
Experts such as Guru Malladi, partner at Ernst & Young said it will be challenging for mid-tier tech firms to take on bigger rivals. “A Rs 5,000-crore project, for example, can never be delivered by a single player. But I do see an element of challenge for mid-size players who have so far not operated in the domestic market. Large players have to sometimes rely on small players but they may not see value in mid-size players in terms of cost or efficiency arbitrage,” said Mr Malladi.
“Globally, this kind of scale is not available anywhere, even if it may not be the largest in revenues,” pointed out Jeya Kumar, CEO, Patni Computer.
Like Hexaware, Patni is chasing 3-4 contracts in the domestic market as part of a consortium. “With the kind of large deal sizes we are seeing, you have to have a multi-vendor strategy,” added Mr Kumar. Apart from the government, Hexaware will focus on sectors such as travel and transport, insurance, hospitality and logistics, and technology offerings across sectors.
According to Mr Malladi, mid-size players have to be more strategic in their outlook using their niche skills to enter the market. Hexaware, along with others like Patni and Mindtree are turning towards India, drawn by the large opportunity and significant growth potential.
IT market, Outsourcing
China planning to build 'Little India' to attract outsourcing industry
Wuxi, a picturesque city that lies along the Taihu Lake resort of the Jiangsu province, is planning to build a "little India" in years to come in order to become a major service outsourcing center.
Wuxi is traditionally a manufacturing city, but with a focus on environmental protection, and especially after a serious blue-green algae outbreak in Taihu Lake, city leaders started to study how to transform the city's development.
Wuxi decided to replace manufacturing with the service outsourcing industry, which has far less pollution and consumes much less energy, the China Daily reports.
The city is expected to attract 30 to 40 billion dollars in service outsourcing business and help create jobs for one million people by 2020, equivalent to that of India as a whole in 2007. The advancement of the service outsourcing industry cannot survive without a large talent pool. But the city three years ago learned that fewer than 2,000 students in the city were studying software and information technology fields.
As a result, Wuxi established a goal to build a total area of six million sq m for software service outsourcing within three years, and encouraged enterprises to cultivate and import skilled workers.
The local government joined India's National Institute of Information Technologies (NIIT), the world's second-largest educational institution, to establish the NIIT (China) Outsourcing College in Wuxi as a training base for the city's outsourcing businesses.
While the domestic macro-economy continues to be affected by the global financial crisis, outsourcing is maintaining robust growth in Wuxi.
The city signed 1.14 billion dollars in contracts from January to July, up 110 percent year-on-year.
After India became world's largest service-outsourcing base, many East Asian countries including Philippines, Singapore and Vietnam began competing for more market share.
Wuxi is traditionally a manufacturing city, but with a focus on environmental protection, and especially after a serious blue-green algae outbreak in Taihu Lake, city leaders started to study how to transform the city's development.
Wuxi decided to replace manufacturing with the service outsourcing industry, which has far less pollution and consumes much less energy, the China Daily reports.
The city is expected to attract 30 to 40 billion dollars in service outsourcing business and help create jobs for one million people by 2020, equivalent to that of India as a whole in 2007. The advancement of the service outsourcing industry cannot survive without a large talent pool. But the city three years ago learned that fewer than 2,000 students in the city were studying software and information technology fields.
As a result, Wuxi established a goal to build a total area of six million sq m for software service outsourcing within three years, and encouraged enterprises to cultivate and import skilled workers.
The local government joined India's National Institute of Information Technologies (NIIT), the world's second-largest educational institution, to establish the NIIT (China) Outsourcing College in Wuxi as a training base for the city's outsourcing businesses.
While the domestic macro-economy continues to be affected by the global financial crisis, outsourcing is maintaining robust growth in Wuxi.
The city signed 1.14 billion dollars in contracts from January to July, up 110 percent year-on-year.
After India became world's largest service-outsourcing base, many East Asian countries including Philippines, Singapore and Vietnam began competing for more market share.
IT market
Net gets a desi flavour with Web names in Indian languages
Imagine accessing Internet in your mother tongue. It is possible now with the international body, which manages domain names allowing use of seven Indian languages in Web addresses.
The Internet Corporation for Assigned Names and Numbers (ICANN), a global non-profit organisation, has taken the decision to allow Web addresses in Hindi, Tamil, Urdu, Bengali, Gujarati, Punjabi and Telegu. The decision was taken in Seoul, where a conference of ICANN was going on.
Till now, on the Web all domain names were available only in Latin characters from “A to Z”. Domain names -.com, .net, .org, .in - are used as identification labels.
Now, users can type Web addresses in Hindi, Tamil, Urdu, Bengali, Gujarati, Punjabi and Telegu.
Govind, Senior Director, who was representing the Department of Information Technology (DIT), said “this will be a revolutionary move on the World Wide Web (www) that would dignify the presence of Indian vernacular languages on Internet.”
He further confirmed that more languages would be added in the near future. DIT has started giving free fonts in 22 official Indian languages.
The Internet Corporation for Assigned Names and Numbers (ICANN), a global non-profit organisation, has taken the decision to allow Web addresses in Hindi, Tamil, Urdu, Bengali, Gujarati, Punjabi and Telegu. The decision was taken in Seoul, where a conference of ICANN was going on.
Till now, on the Web all domain names were available only in Latin characters from “A to Z”. Domain names -.com, .net, .org, .in - are used as identification labels.
Now, users can type Web addresses in Hindi, Tamil, Urdu, Bengali, Gujarati, Punjabi and Telegu.
Govind, Senior Director, who was representing the Department of Information Technology (DIT), said “this will be a revolutionary move on the World Wide Web (www) that would dignify the presence of Indian vernacular languages on Internet.”
He further confirmed that more languages would be added in the near future. DIT has started giving free fonts in 22 official Indian languages.
Monday, November 2, 2009
IT market, Outsourcing
Shifting staff offshore better than rate cuts: Forrester
Firms’ ability to shift more staff offshore drives more savings than the 5 per cent to 10 per cent rate reductions they have been seeking from their IT vendors, according to the latest Forrester report on IT offshoring.
The report notes that more and more firms are now looking to shift away from the traditional offshore pricing approach of an hourly rate to a fixed price model.
The Forrester report titled “Assessing your onshore/offshore staffing ratios” by its vice president and principal analyst John McCarthy, states that the economic downturn has hit IT budgets full force, and as a result, firms are scrambling to react and optimise their offshore spend.
“Our recent Enterprise IT Services Survey (North America & Europe, Q2 2009) shows that renegotiating IT services rates is the top priority of these firms. 80 per cent of the 931 respondents list it as their critical priority. And on an average, we see clients getting actual reductions in the range of 4 per cent to 7 per cent based on current rates, type of work, and volume of spend” says McCarthy.
The report advises such firms to move beyond short term strategies and invest in better specifications and change management processes, which will enable them to move more work offshore and recognise the associated savings.
Forrester notes that clients move through four distinct stages in their offshore maturity namely Bystanders, Experimenters, Committeds, and Full Exploiters.
During this evolution, clients not only build up trust with their IT vendors, but more importantly for the offshore mix, they also mature and add more rigor to their specifications, incident management, and governance processes.
“This improved process acumen on the part of the client, coupled with the domain and tool investments of IT vendors, has increased the amount of work that can be sent offshore by 10 per cent to 20 per cent over the past three years,” says McCarthy.
After the rate renegotiation, the second primary strategy firms are adopting in the short term is transition to fixed price model from time and materials (T&M) pricing model.
“They want the certainty of a fixed price,” notes the report. The report also reveals that the budget crunch has encouraged firms to look at more than just rates.
“Over the past four to six months, we have seen a dramatic rise in the number of inquiries related to IT services governance best practices, specifically around the most cost-effective mix of onshore and offshore staff from IT suppliers. And our research demonstrates that adjusting Onshore/Offshore ratios is the best way to increase savings,” adds McCarthy.
The report notes that more and more firms are now looking to shift away from the traditional offshore pricing approach of an hourly rate to a fixed price model.
The Forrester report titled “Assessing your onshore/offshore staffing ratios” by its vice president and principal analyst John McCarthy, states that the economic downturn has hit IT budgets full force, and as a result, firms are scrambling to react and optimise their offshore spend.
“Our recent Enterprise IT Services Survey (North America & Europe, Q2 2009) shows that renegotiating IT services rates is the top priority of these firms. 80 per cent of the 931 respondents list it as their critical priority. And on an average, we see clients getting actual reductions in the range of 4 per cent to 7 per cent based on current rates, type of work, and volume of spend” says McCarthy.
The report advises such firms to move beyond short term strategies and invest in better specifications and change management processes, which will enable them to move more work offshore and recognise the associated savings.
Forrester notes that clients move through four distinct stages in their offshore maturity namely Bystanders, Experimenters, Committeds, and Full Exploiters.
During this evolution, clients not only build up trust with their IT vendors, but more importantly for the offshore mix, they also mature and add more rigor to their specifications, incident management, and governance processes.
“This improved process acumen on the part of the client, coupled with the domain and tool investments of IT vendors, has increased the amount of work that can be sent offshore by 10 per cent to 20 per cent over the past three years,” says McCarthy.
After the rate renegotiation, the second primary strategy firms are adopting in the short term is transition to fixed price model from time and materials (T&M) pricing model.
“They want the certainty of a fixed price,” notes the report. The report also reveals that the budget crunch has encouraged firms to look at more than just rates.
“Over the past four to six months, we have seen a dramatic rise in the number of inquiries related to IT services governance best practices, specifically around the most cost-effective mix of onshore and offshore staff from IT suppliers. And our research demonstrates that adjusting Onshore/Offshore ratios is the best way to increase savings,” adds McCarthy.
IT market
Patni net down 6.5%
Patni Computer Systems posted a net income (India GAAP) of Rs 168.5 crore for the third quarter ended September 30, down 6.5 per cent from Rs 180.2 crore in the corresponding quarter in the previous financial year. Revenue for the quarter at Rs 833.7 crore (including other income) dipped 1.5 per cent from Rs 846.7 crore in the same quarter last year. Excluding Other Income, revenue grew marginally by 0.3 per cent.
For the fourth quarter, the company expects revenue to be at $168-169 million and net income (excluding the hedge gain/loss) in the range of $24-25 million. The guidance is based on constant rupee-dollar rate of Rs 46.5, constant pound–dollar rate of 1.65 and euro-dollar rate of 1.40.
For the fourth quarter, the company expects revenue to be at $168-169 million and net income (excluding the hedge gain/loss) in the range of $24-25 million. The guidance is based on constant rupee-dollar rate of Rs 46.5, constant pound–dollar rate of 1.65 and euro-dollar rate of 1.40.
BPO, Infosys
Infosys BPO to open delivery centre in US
Infosys BPO will set up a new delivery centre in the United States before the end of this financial year.
The $300 million back-office services wing of Infosys has eight delivery centres across the globe, including in Mexico, but it did not have a center in the US so far. Swaminathan Dandapani, senior vice-president and head of global service delivery, told Financial Chronicle that the US delivery centre was the next logical step.
North American clients account for 62 per cent of the BPO’s export revenues, while the European clientele accounts for 26 per cent. Dandapani said the US will be a key market as the economy has been improving and outsourcing again. The US centre will be followed by more delivery centres in the UK and rest of Europe as the outsourcing scene continues to improve.
“All customers are looking to keep the costs down as they have done over the past year. Hence, outsourcing has continued to be a priority,” he said. The recession has significantly helped Indian outsourcing organisations as customers turn to low-cost suppliers to cut costs.
Infosys BPO will also be hiring to fill up these delivery centres, although it was not immediately known how many will be recruited. The BPO has 17,500 people on its rolls, with 3,000 employees outside India.
Indian outsourcing outfits were under huge stress when US president Barack Obama said that there will be no tax breaks for American companies that would ship jobs abroad.
But that cloud seems to have blown over. And now, with companies like Infosys BPO opening centres in the US, local employment would be created driving out fears of outsourcing.
Infosys BPO registered revenues of $71.3 million with a net profit of $16.3 million for the September quarter. It plans to hire 3,000 to 3,500 people during the current financial year. The company will continue to hire at the entry level which constitutes 80-85 per cent of our total employee base.
The $300 million back-office services wing of Infosys has eight delivery centres across the globe, including in Mexico, but it did not have a center in the US so far. Swaminathan Dandapani, senior vice-president and head of global service delivery, told Financial Chronicle that the US delivery centre was the next logical step.
North American clients account for 62 per cent of the BPO’s export revenues, while the European clientele accounts for 26 per cent. Dandapani said the US will be a key market as the economy has been improving and outsourcing again. The US centre will be followed by more delivery centres in the UK and rest of Europe as the outsourcing scene continues to improve.
“All customers are looking to keep the costs down as they have done over the past year. Hence, outsourcing has continued to be a priority,” he said. The recession has significantly helped Indian outsourcing organisations as customers turn to low-cost suppliers to cut costs.
Infosys BPO will also be hiring to fill up these delivery centres, although it was not immediately known how many will be recruited. The BPO has 17,500 people on its rolls, with 3,000 employees outside India.
Indian outsourcing outfits were under huge stress when US president Barack Obama said that there will be no tax breaks for American companies that would ship jobs abroad.
But that cloud seems to have blown over. And now, with companies like Infosys BPO opening centres in the US, local employment would be created driving out fears of outsourcing.
Infosys BPO registered revenues of $71.3 million with a net profit of $16.3 million for the September quarter. It plans to hire 3,000 to 3,500 people during the current financial year. The company will continue to hire at the entry level which constitutes 80-85 per cent of our total employee base.
IT market
Google unveils new look for Orkut
Social networking site Orkut has revamped its look and added a host of new features as it tries to regain ground from one of its toughest competitor Facebook.
Google, which owns Orkut, said the new look has a user interface, or homepage, which is faster and easier to use.
"With the new user interface (UI), the user does not have to visit each page for viewing videos, or say posting scraps. He gets to see all updates and respond to his friends from the homepage itself," Google India Head (Products) Vinay Goel today said.
It also allows faster uploading of photos and has features like video chat, automatic face detection and a scroll down menu for viewing all friends on the same page.
"We have about 80-100 million users globally and India is the second leading market for Orkut after Brazil. India is a crucial market and we would continue to drive innovation for all our products," Goel said.
The new version would be initially available through invitation only but after a few weeks would be made available to all users. Companies, mainly in the FMCG, automobile, consumer durables and telecom space, are actively using social networking sites to connect with the youth.
Google, which owns Orkut, said the new look has a user interface, or homepage, which is faster and easier to use.
"With the new user interface (UI), the user does not have to visit each page for viewing videos, or say posting scraps. He gets to see all updates and respond to his friends from the homepage itself," Google India Head (Products) Vinay Goel today said.
It also allows faster uploading of photos and has features like video chat, automatic face detection and a scroll down menu for viewing all friends on the same page.
"We have about 80-100 million users globally and India is the second leading market for Orkut after Brazil. India is a crucial market and we would continue to drive innovation for all our products," Goel said.
The new version would be initially available through invitation only but after a few weeks would be made available to all users. Companies, mainly in the FMCG, automobile, consumer durables and telecom space, are actively using social networking sites to connect with the youth.
IT market
Retaining talent troubles US employers
As the economy shows signs of recovery, majority of American companies are turning their focus to attract and retain top talent, a report says.
According to the survey of 201 US employers by HR consulting Watson Wyatt, about 65 per cent of them are more concerned about the retention of top-performing employees than they were before the economic crisis hit.
Looking ahead three to five years, half (50 per cent) of the employers expect an increase in difficulty in attracting critical-skill employees, and 55 per cent expect an increase in difficulty in retaining talent.
The survey revealed that 44 per cent of employers have encouraged managers to make greater use of recognition plans. However, only 8 per cent of these employers have seen managers actually increase their use of these plans to a significant or great extent. “However, recognition programmes that keep employees engaged and motivated can create a key competitive advantage,” Watson Wyatt strategic rewards leader (US) Laurie Bienstock said.
Besides, the report found that 54 per cent of the employers who have frozen salaries plan to unfreeze them within the next six months. While, 49 per cent of the employers who have ceased hiring plans to hire more within six months.
“The general economic picture right now is definitely brighter than it was just a few months ago,” Watson Wyatt strategic rewards global director Laura Sejen said. “However, most employers aren’t fully convinced that the improvements they’ve seen are here to stay. While, many plan to hire workers over the next few months, they remain concerned about their ability to attract and retain the right people,” Sejen added.
The companies who are expecting to make offers to new hires, 83 per cent would recruit professional, non-managerial staff, followed by 71 per cent for director, manager or middle management positions. Only 47 per cent would be hiring for senior management or executive level positions.
However, about one-fifth still anticipate making layoffs in the remainder of 2009 or in 2010.
According to the survey of 201 US employers by HR consulting Watson Wyatt, about 65 per cent of them are more concerned about the retention of top-performing employees than they were before the economic crisis hit.
Looking ahead three to five years, half (50 per cent) of the employers expect an increase in difficulty in attracting critical-skill employees, and 55 per cent expect an increase in difficulty in retaining talent.
The survey revealed that 44 per cent of employers have encouraged managers to make greater use of recognition plans. However, only 8 per cent of these employers have seen managers actually increase their use of these plans to a significant or great extent. “However, recognition programmes that keep employees engaged and motivated can create a key competitive advantage,” Watson Wyatt strategic rewards leader (US) Laurie Bienstock said.
Besides, the report found that 54 per cent of the employers who have frozen salaries plan to unfreeze them within the next six months. While, 49 per cent of the employers who have ceased hiring plans to hire more within six months.
“The general economic picture right now is definitely brighter than it was just a few months ago,” Watson Wyatt strategic rewards global director Laura Sejen said. “However, most employers aren’t fully convinced that the improvements they’ve seen are here to stay. While, many plan to hire workers over the next few months, they remain concerned about their ability to attract and retain the right people,” Sejen added.
The companies who are expecting to make offers to new hires, 83 per cent would recruit professional, non-managerial staff, followed by 71 per cent for director, manager or middle management positions. Only 47 per cent would be hiring for senior management or executive level positions.
However, about one-fifth still anticipate making layoffs in the remainder of 2009 or in 2010.
HP, IBM, Outsourcing
IBM, HP shortlisted for $700 million Microsoft deal
Multinational outsourcing firms IBM and HP have been shortlisted for around $700-million contract for managing Microsoft’s global network of desktops, servers and other IT infrastructure, as the world’s biggest software maker seeks to lower its operational costs and focus better on its core business.
India’s top outsourcing vendors had also bid for this contract, but they lost out to the multinational rivals who have better global footprints and are even ready to take over assets, including Microsoft’s staff.
“This was one contract where most of us were bidding hard, especially given the kind of customer we are talking about, but global service providers seem to have taken a lead,” said a senior executive at one of the tech firms involved during the early-stage of bidding.
Another person based in the US and familiar with this contract said, Microsoft had issued a global request for proposal (RFP) few months ago for this contract. Officials at Microsoft India did not respond to an e-mail query sent by ET.
The global IT infrastructure market has been growing exponentially over the past few years. The top-15 vendors, analysed by Forrester in a recent report, provided remote and onsite services for about 16.7 million desktops, 1.7 million servers and 23.4 million users globally. These vendors, including IBM, HP-EDS, CSC and some Indian tech firms, delivered $83.9 billion worth of infrastructure services past year.
“Some clients clearly will require the scope only an IBM or HP can deliver, but many don’t,” said Paul Roehrig, principal analyst at Forrester Research. “All of the India-centric firms, included in the study — Cognizant, HCL Technologies, Infosys, TCS, and Wipro — have excellent forward-looking strategies for the infrastructure business,” he added.
On their part, Indian tech firms, such as TCS, Infosys and Wipro, have made substantial progress in gaining market share when it comes to application development, maintenance and back-office outsourcing, however, outsourcing of computer hardware maintenance is an area where multinational rivals still lead.
“In areas where infrastructure can be managed remotely, Indian vendors are as good as anybody else, however, there are certain pieces of infrastructure management, such as end user computing, where they do not have enough global resources,” said Siddharth Pai, managing director of outsourcing advisory firm TPI India. Indeed, when HCL recently won over $350 million infrastructure from Reader’s Digest Association in March this year, it involved remote management of the publisher’s desktops and servers.
Apart from having substantial onshore resources, some infrastructure outsourcing contracts also involve financing, which is readily offered by vendors such as IBM and HP. India’s pure software vendors do not have hardware products to be bundled with such contracts. Moreover, because of asset transfer, most infrastructure deals offer lower operating margins when compared with application development and maintenance contracts.
“In a $500-million contract, involving only people, the margins can be $100 million, but when it includes asset transfer, the margins can hit $55 million,” argued Mr Pai. While lower margins may be making it less attractive for Indian companies to pursue large infrastructure outsourcing contract, they are ready to execute projects, involving remote delivery, which helps them retain their margins.
“Although dwarfed in size by the legacy global service provider firms, India-centric firms, including Cognizant, HCL Technologies, Infosys, and TCS, also landed among the leaders by showing good delivery capability and generally strong forward-looking strategies for the global infrastructure services business,” added Mr Roehrig of Forrester.
India’s top outsourcing vendors had also bid for this contract, but they lost out to the multinational rivals who have better global footprints and are even ready to take over assets, including Microsoft’s staff.
“This was one contract where most of us were bidding hard, especially given the kind of customer we are talking about, but global service providers seem to have taken a lead,” said a senior executive at one of the tech firms involved during the early-stage of bidding.
Another person based in the US and familiar with this contract said, Microsoft had issued a global request for proposal (RFP) few months ago for this contract. Officials at Microsoft India did not respond to an e-mail query sent by ET.
The global IT infrastructure market has been growing exponentially over the past few years. The top-15 vendors, analysed by Forrester in a recent report, provided remote and onsite services for about 16.7 million desktops, 1.7 million servers and 23.4 million users globally. These vendors, including IBM, HP-EDS, CSC and some Indian tech firms, delivered $83.9 billion worth of infrastructure services past year.
“Some clients clearly will require the scope only an IBM or HP can deliver, but many don’t,” said Paul Roehrig, principal analyst at Forrester Research. “All of the India-centric firms, included in the study — Cognizant, HCL Technologies, Infosys, TCS, and Wipro — have excellent forward-looking strategies for the infrastructure business,” he added.
On their part, Indian tech firms, such as TCS, Infosys and Wipro, have made substantial progress in gaining market share when it comes to application development, maintenance and back-office outsourcing, however, outsourcing of computer hardware maintenance is an area where multinational rivals still lead.
“In areas where infrastructure can be managed remotely, Indian vendors are as good as anybody else, however, there are certain pieces of infrastructure management, such as end user computing, where they do not have enough global resources,” said Siddharth Pai, managing director of outsourcing advisory firm TPI India. Indeed, when HCL recently won over $350 million infrastructure from Reader’s Digest Association in March this year, it involved remote management of the publisher’s desktops and servers.
Apart from having substantial onshore resources, some infrastructure outsourcing contracts also involve financing, which is readily offered by vendors such as IBM and HP. India’s pure software vendors do not have hardware products to be bundled with such contracts. Moreover, because of asset transfer, most infrastructure deals offer lower operating margins when compared with application development and maintenance contracts.
“In a $500-million contract, involving only people, the margins can be $100 million, but when it includes asset transfer, the margins can hit $55 million,” argued Mr Pai. While lower margins may be making it less attractive for Indian companies to pursue large infrastructure outsourcing contract, they are ready to execute projects, involving remote delivery, which helps them retain their margins.
“Although dwarfed in size by the legacy global service provider firms, India-centric firms, including Cognizant, HCL Technologies, Infosys, and TCS, also landed among the leaders by showing good delivery capability and generally strong forward-looking strategies for the global infrastructure services business,” added Mr Roehrig of Forrester.
Friday, October 30, 2009
NRIs, Wipro
Premji assures support for affected staff in France
Wipro Chairman Azim Premji today assured the French government that the 60-odd employees working with the company’s wireless IT division in Sophia Antipolis would receive support, even as it plans to exit the wireless intelllectual property (IP) product business.
During his discussion with Christian Estrosi, ministry of industry (Paris), Premji said: “We reiterate our commitment to France, a key growth market for Wipro. We look forward to growing our presence, serving our customers effectively and creating employment opportunities in the country.”
He explained that his company had implemented exemplary social measures to support the employees at the Sophia Antipolis centre who were affected due to Wipro’s worldwide exit from the IP connectivity business. These measures include support to encourage employment and entrepreneurship, as well as financial benefits.
During the discussion, Estrosi reiterated a “strong attachment to the fact that all the employees of Sophia’s centre can find again a professional future as quickly as possible, through solutions of employee take over and/or of company creation carried by employees”.
Talking to mediapersons during the company’s quarterly results announcement this week, Wipro officials had stated that the company had come to an amicable settlement with the affected employees in France. As a part of this, Wipro had offered the IP developed at the centre to the affected employees at Sophia Antipolis free of charge. Besides, the company had offered its office space and equipment free for charge to those employees for one year.
Since the last three years, Wipro has implemented its development plan for its IT services in the French market. Christophe Martinoli, head of France, Wipro Technologies, said the company intended to double its staff base and revenues in France in the next 18 months.
During his discussion with Christian Estrosi, ministry of industry (Paris), Premji said: “We reiterate our commitment to France, a key growth market for Wipro. We look forward to growing our presence, serving our customers effectively and creating employment opportunities in the country.”
He explained that his company had implemented exemplary social measures to support the employees at the Sophia Antipolis centre who were affected due to Wipro’s worldwide exit from the IP connectivity business. These measures include support to encourage employment and entrepreneurship, as well as financial benefits.
During the discussion, Estrosi reiterated a “strong attachment to the fact that all the employees of Sophia’s centre can find again a professional future as quickly as possible, through solutions of employee take over and/or of company creation carried by employees”.
Talking to mediapersons during the company’s quarterly results announcement this week, Wipro officials had stated that the company had come to an amicable settlement with the affected employees in France. As a part of this, Wipro had offered the IP developed at the centre to the affected employees at Sophia Antipolis free of charge. Besides, the company had offered its office space and equipment free for charge to those employees for one year.
Since the last three years, Wipro has implemented its development plan for its IT services in the French market. Christophe Martinoli, head of France, Wipro Technologies, said the company intended to double its staff base and revenues in France in the next 18 months.
Recession
Recession over? GDP grows 3.5%
The U.S. economy grew more than expected in the third quarter, according to the government's initial report on gross domestic product.
The Commerce Department says GDP grew at an annual rate of 3.5 percent last quarter, the first positive quarterly growth in a year, and the largest quarterly advance since the third quarter of 2007.
GDP contracted by 0.7 percent in the second quarter.
Third quarter growth was led by double digit gains in durable goods and residential real estate, categories propped up by government stimulus programs like the first time home buyer credit and the cash for clunkers program. While that raises questions about the sustainability of growth as stimulus programs unwind, the Obama administration did not hesitate to take the credit.
"Today's numbers indicate that the tough decisions this administration made to rescue the economy from the abyss were correct," said Commerce Secretary Gary Locke in a statement. "We're headed in the right direction, and even though there are still too many Americans out of work and still much work to be done, without the action taken in the early days of this administration, the pain families are feeling today would be much worse."
The Labor Department reported Thursday that first time jobless claims totaled 530,000 last week, although the total number of Americans currently receiving unemployment benefits fell 148,000 to 5.8 million, the biggest one week decline since July.
The official declaration of the beginning and end of a recession has traditionally been given to the National Bureau of Economic Research, which has not raced to make any such declaration. Its Web site continues to mark the endpoint of the current recession with a question mark.
The Commerce Department says GDP grew at an annual rate of 3.5 percent last quarter, the first positive quarterly growth in a year, and the largest quarterly advance since the third quarter of 2007.
GDP contracted by 0.7 percent in the second quarter.
Third quarter growth was led by double digit gains in durable goods and residential real estate, categories propped up by government stimulus programs like the first time home buyer credit and the cash for clunkers program. While that raises questions about the sustainability of growth as stimulus programs unwind, the Obama administration did not hesitate to take the credit.
"Today's numbers indicate that the tough decisions this administration made to rescue the economy from the abyss were correct," said Commerce Secretary Gary Locke in a statement. "We're headed in the right direction, and even though there are still too many Americans out of work and still much work to be done, without the action taken in the early days of this administration, the pain families are feeling today would be much worse."
The Labor Department reported Thursday that first time jobless claims totaled 530,000 last week, although the total number of Americans currently receiving unemployment benefits fell 148,000 to 5.8 million, the biggest one week decline since July.
The official declaration of the beginning and end of a recession has traditionally been given to the National Bureau of Economic Research, which has not raced to make any such declaration. Its Web site continues to mark the endpoint of the current recession with a question mark.
IT market, new openings
iGate to hire 1,500 people next year
IT services player iGate has announced that it will hire 1,500 people in 2010, following a rebound in IT outsourcing contracts. iGate said the plan to increase the headcount was a reflection of the improving business environment.
Said iGate CEO Phaneesh Murthy, "We believe there is already a revival in the demand side as the companies have started spending on discretionary projects. The IT budgets are also expected to increase by 2-4 per cent, in 2010." He was in Bangalore on Thursday to inaugurate its new facility, measuring 1.15 lakh sq.ft with a seating capacity of 1,050 people.
The Nasdaq-listed company has 6,400 employees. In the fourth quarter of the present calendar (Oct-Dec 2009), iGate intends to hire 300 people, including 100 for BPO services.
Murthy said, while the pricing environment largely remained stable, the company was seeing a huge increase in the number of first time outsourcers. Of the 12 new clients iGate added during the last two quarters, 11 were first time outsourcers. "This indicates that offshoring to locations like India is expected to increase in the coming days," he added. iGate had reported revenues of $49.1 million in the September quarter.
The company is present in India in four locations including Bangalore, Hyderabad, Chennai and Noida. It has a near-shore centre in Mexico as well. Its new facility is located in iGate's 13.5 acre campus.
According to the company, special efforts were made to make the new phase green by introducing LED and solar lighting, an ozone-friendly air conditioning system, organic waste converter and a wastewater recycling system.
iGate has taken on a carbon footprint estimation study to determine the Green House Gas (GHG) inventory across all its global delivery facilities in India, Australia and Mexico.
Said iGate CEO Phaneesh Murthy, "We believe there is already a revival in the demand side as the companies have started spending on discretionary projects. The IT budgets are also expected to increase by 2-4 per cent, in 2010." He was in Bangalore on Thursday to inaugurate its new facility, measuring 1.15 lakh sq.ft with a seating capacity of 1,050 people.
The Nasdaq-listed company has 6,400 employees. In the fourth quarter of the present calendar (Oct-Dec 2009), iGate intends to hire 300 people, including 100 for BPO services.
Murthy said, while the pricing environment largely remained stable, the company was seeing a huge increase in the number of first time outsourcers. Of the 12 new clients iGate added during the last two quarters, 11 were first time outsourcers. "This indicates that offshoring to locations like India is expected to increase in the coming days," he added. iGate had reported revenues of $49.1 million in the September quarter.
The company is present in India in four locations including Bangalore, Hyderabad, Chennai and Noida. It has a near-shore centre in Mexico as well. Its new facility is located in iGate's 13.5 acre campus.
According to the company, special efforts were made to make the new phase green by introducing LED and solar lighting, an ozone-friendly air conditioning system, organic waste converter and a wastewater recycling system.
iGate has taken on a carbon footprint estimation study to determine the Green House Gas (GHG) inventory across all its global delivery facilities in India, Australia and Mexico.
IT market
Sasken to tie-up with US-based Ingenient Technologies
Sasken Communication Technologies on Wednesday said that it will acquire the product portfolio and certain customer contracts and assets of US-based Ingenient Technologies, a highly professional multimedia software solutions company.
Ingenient will also transfer engineering and sales teams (including some in Korea and Japan) to Sasken. Sasken did not reveal the value of the deal.
According to Sasken, the acquisition of these assets are in line with its strategy of diversifying its portfolio and expanding into market segments like consumer and automotive electronics.
The transferred set of engineering employees in the US will form the core of Sasken’s Chicago development centre.
Sasken will now have a research and development centre in the US, which will be a beachhead for new product development supported by multi-site service delivery models. Sasken will also have presence in Korea and will strengthen its existing center in Japan, both countries being epicenters for development of consumer and lifestyle products.
Founded in 2000, Ingenient is a global provider of embedded multimedia software solutions to multinational companies ranging in size from tier one original equipment manufacturers to high-tech startups. Ingenient’s software solutions enable creation, delivery, management and presentation of rich multimedia content, according to Sasken.
Utilising these software solutions, Ingenient’s customers can immediately create leading-edge multimedia products for the consumer electronics, enterprise, security and surveillance, and infrastructure markets.
Rajiv Mody, Sasken’s chairman and CEO, said, “As a company with high professional standards, Sasken has always aimed to be the supplier of choice for embedded R&D services. Ingenient’s multimedia solutions combined with Sasken’s global reach and India-based development centers will enable us to offer a compelling portfolio of value added solutions.”
Ingenient will also transfer engineering and sales teams (including some in Korea and Japan) to Sasken. Sasken did not reveal the value of the deal.
According to Sasken, the acquisition of these assets are in line with its strategy of diversifying its portfolio and expanding into market segments like consumer and automotive electronics.
The transferred set of engineering employees in the US will form the core of Sasken’s Chicago development centre.
Sasken will now have a research and development centre in the US, which will be a beachhead for new product development supported by multi-site service delivery models. Sasken will also have presence in Korea and will strengthen its existing center in Japan, both countries being epicenters for development of consumer and lifestyle products.
Founded in 2000, Ingenient is a global provider of embedded multimedia software solutions to multinational companies ranging in size from tier one original equipment manufacturers to high-tech startups. Ingenient’s software solutions enable creation, delivery, management and presentation of rich multimedia content, according to Sasken.
Utilising these software solutions, Ingenient’s customers can immediately create leading-edge multimedia products for the consumer electronics, enterprise, security and surveillance, and infrastructure markets.
Rajiv Mody, Sasken’s chairman and CEO, said, “As a company with high professional standards, Sasken has always aimed to be the supplier of choice for embedded R&D services. Ingenient’s multimedia solutions combined with Sasken’s global reach and India-based development centers will enable us to offer a compelling portfolio of value added solutions.”
IT market
SAP cuts sales forecast
SAP AG, the world’s biggest maker of business-management software, cut its sales forecast for the year as clients in emerging markets and Japan spent less than it anticipated, sending its stock to the biggest drop in a year.
SAP, which today reported a less-than-expected 12% increase in third-quarter profit, cut its sales outlook for the second time this year. Software and related service revenue will fall between 6 percent and 8 percent in 2009 at constant currencies and excluding a writedown from acquiring Business Objects SA, it said in an e-mailed statement. In July, it had predicted a drop of 4 percent to 6 percent.
“These are really disappointing figures, much worse than expected,” said Ulf Moritzen, a fund manager at Aramea Asset Management AG in Hamburg, which oversees about $1 billion, including SAP shares. “Clients are obviously still reluctant to invest in software, so cost-cutting is the only option SAP has at the moment to safeguard profitability.”
SAP, which counts Apple Inc., Coca-Cola Co. and Wal-Mart Stores Inc. among its customers, said although it’s seeing some “signs of stabilization, the market remains difficult.” Last month, SAP’s biggest rival, Oracle Corp., reported sales, including revenue from acquired companies, slid 6.6 percent to $5.06 billion in the three months to August 31.
In the third quarter, SAP faced “challenging conditions in some of the emerging markets and in Japan,” Chief Executive Officer Leo Apotheker said in an interview on Bloomberg TV today. “We adjusted our guidance because 2009 is a very peculiar year, it’s very hard to predict.”
SAP, which today reported a less-than-expected 12% increase in third-quarter profit, cut its sales outlook for the second time this year. Software and related service revenue will fall between 6 percent and 8 percent in 2009 at constant currencies and excluding a writedown from acquiring Business Objects SA, it said in an e-mailed statement. In July, it had predicted a drop of 4 percent to 6 percent.
“These are really disappointing figures, much worse than expected,” said Ulf Moritzen, a fund manager at Aramea Asset Management AG in Hamburg, which oversees about $1 billion, including SAP shares. “Clients are obviously still reluctant to invest in software, so cost-cutting is the only option SAP has at the moment to safeguard profitability.”
SAP, which counts Apple Inc., Coca-Cola Co. and Wal-Mart Stores Inc. among its customers, said although it’s seeing some “signs of stabilization, the market remains difficult.” Last month, SAP’s biggest rival, Oracle Corp., reported sales, including revenue from acquired companies, slid 6.6 percent to $5.06 billion in the three months to August 31.
In the third quarter, SAP faced “challenging conditions in some of the emerging markets and in Japan,” Chief Executive Officer Leo Apotheker said in an interview on Bloomberg TV today. “We adjusted our guidance because 2009 is a very peculiar year, it’s very hard to predict.”
IT market
Cisco's revenues inch closer to $1b mark
As Cisco, the world’s largest computer networking equipment maker, approaches around $1 billion in revenues from India, the company is hoping that increased government spending on technology will keep the momentum going.
Cisco has already won three contracts awarded by State Electricity Boards (SEBs) for computerization, each being worth around Rs 200-500 crore. These projects are part of the government’s bigger agenda for computerisation of the power sector by investing nearly Rs 10,000 crore.
"Government and PSUs were the top revenue earners for us, replacing IT services customers who were the biggest until slowdown happened," said Naresh B Wadhwa, managing director of Cisco India. Cisco also won the networking portion of Rs 1,200 crore ESIC contract along with Wipro.
Cisco does not give out its revenues from the Indian market, but according to Voice and Data, the company’s India revenues were around Rs 4,500 crore last year. "There are many markets that are still in the making, such as traffic management, water management and security. Transport is also a big opportunity," said Mr Wadhwa.
An expert tracking Cisco’s Indian wins said many tenders specify Cisco switches, which works to the company’s advantage. "Some of the tenders specify Cisco switches instead of a more generic specification," he said.
Some of Cisco’s competitors for high-end services are Nortel and Avaya and in networking, switches players such as DAX and Chinese vendor, ZTE. "Nortel’s filing of Chapter 11 has not impacted its business in India much and large firms such as Reliance continue to use its products," the expert added.
Cisco is also participating in state-wide area network (SWAN) contracts for wiring state and district headquarters in Gujarat, Punjab, Haryana, Tamil Nadu, Jharkhand, Sikkim, and bidding for contracts for setting up state data centres (SDCs).
Around 18 states are coming out with tenders for setting up SDCs. Mr Wadhwa expects that following SWAN contracts, there will be contracts to network with state departments like revenue, police and health. "Once you have the infrastructure, you add more applications and keep building on top of it," he said.
Cisco has already won three contracts awarded by State Electricity Boards (SEBs) for computerization, each being worth around Rs 200-500 crore. These projects are part of the government’s bigger agenda for computerisation of the power sector by investing nearly Rs 10,000 crore.
"Government and PSUs were the top revenue earners for us, replacing IT services customers who were the biggest until slowdown happened," said Naresh B Wadhwa, managing director of Cisco India. Cisco also won the networking portion of Rs 1,200 crore ESIC contract along with Wipro.
Cisco does not give out its revenues from the Indian market, but according to Voice and Data, the company’s India revenues were around Rs 4,500 crore last year. "There are many markets that are still in the making, such as traffic management, water management and security. Transport is also a big opportunity," said Mr Wadhwa.
An expert tracking Cisco’s Indian wins said many tenders specify Cisco switches, which works to the company’s advantage. "Some of the tenders specify Cisco switches instead of a more generic specification," he said.
Some of Cisco’s competitors for high-end services are Nortel and Avaya and in networking, switches players such as DAX and Chinese vendor, ZTE. "Nortel’s filing of Chapter 11 has not impacted its business in India much and large firms such as Reliance continue to use its products," the expert added.
Cisco is also participating in state-wide area network (SWAN) contracts for wiring state and district headquarters in Gujarat, Punjab, Haryana, Tamil Nadu, Jharkhand, Sikkim, and bidding for contracts for setting up state data centres (SDCs).
Around 18 states are coming out with tenders for setting up SDCs. Mr Wadhwa expects that following SWAN contracts, there will be contracts to network with state departments like revenue, police and health. "Once you have the infrastructure, you add more applications and keep building on top of it," he said.
IT market, Wipro
Wipro to strengthen presence in France, grow job opportunities
Wipro Chairman Azim Premji has reiterated the company's commitment to France, a key growth market for the company, by growing its presence and creating employment opportunities in that country.
Premji, who met Christian Estrosi from the Ministry of Industry Paris, during a high-level delegation meeting in Paris yesterday to discuss the Wipro's IT services growth strategy for France, said the IT firm was committed to work with local authorities to encourage local employment regeneration.
During the discussion, both Estrosi and Premji also spoke about Wipro's worldwide exit from the IP connectivity activity, which implied closure of its Sophia Antipolis centre, a Wipro release said here today.
During the discussions, Wipro reiterated the measures being implemented to support the employees who will exit from the company, including providing financial benefits.
According to Christophe Martinoli, Head of France, Wipro Technologies, "With continued investment and our focus in creating a skilled talent base in France, we intend to double our staff base and revenues in the next 18 months to serve our French customers across industries such as retail, manufacturing, telecom, energy and utilities, banking and insurance"
The company said over a period of time, it had increased its headcount in France from less than 30 to 170.
Premji, who met Christian Estrosi from the Ministry of Industry Paris, during a high-level delegation meeting in Paris yesterday to discuss the Wipro's IT services growth strategy for France, said the IT firm was committed to work with local authorities to encourage local employment regeneration.
During the discussion, both Estrosi and Premji also spoke about Wipro's worldwide exit from the IP connectivity activity, which implied closure of its Sophia Antipolis centre, a Wipro release said here today.
During the discussions, Wipro reiterated the measures being implemented to support the employees who will exit from the company, including providing financial benefits.
According to Christophe Martinoli, Head of France, Wipro Technologies, "With continued investment and our focus in creating a skilled talent base in France, we intend to double our staff base and revenues in the next 18 months to serve our French customers across industries such as retail, manufacturing, telecom, energy and utilities, banking and insurance"
The company said over a period of time, it had increased its headcount in France from less than 30 to 170.
IT market, NRIs
India asks UK to open doors to its IT professionals
Britain has promised to look into suggestions to allow more Indian IT professionals into UK to build up a strategic partnership in the information technology field.
The suggestion was made by President Pratibha Patil to British Prime Minister Gordon Brown during a meeting here at the 10, Downing Street last night.
Patil stressed on the need for greater participation of Indian IT professionals in UK, which Brown assured to look into, Foreign Ministry Officials accompanying the President told reporters.
The US and other major EU nations have allowed greater flow of Indian IT professionals, which has led to a boom in the sector in these countries and apparently Patil's suggestion was to ensure that Britain did not lag behind.
Brown said India-UK cooperation in IT was a very important area for the growing bilateral strategic partnership, officials said.
The 30-minute long meeting between the two leaders also focused on issues of bilateral cooperation in economy and education.
Brown told the President that business ties between the two countries were flourishing with a large number of Indian companies now listed on London Stock Exchange.
Britian is also one of the largest foreign direct investors in India.
During the meeting, Brown also expressed keenness in further boosting India-UK cooperation in the field of education, the officials said.
The UK has recently opened the doors of most of its varsities to Indian students, and in this regard the discussion between two leaders covered expanding the cooperation to premium institutions of higher education in India, including IIT and a Central University.
Brown said that the UK was again becoming a large destination for Indian students, a fact pointed out by Patil and Queen Elizabeth during the State Banquet hosted at Windsor Castle.
Patil is the first Indian head of state to visit United Kingdom in last 20 years.
The two leaders exchanged their views on various issues pertaining to social spectrum, Millennium Development Goals and various aspects of women empowerment and dwelt on the role of women in contributing to democracy and development, the officials said.
The Prime Minister said that UK was very keen to partner India in socio-economic sector, the officials said.
The suggestion was made by President Pratibha Patil to British Prime Minister Gordon Brown during a meeting here at the 10, Downing Street last night.
Patil stressed on the need for greater participation of Indian IT professionals in UK, which Brown assured to look into, Foreign Ministry Officials accompanying the President told reporters.
The US and other major EU nations have allowed greater flow of Indian IT professionals, which has led to a boom in the sector in these countries and apparently Patil's suggestion was to ensure that Britain did not lag behind.
Brown said India-UK cooperation in IT was a very important area for the growing bilateral strategic partnership, officials said.
The 30-minute long meeting between the two leaders also focused on issues of bilateral cooperation in economy and education.
Brown told the President that business ties between the two countries were flourishing with a large number of Indian companies now listed on London Stock Exchange.
Britian is also one of the largest foreign direct investors in India.
During the meeting, Brown also expressed keenness in further boosting India-UK cooperation in the field of education, the officials said.
The UK has recently opened the doors of most of its varsities to Indian students, and in this regard the discussion between two leaders covered expanding the cooperation to premium institutions of higher education in India, including IIT and a Central University.
Brown said that the UK was again becoming a large destination for Indian students, a fact pointed out by Patil and Queen Elizabeth during the State Banquet hosted at Windsor Castle.
Patil is the first Indian head of state to visit United Kingdom in last 20 years.
The two leaders exchanged their views on various issues pertaining to social spectrum, Millennium Development Goals and various aspects of women empowerment and dwelt on the role of women in contributing to democracy and development, the officials said.
The Prime Minister said that UK was very keen to partner India in socio-economic sector, the officials said.
Layoffs in USA
US Air to cut 1,000 jobs, reduce routes
US Airways will cut 1,000 jobs and scale back its flying routes as part of a restructuring plan to turn the struggling airline profitable again, the company announced Wednesday.
The cutbacks that will happen in the first half of 2010 include 200 pilots, 150 flight attendants and 600 airport passenger and service ramp positions, US Air said in a statement.
The Tempe, Ariz.-based airline will refocus its routes to fly through its three major hubs -- Charlotte, N.C., Philadelphia and Phoenix, Ariz. -- and Washington, D.C., through which the airline runs an hourly shuttle service to New York's LaGuardia Airport and Boston.
The change will reduce flights from Las Vegas to 36 daily departures by February next year from its current 64 flights.
The crew bases in Boston, LaGuardia and Las Vegas will also close in 2010 and relocate to one of the hubs or Washington.
US Air (LCC, Fortune 500) will drop service in Colorado Springs, Colo., and Wichita, Kan., and will also cut international flights.
The carrier will suspend flights between its Philadelphia hub and European cities including Birmingham, England; London Gatwick; Milan, Italy; Shannon, Ireland, and Stockholm, Sweden. Flights between Philadelphia and Beijing are also on hold "until economic conditions improve," the airline said.
The cutbacks that will happen in the first half of 2010 include 200 pilots, 150 flight attendants and 600 airport passenger and service ramp positions, US Air said in a statement.
The Tempe, Ariz.-based airline will refocus its routes to fly through its three major hubs -- Charlotte, N.C., Philadelphia and Phoenix, Ariz. -- and Washington, D.C., through which the airline runs an hourly shuttle service to New York's LaGuardia Airport and Boston.
The change will reduce flights from Las Vegas to 36 daily departures by February next year from its current 64 flights.
The crew bases in Boston, LaGuardia and Las Vegas will also close in 2010 and relocate to one of the hubs or Washington.
US Air (LCC, Fortune 500) will drop service in Colorado Springs, Colo., and Wichita, Kan., and will also cut international flights.
The carrier will suspend flights between its Philadelphia hub and European cities including Birmingham, England; London Gatwick; Milan, Italy; Shannon, Ireland, and Stockholm, Sweden. Flights between Philadelphia and Beijing are also on hold "until economic conditions improve," the airline said.
IBM
IBM to Give Employees 100% Coverage of Primary Care
International Business Machines Corp., the world’s largest computer-services company, will provide U.S. employees with 100 percent coverage for primary care, a policy designed to curb health expenses.
Beginning next year, employees will no longer have to pay deductibles for visits to in-network doctors such as internists, general practitioners and pediatricians, Armonk, New York-based IBM said today in a statement. The company said it is one of the first U.S. employers to adopt such a policy.
The decision is aimed at encouraging employees to visit the doctor more often, so illnesses are treated before they become serious. IBM said the policy will cover about 80 percent of its 115,000 U.S. employees. The other 20 percent belong to health maintenance organizations.
“We believe in giving people incentives to get health care early and often,” said Marianne DeFazio, director of health- care benefits and strategy at IBM. “When people have no barriers to getting primary care, you catch things early and you prevent things.”
IBM said it has invested $79 million in nutrition and exercise programs between 2004 and 2007, saving more than twice that amount in health-care costs.
DeFazio declined to say how much the move would cost IBM in the near term. More prevention will eventually cut health cost inflation, she said.
“We believe more efficient and individualized care will result in better outcomes and lower costs for everyone,” she said.
Primary Care
IBM will have to blend financial incentives for primary care with information to push costs down, said Lisa Suennen, a health-care venture capitalist at Psilos Group in Corte Madera, California. Insurance plans at some companies give diabetics incentives to get primary care, and add education programs to help patients understand how to care for chronic illness, she said.
What IBM is doing “is not common at all, and it’s a good start,” Suennen said. “But it needs to be coupled with information to coach the patients.”
Previously, IBM required health-plan participants to pay 20 percent of the cost of primary care, DeFazio said. The company already covered preventive measures such as mammograms for women over 40 and colonoscopies for employees over 50, DeFazio said.
IBM rose $1.37 to $122.87 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have advanced 46 percent this year.
Beginning next year, employees will no longer have to pay deductibles for visits to in-network doctors such as internists, general practitioners and pediatricians, Armonk, New York-based IBM said today in a statement. The company said it is one of the first U.S. employers to adopt such a policy.
The decision is aimed at encouraging employees to visit the doctor more often, so illnesses are treated before they become serious. IBM said the policy will cover about 80 percent of its 115,000 U.S. employees. The other 20 percent belong to health maintenance organizations.
“We believe in giving people incentives to get health care early and often,” said Marianne DeFazio, director of health- care benefits and strategy at IBM. “When people have no barriers to getting primary care, you catch things early and you prevent things.”
IBM said it has invested $79 million in nutrition and exercise programs between 2004 and 2007, saving more than twice that amount in health-care costs.
DeFazio declined to say how much the move would cost IBM in the near term. More prevention will eventually cut health cost inflation, she said.
“We believe more efficient and individualized care will result in better outcomes and lower costs for everyone,” she said.
Primary Care
IBM will have to blend financial incentives for primary care with information to push costs down, said Lisa Suennen, a health-care venture capitalist at Psilos Group in Corte Madera, California. Insurance plans at some companies give diabetics incentives to get primary care, and add education programs to help patients understand how to care for chronic illness, she said.
What IBM is doing “is not common at all, and it’s a good start,” Suennen said. “But it needs to be coupled with information to coach the patients.”
Previously, IBM required health-plan participants to pay 20 percent of the cost of primary care, DeFazio said. The company already covered preventive measures such as mammograms for women over 40 and colonoscopies for employees over 50, DeFazio said.
IBM rose $1.37 to $122.87 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have advanced 46 percent this year.
IT market
Syntel's third quarter results beats Wall Street expectations
Syntel's revenue for the third quarter increased one percent to $104.7 million (Rs.506 crore), compared to $103.8 million (Rs.502 crore) in the prior-year period, and increased five percent sequentially from $100.1 million (Rs.484 crore) in the second quarter of 2009.
Sequential revenue improvement was driven by its Applications Outsourcing service offering, and growth was broad-based across all verticals. During the third quarter, Applications Outsourcing accounted for 74 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 18 percent, e-Business contributing six percent and Team Sourcing at two percent.
The Company's gross margin improved to 49.3 percent in the third quarter, compared to 44.3 percent in the prior-year period (500 bps increase) and 48.2 percent in the second quarter of 2009 (110 bps increase) .
Selling, General and Administrative (SG&A) expenses were 18.1 percent in the third quarter, compared to 19.1 percent in the prior-year period and 20.8 percent in the previous quarter.
The Company's gross margin improved to 49.3 percent in the third quarter, compared to 44.3 percent in the prior-year period (500 bps increase) and 48.2 percent in the second quarter of 2009 (110 bps increase) .
Selling, General and Administrative (SG&A) expenses were 18.1 percent in the third quarter, compared to 19.1 percent in the prior-year period and 20.8 percent in the previous quarter.
Syntel's income from operations expanded to 31.2 percent in the third quarter as compared to 25.2 percent in the prior-year period (600 bps increase) and 27.4 percent in the second quarter of 2009 (380bps increase).
"Increasing stability in the business environment and a gradual improvement in customer confidence had a positive effect on our top line during the third quarter," said CEO and President Keshav Murugesh. "While our clients remain comfortable in moving forward with cost reduction initiatives, they are now increasingly willing to discuss longer-term business plans and strategic technology investments."
"The strong financial and operating discipline at Syntel has been evident in our financial performance during a very difficult nine month period. We expect that as demand for offshore services improves, costs of doing business in India will increase resulting in margin pressure. Syntel continues to invest in the people, infrastructure and new services necessary to drive long-term sustainable value for all of our key stakeholders."
Based on current visibility levels and an exchange rate assumption of 47.0 rupees to the dollar, the Company is updating 2009 guidance from Revenue of $395Mn (Rs.1,910 crore) to $415Mn (Rs.2,007 crore) and EPS of $2.40 to $2.50 to Revenue of $405Mn (Rs. 1,959 crore) to $408Mn (Rs.1,973 crore) and EPS of $2.60 to $2.65.
Sequential revenue improvement was driven by its Applications Outsourcing service offering, and growth was broad-based across all verticals. During the third quarter, Applications Outsourcing accounted for 74 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 18 percent, e-Business contributing six percent and Team Sourcing at two percent.
The Company's gross margin improved to 49.3 percent in the third quarter, compared to 44.3 percent in the prior-year period (500 bps increase) and 48.2 percent in the second quarter of 2009 (110 bps increase) .
Selling, General and Administrative (SG&A) expenses were 18.1 percent in the third quarter, compared to 19.1 percent in the prior-year period and 20.8 percent in the previous quarter.
The Company's gross margin improved to 49.3 percent in the third quarter, compared to 44.3 percent in the prior-year period (500 bps increase) and 48.2 percent in the second quarter of 2009 (110 bps increase) .
Selling, General and Administrative (SG&A) expenses were 18.1 percent in the third quarter, compared to 19.1 percent in the prior-year period and 20.8 percent in the previous quarter.
Syntel's income from operations expanded to 31.2 percent in the third quarter as compared to 25.2 percent in the prior-year period (600 bps increase) and 27.4 percent in the second quarter of 2009 (380bps increase).
"Increasing stability in the business environment and a gradual improvement in customer confidence had a positive effect on our top line during the third quarter," said CEO and President Keshav Murugesh. "While our clients remain comfortable in moving forward with cost reduction initiatives, they are now increasingly willing to discuss longer-term business plans and strategic technology investments."
"The strong financial and operating discipline at Syntel has been evident in our financial performance during a very difficult nine month period. We expect that as demand for offshore services improves, costs of doing business in India will increase resulting in margin pressure. Syntel continues to invest in the people, infrastructure and new services necessary to drive long-term sustainable value for all of our key stakeholders."
Based on current visibility levels and an exchange rate assumption of 47.0 rupees to the dollar, the Company is updating 2009 guidance from Revenue of $395Mn (Rs.1,910 crore) to $415Mn (Rs.2,007 crore) and EPS of $2.40 to $2.50 to Revenue of $405Mn (Rs. 1,959 crore) to $408Mn (Rs.1,973 crore) and EPS of $2.60 to $2.65.
IT market
Beware of the leaked version of Google Chrome OS
Google asked people not to believe the leaked version of Chrome operating system. Recently, Google announced that it is coming up with its own OS, and after that there have been rumors about a leaked version being available for download. The 'leaked version' is a fake that is not related to Google at all.
Even a trusted source like Gizmodo has perpetuated the myth that Chrome is available. Its tough when there is so much pressure to be the first to publish a breaking news story. Gizmodo recently reported a story of alleged Chrome operating system screen shots, but later updated the story to state that it was verified as a fake. Gizmodo pushed the story of the fake download with a story titled Google Chrome OS Now Available, Go Get It .
The number of sites and individuals who are propagating the story is lending credibility to the false rumor. A quick scan of Twitter or a quick search of the Web will lead to all sorts of seemingly reputable sources talking about the availability of the Chrome OS beta. Most of the excitement though can be traced back to Gizmodo. It is a trusted source of breaking tech news and it doesn't take much for an announcement on Gizmodo to go viral on Twitter and blog sites.
The site in question appears legitimate in so much as it is actually on the google.com domain. The site lists features like a GNOME desktop, Google Picassa integration, and a Flash Player plugin. It comes complete with a few Google logos scattered about.
However, it is actually a product of Google Sites. Basically, someone created a page with Google Sites which points to sites.google.com and populated it with basic information about the Chrome OS which could be extracted from publicly available details Google has shared, then added a link to download some other completely unrelated tool.
To be fair, the site owner did include a disclaimer at the bottom stating "Chrome OS is not related to Google. Service is provided by SUSE Studio. Seethe license." Google has since disabled the site for violating the Google Sites terms of service.
Chrome sounds like it has promise, although the operating system market is a tough sell that is already filled with dominating players like Microsoft and Apple. Of course, Google hasn't shied away from head-to-head battles with either of those companies in other arenas like Web search, mobile phone operating systems, or web browsers.
In the meantime, if a guy in a dark alley whispers that he has an early version of Chrome OS available, there is good reason to be suspicious. Google may have shut down this fake Chrome OS site, but others are sure to follow. If it walks like a duck, and quacks like a duck, its probably a duck. Check your sources and exercise some common sense before you rush to download a fake, and potentially malicious, Chrome OS.
Even a trusted source like Gizmodo has perpetuated the myth that Chrome is available. Its tough when there is so much pressure to be the first to publish a breaking news story. Gizmodo recently reported a story of alleged Chrome operating system screen shots, but later updated the story to state that it was verified as a fake. Gizmodo pushed the story of the fake download with a story titled Google Chrome OS Now Available, Go Get It .
The number of sites and individuals who are propagating the story is lending credibility to the false rumor. A quick scan of Twitter or a quick search of the Web will lead to all sorts of seemingly reputable sources talking about the availability of the Chrome OS beta. Most of the excitement though can be traced back to Gizmodo. It is a trusted source of breaking tech news and it doesn't take much for an announcement on Gizmodo to go viral on Twitter and blog sites.
The site in question appears legitimate in so much as it is actually on the google.com domain. The site lists features like a GNOME desktop, Google Picassa integration, and a Flash Player plugin. It comes complete with a few Google logos scattered about.
However, it is actually a product of Google Sites. Basically, someone created a page with Google Sites which points to sites.google.com and populated it with basic information about the Chrome OS which could be extracted from publicly available details Google has shared, then added a link to download some other completely unrelated tool.
To be fair, the site owner did include a disclaimer at the bottom stating "Chrome OS is not related to Google. Service is provided by SUSE Studio. Seethe license." Google has since disabled the site for violating the Google Sites terms of service.
Chrome sounds like it has promise, although the operating system market is a tough sell that is already filled with dominating players like Microsoft and Apple. Of course, Google hasn't shied away from head-to-head battles with either of those companies in other arenas like Web search, mobile phone operating systems, or web browsers.
In the meantime, if a guy in a dark alley whispers that he has an early version of Chrome OS available, there is good reason to be suspicious. Google may have shut down this fake Chrome OS site, but others are sure to follow. If it walks like a duck, and quacks like a duck, its probably a duck. Check your sources and exercise some common sense before you rush to download a fake, and potentially malicious, Chrome OS.
IT market
Sun CEO's salary slashed 37%
The value of Sun Microsystems Inc CEO Jonathan Schwartz's latest pay package dropped 37% from last year as the company lost more than $2 billion and was in such dire financial shape that it was forced to put itself up for sale.
In April, Oracle Corp. won a bidding contest with IBM Corp. for Sun, but can't complete its $7.4 billion deal yet because it is being held up by antitrust regulators in Europe who are worried about possible harm to competition in the database market.
Schwartz, 43, received a pay package for the 2009 fiscal year valued at nearly $7 million, according to calculations by The Associated Press from Sun's proxy filing Wednesday with the Securities and Exchange Commission.
Last year, his compensation was valued at about $11.1 million, according to the AP's calculations.
His $1 million salary was unchanged, and the roughly $55,000 Sun spent on Schwartz's chauffeur and matching 401(k) contributions was only a few thousand dollars less than last year.
The key difference was that Schwartz wasn't given a cash bonus this past year (he received a $1 million bonus the year before) and received stock grants worth $3 million less than in the 2008 period.
Schwartz did receive restricted stock worth $3.16 million on the date it was granted and $2.8 million worth of performance-based restricted stock. But the performance-based units were canceled because Sun's performance didn't meet the board's expectations.
Santa Clara, Calif.-based Sun lost $2.2 billion on $11.4 billion in revenue in the fiscal year ended June 30, compared with profit of $403 million on $13.9 billion in revenue in the prior year. Sun's scattershot performance since the dot-com meltdown nearly a decade ago was a key factor in Sun's decision to sell the company. Sun, which makes computer servers and software, has struggled because of a shift toward cheaper servers and heavy expenses at the company despite rounds of layoffs.
Sun said last week it plans to eliminate up to 3,000 jobs, or 10 percent of its global work force, over the next year.
Schwartz had $694,824 worth of restricted stock vest during the latest fiscal year, according to the filing. He didn't exercise any stock options.
In April, Oracle Corp. won a bidding contest with IBM Corp. for Sun, but can't complete its $7.4 billion deal yet because it is being held up by antitrust regulators in Europe who are worried about possible harm to competition in the database market.
Schwartz, 43, received a pay package for the 2009 fiscal year valued at nearly $7 million, according to calculations by The Associated Press from Sun's proxy filing Wednesday with the Securities and Exchange Commission.
Last year, his compensation was valued at about $11.1 million, according to the AP's calculations.
His $1 million salary was unchanged, and the roughly $55,000 Sun spent on Schwartz's chauffeur and matching 401(k) contributions was only a few thousand dollars less than last year.
The key difference was that Schwartz wasn't given a cash bonus this past year (he received a $1 million bonus the year before) and received stock grants worth $3 million less than in the 2008 period.
Schwartz did receive restricted stock worth $3.16 million on the date it was granted and $2.8 million worth of performance-based restricted stock. But the performance-based units were canceled because Sun's performance didn't meet the board's expectations.
Santa Clara, Calif.-based Sun lost $2.2 billion on $11.4 billion in revenue in the fiscal year ended June 30, compared with profit of $403 million on $13.9 billion in revenue in the prior year. Sun's scattershot performance since the dot-com meltdown nearly a decade ago was a key factor in Sun's decision to sell the company. Sun, which makes computer servers and software, has struggled because of a shift toward cheaper servers and heavy expenses at the company despite rounds of layoffs.
Sun said last week it plans to eliminate up to 3,000 jobs, or 10 percent of its global work force, over the next year.
Schwartz had $694,824 worth of restricted stock vest during the latest fiscal year, according to the filing. He didn't exercise any stock options.
Thursday, October 29, 2009
IT market
Ex-AMD CEO linked to Galleon scandal
Chip maker Advanced Micro Devices Inc. is "thoroughly reviewing" published reports fingering former chairman and CEO Hector Ruiz as the AMD executive who gave confidential company information to a defendant in the Galleon Group insider trading case.
"We are not aware of any allegation of criminal misconduct on the part of any current or former AMD employees, nor have any current or former AMD employees been charged with a crime," AMD said in a statement Tuesday. A spokesman for the Sunnyvale, Calif.-based company declined to comment further.
Citing an unnamed person familiar with the matter, The Wall Street Journal reported on its Web site Tuesday that Ruiz is the AMD executive described in the Manhattan US Attorney's Office complaint as passing inside information to defendant Danielle Chiesi.
Chiesi, 43, was among six hedge fund managers and corporate executives arrested earlier this month in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits. Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc that had assets worth about $1 billion under management, according to court papers.
Raj Rajaratnam, the Galleon Group portfolio manager at the center of the case, last week said Galleon would wind down its funds after publicity surrounding the case led some investors to pull out money.
Before he left AMD's CEO job last year, Ruiz was only the second person to run the company other than founder and longtime CEO Jerry Sanders and was one of the few Hispanic CEOs of a major U.S. corporation. Ruiz, now 63, left amid mounting investor frustration over AMD's finances. He was instrumental in orchestrating a fix: the spinoff of AMD's manufacturing operations into a company called GlobalFoundries Inc, of which he is now chairman.
A GlobalFoundries spokesman would say only that the allegations predate the company's launch. AMD, which had $5.8 billion in revenue last year,
is small compared to its rival Intel Corp., but is significant because it is the world's No. 2 maker of microprocessors. Microprocessors are the "brains" of personal computers. Intel owns about 80 percent of that market — AMD essentially has the rest.
Before word of Ruiz's possible involvement surfaced, the highest-ranking corporate executive ensnared in the insider-trading scheme was an IBM Corp senior vice president, Robert Moffat, who was once considered a possible candidate for CEO. Moffat was put on leave after the allegations surfaced and no longer serves as an officer of the company. Moffat is accused of leaking secrets about IBM's earnings and financial dealings with partners, including AMD.
That information allegedly included AMD's plans for GlobalFoundries. IBM was involved in those talks because it has a technology development partnership with AMD.
The indictment against Moffat and the person he's accused of supplying information to, Chiesi, says that an AMD executive also provided inside information to Chiesi, but that executive is not named.
The indictment quotes Chiesi allegedly boasting in wiretapped calls that she spoke multiple times with the AMD executive about the deal. The indictment quotes the AMD executive in multiple calls to Chiesi describing the timing and financial details of the deal, such as what would happen with AMD's debt under the new structure. In one call, on Sept. 16, 2008, the AMD executive was quoted as saying the spinoff wouldn't be announced until the following month and that it was going to "shock the hell out of everybody."
"We are not aware of any allegation of criminal misconduct on the part of any current or former AMD employees, nor have any current or former AMD employees been charged with a crime," AMD said in a statement Tuesday. A spokesman for the Sunnyvale, Calif.-based company declined to comment further.
Citing an unnamed person familiar with the matter, The Wall Street Journal reported on its Web site Tuesday that Ruiz is the AMD executive described in the Manhattan US Attorney's Office complaint as passing inside information to defendant Danielle Chiesi.
Chiesi, 43, was among six hedge fund managers and corporate executives arrested earlier this month in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits. Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc that had assets worth about $1 billion under management, according to court papers.
Raj Rajaratnam, the Galleon Group portfolio manager at the center of the case, last week said Galleon would wind down its funds after publicity surrounding the case led some investors to pull out money.
Before he left AMD's CEO job last year, Ruiz was only the second person to run the company other than founder and longtime CEO Jerry Sanders and was one of the few Hispanic CEOs of a major U.S. corporation. Ruiz, now 63, left amid mounting investor frustration over AMD's finances. He was instrumental in orchestrating a fix: the spinoff of AMD's manufacturing operations into a company called GlobalFoundries Inc, of which he is now chairman.
A GlobalFoundries spokesman would say only that the allegations predate the company's launch. AMD, which had $5.8 billion in revenue last year,
is small compared to its rival Intel Corp., but is significant because it is the world's No. 2 maker of microprocessors. Microprocessors are the "brains" of personal computers. Intel owns about 80 percent of that market — AMD essentially has the rest.
Before word of Ruiz's possible involvement surfaced, the highest-ranking corporate executive ensnared in the insider-trading scheme was an IBM Corp senior vice president, Robert Moffat, who was once considered a possible candidate for CEO. Moffat was put on leave after the allegations surfaced and no longer serves as an officer of the company. Moffat is accused of leaking secrets about IBM's earnings and financial dealings with partners, including AMD.
That information allegedly included AMD's plans for GlobalFoundries. IBM was involved in those talks because it has a technology development partnership with AMD.
The indictment against Moffat and the person he's accused of supplying information to, Chiesi, says that an AMD executive also provided inside information to Chiesi, but that executive is not named.
The indictment quotes Chiesi allegedly boasting in wiretapped calls that she spoke multiple times with the AMD executive about the deal. The indictment quotes the AMD executive in multiple calls to Chiesi describing the timing and financial details of the deal, such as what would happen with AMD's debt under the new structure. In one call, on Sept. 16, 2008, the AMD executive was quoted as saying the spinoff wouldn't be announced until the following month and that it was going to "shock the hell out of everybody."
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