Bombardier, the world’s third biggest aircraft maker, has invited tech vendors to bid for an outsourcing contract potentially worth up to $200 million over next few years, as the company seeks to increase outsourcing of design projects in order to lower its operational costs.
While Mahindra Satyam and Capgemini already work with Bombardier and are in discussions with the aircraft maker for this contract, India’s second biggest software exporter Infosys and smaller rival QuEST Global are also pursuing this opportunity.
The contract will involve engineering design projects for Bombardier’s CSeries jetliners being procured by Lease Corp. International Aviation and Lufthansa are in transactions worth over $3 billion.
From around $1.8 billion currently, India’s engineering services outsourcing (ESO) market is expected to reach $50 billion over the next ten years as more aviation and manufacturing companies seek to lower their design costs by outsourcing to the country.
When contacted, a Bombardier spokesperson declined to provide any specific details of this contract. “Bombardier Aerospace is active in India through associations with Capgemini and Mahindra Satyam in Bangalore since 2005. Bombardier Aerospace in its normal course of business continues to hold exploratory discussions with several entities located around the world to address various business opportunities,” said Marc Duchesne, Manager, Public Affairs & Senior spokesperson, Bombardier Aerospace.
Apart from smaller focused firms such as Infotech Enterprises and QuEST Global, large Indian software firms including TCS, Infosys and HCL have been attempting to increase their revenues from aviation design projects.
While Infosys would not comment on any specific customer, a person familiar with the company’s strategies told on conditions of anonymity that Infosys is among vendors bidding for the Bombardier contract. “Infosys is in conversation with Bombardier which is the main OEM among the four to five big players in this market. Bombardier’s future road map is throwing up an enormous potential as they have formed the blueprint for C-Series,” he said.
Companies such as Infosys now want a bigger pie of the outsourcing contract, which will include some portion of mechanical engineering design work as well.
“Bombardier is looking for design work for metallic and composite structures to be done in India which also includes work like floor panels, la
nding gears, doors, fuselage, wings. Infosys is looking for complete package rather then doing work for one part or another,” the person added.
Aviation customers are increasingly looking at sourcing design and other IT projects from India not necessarily for cost savings, but also because the country offers a pool of skilled engineers who understand complex avionics.
“QuEST Global has typically provided our customers with cost savings from 20% to 40%, in business models where we setup a dedicated engineering team for them consisting of at least 20-25 engineers providing a similar range of services. These kind of cost savings can be achieved in a period of 18 to 24 months from the setup of operations,” said Bejoy George, chief marketing officer of QuEST.
Two of the world’s biggest aircraft makers Airbus and Boeing have been outsourcing to India-based vendors over past many years. Boeing awarded a deal to HCL Technologies to develop software for its 787 Dreamliner and has also formed collaborations with several institutions such as IISc, IIT and National Aeronautical Laboratory, for development of futuristic aerospace technology.
Hindustan Aeronautics Limited (HAL) is developing components for Airbus’s A380, including the doors. QuEST on other hand is making the components that go in to the landing gears of aircraft’s made by Airbus and Boeing.
Friday, August 21, 2009
IT market
Google to predict hot searches
Google has developed a formula to predict hot online search topics in what promises to be a boon for businesses eager to target ads that accompany Internet search results.
Engineers in Google's lab in Israel came up with a forecasting model while studying whether past and current search patterns hold reliable clues to what people will seek online in months to come.
The findings resulted in a new forecasting feature added this week to Insights for Search at Google.
"We see that many search trends are predictable," Yossi Matias, Niv Efron, and Yair Shimshoni of Google Labs in Israel wrote in a message at the California Internet titan's website.
"We characterize the predictability of a Trends series based on its historical performance."
Google Trends is a free online service that shows what search subjects are gaining or sinking in popularity. Insights for Search uses the same data but is geared for advertisers or researchers who want to dig deeper.
More than half of the most popular search queries at Google are predictable as far as a year ahead, with a margin of error of about 12 percent, according to the Israel lab engineers.
Categories such as health, travel, and food and drink are particularly predictable, while searches regarding entertainment and social networks have proven harder to foresee, the team said.
Engineers in Google's lab in Israel came up with a forecasting model while studying whether past and current search patterns hold reliable clues to what people will seek online in months to come.
The findings resulted in a new forecasting feature added this week to Insights for Search at Google.
"We see that many search trends are predictable," Yossi Matias, Niv Efron, and Yair Shimshoni of Google Labs in Israel wrote in a message at the California Internet titan's website.
"We characterize the predictability of a Trends series based on its historical performance."
Google Trends is a free online service that shows what search subjects are gaining or sinking in popularity. Insights for Search uses the same data but is geared for advertisers or researchers who want to dig deeper.
More than half of the most popular search queries at Google are predictable as far as a year ahead, with a margin of error of about 12 percent, according to the Israel lab engineers.
Categories such as health, travel, and food and drink are particularly predictable, while searches regarding entertainment and social networks have proven harder to foresee, the team said.
NRIs, Outsourcing, Recession
Indian IT companies may have to hire more UK staff
UK, one of the top export markets for India’s over $40-billion software industry, is evaluating stricter immigration rules proposed by the Migration Advisory Committee (MAC) after several British trade lobbyists and workers alleged that Indian tech firms are replacing local workers with overseas staff at lower salary levels.
Top Indian tech firms including TCS, Infosys, Wipro and Tech Mahindra serve British customers such as BT, British Petroleum and British Airways by sending Indian professionals to the country on short-term project assignments. With more stringent norms, these companies may have to employ more local UK workers instead of sending their Indian staff for onsite projects.
Anti-offshoring lobbies including Unite and the Association of Professional Staffing Companies (APSCo) allege that Indian tech firms are misusing the ‘intra-company-transfer’ rules by replacing UK workers at wages lower than prescribed levels in the country.
The MAC report submitted by the committee’s chairman Professor David Metcalf to UK’s Home Office on Wednesday has recommended that the threshold salary levels for allowing entry of a graduate skilled worker be raised from around £17,000 currently, making it tougher to earn points needed for allocation of work permits.
“We believe that the earnings thresholds should rise in line with earnings inflation. We recommend raising the minimum threshold for gaining 10 points to £24,000 per annum, and raising the minimum threshold for gaining 15 points to £28,000 per annum,” the MAC report added. These figures compare to £20,000 and £22,000, respectively, under the current system.
Last year, UK granted around 45,766 work permits to workers coming to the country through intra-company-transfer route, a majority of them awarded to the IT professionals. The majority of intracompany transfers are for Indian nationals, who account for 69% of the permits granted through this route.
Almost half (48%) of intra-company transfers are for Indian nationals in just one occupation — software professionals . “Companies are even allowed to pay these workers offshore in foreign currencies, so intra company transfers are potentially very easy to exploit in order to bring cheap foreign labour into the UK,” Ann Swain, chief executive of APSCo said in a recent statement.
Nasscom, the Indian software industry lobby, said the recommendations will help fix the loopholes in the system. “There were some cases of abuse reported in the past and the new norms ensure compliance to guidelines and there is a system in place to audit the visa process,” said Som Mittal, president of Nasscom. “The issue of salary — at least £20,000 a year as minimum wage for an employee going to the UK is also acceptable as less than 0.2% of the current ICT employees going to the UK are at a salary less than that. This measure has been put in place to check abuse,” he added.
The report also recommends that migrants coming to UK under intracompany-transfer route cannot have a right to permanent residence. “Because the intra-company transfer route exists to facilitate temporary immigration to the UK, we recommend that time spent in the UK under this route does not lead to a right to permanent residence,” the report said. Under the current rules, after five years of working in the UK on the intra-company transfer route or any other route under tier-II, it is possible to be granted permanent residence.
Meanwhile, Indian IT workers in UK feel such recommendations are not required. “Tier-II visas without the right to settlement will lead to exploitation of skilled professionals who will have to pay taxes but will not be able to settle in the UK,” said Amit Kapadia, executive director of the Highly Skilled Migrant Programme (HSMP) Forum in UK. “In recommending so we believe the MAC has gone beyond its scope in answering the questions which were raised by the then home secretary Jackie Smith,” he added.
Experts such as Bob McDowall, who is the research director with Tower-Group said these allegations are true. “The wages are lower than the UK minimum wage, though there remains a substantial cost of living differential between India and the UK,” he said. The backlash, according to him, is set to gain more momentum because of the rising unemployment. Moreover, IT workers coming to UK for short-term projects will also need to have more work experience. “To ensure that the route allows only people with company-specific expertise to come to the UK, we believe that the qualifying period with the company overseas should be doubled from the current six months to 12 months.”
However, MAC’s recommendations are pure advisory and the Home Office may or may not accept them. “We need to remember that these are recommendations at this stage and the government is considering the report before responding formally. No decisions have been taken and it’s too early to speculate on the government’s response ,” Chris Dix, regional director South Asia and the Gulf, UK Border Agency, told ET on Thursday.
Source: EconomicTimes
Top Indian tech firms including TCS, Infosys, Wipro and Tech Mahindra serve British customers such as BT, British Petroleum and British Airways by sending Indian professionals to the country on short-term project assignments. With more stringent norms, these companies may have to employ more local UK workers instead of sending their Indian staff for onsite projects.
Anti-offshoring lobbies including Unite and the Association of Professional Staffing Companies (APSCo) allege that Indian tech firms are misusing the ‘intra-company-transfer’ rules by replacing UK workers at wages lower than prescribed levels in the country.
The MAC report submitted by the committee’s chairman Professor David Metcalf to UK’s Home Office on Wednesday has recommended that the threshold salary levels for allowing entry of a graduate skilled worker be raised from around £17,000 currently, making it tougher to earn points needed for allocation of work permits.
“We believe that the earnings thresholds should rise in line with earnings inflation. We recommend raising the minimum threshold for gaining 10 points to £24,000 per annum, and raising the minimum threshold for gaining 15 points to £28,000 per annum,” the MAC report added. These figures compare to £20,000 and £22,000, respectively, under the current system.
Last year, UK granted around 45,766 work permits to workers coming to the country through intra-company-transfer route, a majority of them awarded to the IT professionals. The majority of intracompany transfers are for Indian nationals, who account for 69% of the permits granted through this route.
Almost half (48%) of intra-company transfers are for Indian nationals in just one occupation — software professionals . “Companies are even allowed to pay these workers offshore in foreign currencies, so intra company transfers are potentially very easy to exploit in order to bring cheap foreign labour into the UK,” Ann Swain, chief executive of APSCo said in a recent statement.
Nasscom, the Indian software industry lobby, said the recommendations will help fix the loopholes in the system. “There were some cases of abuse reported in the past and the new norms ensure compliance to guidelines and there is a system in place to audit the visa process,” said Som Mittal, president of Nasscom. “The issue of salary — at least £20,000 a year as minimum wage for an employee going to the UK is also acceptable as less than 0.2% of the current ICT employees going to the UK are at a salary less than that. This measure has been put in place to check abuse,” he added.
The report also recommends that migrants coming to UK under intracompany-transfer route cannot have a right to permanent residence. “Because the intra-company transfer route exists to facilitate temporary immigration to the UK, we recommend that time spent in the UK under this route does not lead to a right to permanent residence,” the report said. Under the current rules, after five years of working in the UK on the intra-company transfer route or any other route under tier-II, it is possible to be granted permanent residence.
Meanwhile, Indian IT workers in UK feel such recommendations are not required. “Tier-II visas without the right to settlement will lead to exploitation of skilled professionals who will have to pay taxes but will not be able to settle in the UK,” said Amit Kapadia, executive director of the Highly Skilled Migrant Programme (HSMP) Forum in UK. “In recommending so we believe the MAC has gone beyond its scope in answering the questions which were raised by the then home secretary Jackie Smith,” he added.
Experts such as Bob McDowall, who is the research director with Tower-Group said these allegations are true. “The wages are lower than the UK minimum wage, though there remains a substantial cost of living differential between India and the UK,” he said. The backlash, according to him, is set to gain more momentum because of the rising unemployment. Moreover, IT workers coming to UK for short-term projects will also need to have more work experience. “To ensure that the route allows only people with company-specific expertise to come to the UK, we believe that the qualifying period with the company overseas should be doubled from the current six months to 12 months.”
However, MAC’s recommendations are pure advisory and the Home Office may or may not accept them. “We need to remember that these are recommendations at this stage and the government is considering the report before responding formally. No decisions have been taken and it’s too early to speculate on the government’s response ,” Chris Dix, regional director South Asia and the Gulf, UK Border Agency, told ET on Thursday.
Source: EconomicTimes
Layoffs in USA, Recession
New US jobless claims unexpectedly rise last week
The number of US workers filing new claims for jobless benefits unexpectedly rose last week, a government report showed on Thursday, as companies continued to cut payrolls amid uncertainty over the economic outlook.
Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended August 15 from 561,000 the prior week, the Labor Department said.
Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000. A Labor Department official said there were no special factors influencing the report.
The number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended August 8, the latest week for which the data is available. However, the four-week moving average declined 2,500 to 6.27 million.
The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, was unchanged at 4.7 percent.
The four-week moving average for new claims climbed 4,250 to 570,000 last week. The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility.
Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended August 15 from 561,000 the prior week, the Labor Department said.
Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000. A Labor Department official said there were no special factors influencing the report.
The number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended August 8, the latest week for which the data is available. However, the four-week moving average declined 2,500 to 6.27 million.
The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, was unchanged at 4.7 percent.
The four-week moving average for new claims climbed 4,250 to 570,000 last week. The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility.
IT market
Nokia eyes top slot in software
Nokia, the world’s largest cell phone maker, now wants to be a global leader in new technologies by offering software and solutions to its 1.5 billion handset users across the world, the Finnish firm’s global CEO Olli-Pekka Kallasvuo said here on Wednesday.
Software and solutions will be the next frontier as customers now look for more than a handset, said Kallasvuo who is touring India to chair the jury for The Economic Times Awards for Corporate excellence.
“We are investing heavily in services such as navigation, music, media, messaging and internet on mobiles. None of our competitors have articulated such an entry into the solutions market.”
He said Nokia is “taking a keen look” at Netbooks – small, light portable computers used for accessing internet that have become immensely popular – but did not confirm if the company will start making them.
Kallasvuo said Indians are rapidly lapping up Nokia’s new applications. India is among the top five countries in terms of downloads from Ovi Store, Nokia’s online software and content store, launched in May 2009 in response to the success of Apple Inc’s App Store.
Nokia will soon launch a new scheme, ‘Comes With Music’, where customers buying handsets could avail unlimited music downloads for a year on their mobiles as well as computers.
Software and solutions will be the next frontier as customers now look for more than a handset, said Kallasvuo who is touring India to chair the jury for The Economic Times Awards for Corporate excellence.
“We are investing heavily in services such as navigation, music, media, messaging and internet on mobiles. None of our competitors have articulated such an entry into the solutions market.”
He said Nokia is “taking a keen look” at Netbooks – small, light portable computers used for accessing internet that have become immensely popular – but did not confirm if the company will start making them.
Kallasvuo said Indians are rapidly lapping up Nokia’s new applications. India is among the top five countries in terms of downloads from Ovi Store, Nokia’s online software and content store, launched in May 2009 in response to the success of Apple Inc’s App Store.
Nokia will soon launch a new scheme, ‘Comes With Music’, where customers buying handsets could avail unlimited music downloads for a year on their mobiles as well as computers.
Thursday, August 20, 2009
new openings, Outsourcing
CA to increase R&D headcount by 1,000
CA India, the domestic arm of global information technology giant CA, is ramping up operations at its India Technology Centre (ITC). The campus, which has the capacity to house 1,500 employees at present, wou-ld be expanded to accommodate 2,500 people in the coming three years.
The ITC, which was set up in 2004 as a cost cutting initiative, has emerged as the premier research and development (R&D) centre for CA. Presently, the unit is responsible for 28 per cent of all R&D work taking place in the company. This figure is set to rise to 70 per cent over the next three to five years, according to William Bauman, senior vice-president and general manager.
“Like all multi-national IT companies, we had started our India operations to reduce costs. But over the last five years, operations here have come a long way and are making major contributions to the overall R&D in the company,” he told Financial Chronicle.
CA spends about $700 million designing and supporting software that will govern, manage and secure IT environments. The company invests about 20 per cent of its revenue in R&D. “More than 25 per cent of CA’s globally-distributed R&D workforce is already in India. With an additional 1,000 people this percentage will grow to over the global tech industry R&D average,” Bauman claimed.
A total of 43 ideas were gathered from various CA centres all over the world by July 2009, of which seven were shortlisted for integrating with the company’s existing products. The company also decided to fund two more ideas which could be translated into separate business plans.
Bauman asserts that the success of the ITC project shows how effective outsourcing of IT talent has been for US IT majors. He believes that the profits made by American companies through outsourcing would defeat any protectionist policies that the present government may be planning to implement.
“Talking of moving jobs to Buffalo from Bangalore may sound nice. But one has to consider if Buffalo has the same kind of IT manpower to take care of US companies’ IT requirements,” Bauman sums up.
The ITC, which was set up in 2004 as a cost cutting initiative, has emerged as the premier research and development (R&D) centre for CA. Presently, the unit is responsible for 28 per cent of all R&D work taking place in the company. This figure is set to rise to 70 per cent over the next three to five years, according to William Bauman, senior vice-president and general manager.
“Like all multi-national IT companies, we had started our India operations to reduce costs. But over the last five years, operations here have come a long way and are making major contributions to the overall R&D in the company,” he told Financial Chronicle.
CA spends about $700 million designing and supporting software that will govern, manage and secure IT environments. The company invests about 20 per cent of its revenue in R&D. “More than 25 per cent of CA’s globally-distributed R&D workforce is already in India. With an additional 1,000 people this percentage will grow to over the global tech industry R&D average,” Bauman claimed.
A total of 43 ideas were gathered from various CA centres all over the world by July 2009, of which seven were shortlisted for integrating with the company’s existing products. The company also decided to fund two more ideas which could be translated into separate business plans.
Bauman asserts that the success of the ITC project shows how effective outsourcing of IT talent has been for US IT majors. He believes that the profits made by American companies through outsourcing would defeat any protectionist policies that the present government may be planning to implement.
“Talking of moving jobs to Buffalo from Bangalore may sound nice. But one has to consider if Buffalo has the same kind of IT manpower to take care of US companies’ IT requirements,” Bauman sums up.
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