IBM Corp. is trying to stymie Google Inc.'s expansion into the business software market. IBM is now selling a bare-bones e-mail service to companies for $36 annually per worker, undercutting a more comprehensive package of software applications that Google sells for $50 per user annually.
For that slightly higher price, Google is offering 25 times more storage: 25 gigabytes per account compared to IBM's 1 gigabyte per mailbox. Google also throws in word processing, spreadsheet and presentation applications, as well as a video channel. None of those features are included in IBM's package.
Even so, IBM believes its service, called LotusLive iNotes, can beat Google because it has a much larger sales force and relationships with corporate customers going back long before Google co-founders Larry Page and Sergey Brin were even born in 1973.
"This is trouble for Google," said Gartner Inc analyst Matthew Cain.
IBM is responding to the increasing corporate demand for inexpensive e-mail that's run on computers owned by an external supplier instead of the company relying on the service. This approach has become trendy enough to get its own catch phrase -- "cloud computing."
Google has emerged as one of cloud computing's chief boosters as it tries to generate more revenue from sources besides its dominant Internet search engine, which serves as the hub of the Web's most profitable advertising network.
After finding little initial success when it began peddling corporate e-mail in early 2007, Google's sales pitch has been resonating with more companies looking for ways to save money.
Other e-mail providers also are making inroads with similar discount services, so much so that the technology research firm Gartner Inc predicts about 20 percent of US companies will run at least some of their e-mail through Web browsers by 2012.
Without providing specifics, Google says its corporate users now number in the ``hundreds of thousands.'' Some companies, including Fairchild Semiconductor International Inc, switched from IBM's premium e-mail service that costs substantially more than Web-based e-mail.
Now, IBM is counter-punching. IBM thinks the timing for its e-mail alternative is ideal, given that Google's service suffered a highly publicized outage that locked out corporate customers for nearly two hours last month.
"Candidly, Google has shown itself to be weak" in some areas of e-mail, said Sean Poulley, an IBM executive overseeing the company's e-mail service. "There is a world of difference between supporting a consumer-grade service and a business-grade service."
Dave Girouard, who oversees Google's e-mail and other services tailored for companies, responded that Google will learn the ins and outs of selling software to businesses more quickly than IBM will adapt to cloud computing. He said Google isn't planning to lower its prices.
What's more, IBM probably will face some of the same financial conflicts confronting any long-established vendor trying to cater to a new, less expensive niche in its market. IBM and other rivals, such as Microsoft Corp, stand to make more money selling more sophisticated e-mail services and software applications that are installed in the computers maintained by the customers.
That means IBM runs the risk of making less money if most of its customers switch to the newer approach, with e-mail hosted off their premises. But by keeping the storage limits relatively low and skimping on other e-mail features, IBM has narrowed the field of businesses likely to buy the service. IBM expects the customers to include small and medium-sized businesses, or larger companies whose employees who aren't tethered to an office desk.
Monday, October 5, 2009
Friday, October 2, 2009
Accenture, Recession
Accenture profit falls, sees FY 2010 recovery
Technology outsourcing and consulting firm Accenture Plc reported a fall in quarterly profit on Thursday, but gave a stronger-than-expected outlook for the fiscal year that began in September, supporting the view that corporate spending was recovering.
Accenture's diluted net income for its fiscal fourth quarter ended Aug. 31 fell to $301.4 million, or 39 cents a share, from $543.1 million, or 67 cents a share, in the year-ago period. Excluding restructuring charges, earnings fell to 63 cents a share, which was in line with the average analyst forecast according to Reuters Estimates.
For fiscal 2010, the company forecast earnings per share of $2.64 to $2.72, compared with $2.44 in the previous year. Analysts had expected $2.75, according to Reuters Estimates. Accenture has fared relatively well amid a global economic slowdown due to solid demand for its outsourcing services, but many customers have been slowing the pace of ongoing projects and deferring large commitments to consulting projects.
Accenture's diluted net income for its fiscal fourth quarter ended Aug. 31 fell to $301.4 million, or 39 cents a share, from $543.1 million, or 67 cents a share, in the year-ago period. Excluding restructuring charges, earnings fell to 63 cents a share, which was in line with the average analyst forecast according to Reuters Estimates.
For fiscal 2010, the company forecast earnings per share of $2.64 to $2.72, compared with $2.44 in the previous year. Analysts had expected $2.75, according to Reuters Estimates. Accenture has fared relatively well amid a global economic slowdown due to solid demand for its outsourcing services, but many customers have been slowing the pace of ongoing projects and deferring large commitments to consulting projects.
H1-B, NRIs, Recession
More than 18,000 H-1B visas yet to be grabbed
Reflecting the dire straits of the US job market and strict regulations imposed by the Congress, over 18,000 of the H-1B visas, once the most sought after by Indian professionals, is yet to be grabbed.
According to the latest figure update by US Citizenship and Immigration Services (USCIS), approximately 46,700 of the H-1B visas in the general category were filled up by September 25; against a Congressional mandated figure of 65,000.
Thus, more than 18,000 H-1B visas or over one-fourth of the slot are still to be filled up, even as the financial year began today.
Primarily meant for professionals from computers and information technology sectors, the H-1B visas have been one of the most sought after visas for foreign professionals in previous years. The US Citizenship and immigration Service (USCIS) have been receiving several times the number of the allocated quota.
However, this is for the first time in several years that thousands of H-1B visas are still to be filled up even at the start of the financial year.
This is unlike the previous years when the entire 65,000 visas were grabbed on day one. Many a times, the USCIS had to resort to a computerised lottery to determine the successful candidates.
According to the latest figure update by US Citizenship and Immigration Services (USCIS), approximately 46,700 of the H-1B visas in the general category were filled up by September 25; against a Congressional mandated figure of 65,000.
Thus, more than 18,000 H-1B visas or over one-fourth of the slot are still to be filled up, even as the financial year began today.
Primarily meant for professionals from computers and information technology sectors, the H-1B visas have been one of the most sought after visas for foreign professionals in previous years. The US Citizenship and immigration Service (USCIS) have been receiving several times the number of the allocated quota.
However, this is for the first time in several years that thousands of H-1B visas are still to be filled up even at the start of the financial year.
This is unlike the previous years when the entire 65,000 visas were grabbed on day one. Many a times, the USCIS had to resort to a computerised lottery to determine the successful candidates.
IT market, Outsourcing
Mphasis eyes $1 billion in revenues
Mphasis, an HP-EDS owned mid tier services firm plans to achieve around $1 billion in revenues over next few years by growing its business from customers such as AIG, and working more closely with parent for bigger, multi-year outsourcing contracts.
Having reported around Rs 1,105.6 crore in revenues during third quarter ended July 31 this year, Mphasis has been rationalising its costs and working towards building a healthier cash flow.
“We had begun the year with around $10-15 million in cash, however by third quarter, we had cash of almost $100 million,” Ganesh Ayyar, chief executive of Mphasis said in an interview. His company’s first goal is to achieve around $250 million in quarterly revenues, Mr Ayyar added.
One of the first things Mphasis pursued after achieving healthy cash balance was to seek strategic acquisitions such as AIG’s captive back office business AIG Systems Solutions (AIGSS) for gaining more domain expertise in areas of finance and insurance. ”AIG brought expertise in retirement and auto insurance, which we did not have, and helped us become a stronger player in the insurance domain,” he added.
Mphasis derives around 40% of its revenues from the banking and financial services industry (BFSI). The AIGSS acquisition also brought around 800 employees with expertise in insurance business.
However, unlike recent captive transactions such as Citi’s captive unit sale to TCS and Wipro where revenues were ensured, the AIG transaction does not promise any assured revenues for Mphasis.
“There is no exclusivity pact in the contract, we had and have better faith in the customer even without any legal commitment for business,” Mr Ayyar said.
Earlier this year, Mphasis also decided to bring down its operational costs by rationalising bench strength, utilisation rates and real estate.
“We looked at the entire cost management process and had very detailed performance dashboards for everybody-in fact we also requested our entire workforce to save $1 every day,” said Mr Ayyar.
When orders were hard to come by few months ago, many companies such as Mphasis were forced to rationalise their payroll costs and explore many cost saving options. One of the biggest challenges for a software services company is to ensure that new hires and those on bench start contributing to the revenues early.
“We did not cut salaries or undertake any retrenchment,” said Mr Ayyar.
Mphasis shortened the entire cycle of hiring a new recruit to the time the person actually starts contributing to the revenues by as much as 60% in some businesses.
Meanwhile, the company would pursue acquisitions similar to AIGSS) in order to achieve growth. “There are certain areas where we have no choice but to go and buy, but it’s more about the ability to do it than appetite,” he said.
EDS, now an HP company, had acquired 52% stake in Mphasis in June 2006 for nearly $380 million. Mphasis shares closed at Rs 665.75 on BSE on Wednesday.
Having reported around Rs 1,105.6 crore in revenues during third quarter ended July 31 this year, Mphasis has been rationalising its costs and working towards building a healthier cash flow.
“We had begun the year with around $10-15 million in cash, however by third quarter, we had cash of almost $100 million,” Ganesh Ayyar, chief executive of Mphasis said in an interview. His company’s first goal is to achieve around $250 million in quarterly revenues, Mr Ayyar added.
One of the first things Mphasis pursued after achieving healthy cash balance was to seek strategic acquisitions such as AIG’s captive back office business AIG Systems Solutions (AIGSS) for gaining more domain expertise in areas of finance and insurance. ”AIG brought expertise in retirement and auto insurance, which we did not have, and helped us become a stronger player in the insurance domain,” he added.
Mphasis derives around 40% of its revenues from the banking and financial services industry (BFSI). The AIGSS acquisition also brought around 800 employees with expertise in insurance business.
However, unlike recent captive transactions such as Citi’s captive unit sale to TCS and Wipro where revenues were ensured, the AIG transaction does not promise any assured revenues for Mphasis.
“There is no exclusivity pact in the contract, we had and have better faith in the customer even without any legal commitment for business,” Mr Ayyar said.
Earlier this year, Mphasis also decided to bring down its operational costs by rationalising bench strength, utilisation rates and real estate.
“We looked at the entire cost management process and had very detailed performance dashboards for everybody-in fact we also requested our entire workforce to save $1 every day,” said Mr Ayyar.
When orders were hard to come by few months ago, many companies such as Mphasis were forced to rationalise their payroll costs and explore many cost saving options. One of the biggest challenges for a software services company is to ensure that new hires and those on bench start contributing to the revenues early.
“We did not cut salaries or undertake any retrenchment,” said Mr Ayyar.
Mphasis shortened the entire cycle of hiring a new recruit to the time the person actually starts contributing to the revenues by as much as 60% in some businesses.
Meanwhile, the company would pursue acquisitions similar to AIGSS) in order to achieve growth. “There are certain areas where we have no choice but to go and buy, but it’s more about the ability to do it than appetite,” he said.
EDS, now an HP company, had acquired 52% stake in Mphasis in June 2006 for nearly $380 million. Mphasis shares closed at Rs 665.75 on BSE on Wednesday.
Infosys, IT market, New Deals, Outsourcing, TCS, Wipro
TCS, Wipro, Infosys vie deals worth $100 mn each in Nordic region
Nordea AB, the biggest regional bank in the Nordic region, along with peers Svenska Handelsbanken and SEB, are among a new set of customers planning to offshore technology work to India, as they aim to bring down operational costs by up to 30% and cope with the slump more effectively.
Indian tech vendors such as TCS, HCL, L&T Infotech, Wipro, Infosys and Cognizant are in discussion with Nordic customers for outsourcing contracts potentially worth around $100 million each over next few years.
Outsourcing advisory firm EquaTerra recently analysed around 370 outsourcing contracts signed by over 200 Nordic customers and concluded that the Indian service providers scored better than European vendors such as TietoEnator and Capgemini when it came to customer satisfaction. EquaTerra analysed almost $4.3 billion worth of outsourcing contracts signed by these customers.
Most Nordic countries, especially Sweden, have high cost structures. This is putting pressure on local customers to seek low-cost resources in locations like India, which will help them tighten belts by up to 30-40 %.
“India remains the dominant offshore destination for Nordics firms. 61% of the respondents are using India to fulfill at least some of their global sourcing needs,” EquaTerra said in a recent report. When contacted by ET, Indian tech vendors declined to comment on any potential outsourcing contract being pursued by them.
TCS, India’s biggest software outsourcing firm, said Nordic customers are indeed beginning to explore more outsourcing options.
“While the overall Nordic IT market is expected to remain flat in 2009, the demand for services outsourcing continues to be firm and we are seeing continued growth,” said AS Lakhminarayanan, vice-president and head(Europe), TCS. “Norway in particular is expected to demonstrate one of the highest IT market growth rates in Europe in 2009, estimated at between 1-2 % annually, while most other markets have remained flat or even declined,” he added.
Customers such as Handelsbanken have been exploring offshoring of IT work for almost a year, and a worsening economic crisis forced them to look at offshoring more seriously.
The bank is now seeking suppliers for maintaining its legacy mainframe systems, and also make them work with newer business software applications. Nordic customers prefer to start an outsourcing engagement with smaller contracts of $10-20 million, but are expected to ramp up after experiencing the promised benefits.
Unlike other European markets such as Germany where labour laws make it difficult for an offshoring contract, countries in the Nordic region are more flexible.
However, they still prefer to exercise caution during early relationships without succumbing to doling out multi-year, mega outsourcing contracts. “If you look at the last 100 deals signed over the past six to eight months, you would find that they range from € 500,000 to € 150 million, which is a broad range. The most significant deal size segment, in terms of frequency, would lie in the range of € 8-20 million,” agreed Mr Lakhminarayanan.
Indian tech vendors such as TCS, HCL, L&T Infotech, Wipro, Infosys and Cognizant are in discussion with Nordic customers for outsourcing contracts potentially worth around $100 million each over next few years.
Outsourcing advisory firm EquaTerra recently analysed around 370 outsourcing contracts signed by over 200 Nordic customers and concluded that the Indian service providers scored better than European vendors such as TietoEnator and Capgemini when it came to customer satisfaction. EquaTerra analysed almost $4.3 billion worth of outsourcing contracts signed by these customers.
Most Nordic countries, especially Sweden, have high cost structures. This is putting pressure on local customers to seek low-cost resources in locations like India, which will help them tighten belts by up to 30-40 %.
“India remains the dominant offshore destination for Nordics firms. 61% of the respondents are using India to fulfill at least some of their global sourcing needs,” EquaTerra said in a recent report. When contacted by ET, Indian tech vendors declined to comment on any potential outsourcing contract being pursued by them.
TCS, India’s biggest software outsourcing firm, said Nordic customers are indeed beginning to explore more outsourcing options.
“While the overall Nordic IT market is expected to remain flat in 2009, the demand for services outsourcing continues to be firm and we are seeing continued growth,” said AS Lakhminarayanan, vice-president and head(Europe), TCS. “Norway in particular is expected to demonstrate one of the highest IT market growth rates in Europe in 2009, estimated at between 1-2 % annually, while most other markets have remained flat or even declined,” he added.
Customers such as Handelsbanken have been exploring offshoring of IT work for almost a year, and a worsening economic crisis forced them to look at offshoring more seriously.
The bank is now seeking suppliers for maintaining its legacy mainframe systems, and also make them work with newer business software applications. Nordic customers prefer to start an outsourcing engagement with smaller contracts of $10-20 million, but are expected to ramp up after experiencing the promised benefits.
Unlike other European markets such as Germany where labour laws make it difficult for an offshoring contract, countries in the Nordic region are more flexible.
However, they still prefer to exercise caution during early relationships without succumbing to doling out multi-year, mega outsourcing contracts. “If you look at the last 100 deals signed over the past six to eight months, you would find that they range from € 500,000 to € 150 million, which is a broad range. The most significant deal size segment, in terms of frequency, would lie in the range of € 8-20 million,” agreed Mr Lakhminarayanan.
H1-B, IT market, NRIs
Over 2000 IITians to unleash skilled India through PanIIT
More than 2000 IITians are expected to attend the largest entrepreneurship conference of PanIIT, to be held in Chicago from October 9 to October 11, 2009. PanIIT aims to be a platform to provide networking opportunities for IITians, contribute proactively to nation building and enhance the IIT brand.
The importance of PAN IIT, which represents alumni from all IIT campuses, in the U.S. can be seen as around 60 percent of Silicon Valley startups have at least one IIT graduate in the founder's rank. "In 2007, CBS 60 minutes brought the IIT brand front and center, and in 2005, the U.S. Congress had honoured the alumni for their contributions to the U.S. economy," says Piyush Agrawal, Spokesperson, PanIIT.
The worthy names of the industry will gather at this conference to discuss the different issues, the world is facing today. To add value to the conference and reflecting IIT's status across the world, former U.S. President Bill Clinton will join the IITians to share his views. The former president will address the gathering about challenges and opportunities in today's key global issues such as public health, education, and climate change with a focus on transforming ideas into action.
This seventh Global Alumni conference of PanIIT, will acknowledge the importance of 'Entrepreneurship and Innovation in a Global Economy'. The event will see business leaders from leading corporations delivering their experiences in the line of entrepreneurship. The Indian origin, U.S. Federal Chief Technology Officer (CTO) Aneesh Chopra, will deliver the keynote address at the conference which will be opened by India's Minister for Human Resource Development, Kapil Sibal. The other keynote speakers will include Nathan Myhrvold, CEO, Intellectual Ventures and Founder of Microsoft Research, Carl Schramm, President and CEO, Kauffman Foundation, Jim Owens, Chairman and CEO, Caterpillar and Jim Rogers, Chairman and CEO, Duke Energy.
The winners of 2009 PanIIT award have been selected from over 200 nominees by a panel of luminary judges. The Lifetime Achievement Award will be awarded to Dr. (Late) Rajeev Motwani, who was an advisor to Google founders Sergery Brin, Larry Page and many more. The Academic Excellence Award will be given to Dr. Pradeep Khosla, Dean, College of Engineering, Carnegie Mellon, the Corporate Excellence Award to Padmasree Warrior, Chief Technology Officer, Cisco. Dr. Suhas Patil, Chairman, Emeritus Cirrus Logicand Chairman, Digite and Cradle Technologies will be awarded the Entrepreneurial Achievement Award and the Technology Leadership Award will be given to Dr. Ravi Sethi, President, Avaya Labs. "These individuals have helped to make the IITs in India one of the most elite educational institutions in the world today," said Umang Gupta, Co-Chairman, Board of Directors, PanIIT and CEO, Keynote Systems.
The importance of PAN IIT, which represents alumni from all IIT campuses, in the U.S. can be seen as around 60 percent of Silicon Valley startups have at least one IIT graduate in the founder's rank. "In 2007, CBS 60 minutes brought the IIT brand front and center, and in 2005, the U.S. Congress had honoured the alumni for their contributions to the U.S. economy," says Piyush Agrawal, Spokesperson, PanIIT.
The worthy names of the industry will gather at this conference to discuss the different issues, the world is facing today. To add value to the conference and reflecting IIT's status across the world, former U.S. President Bill Clinton will join the IITians to share his views. The former president will address the gathering about challenges and opportunities in today's key global issues such as public health, education, and climate change with a focus on transforming ideas into action.
This seventh Global Alumni conference of PanIIT, will acknowledge the importance of 'Entrepreneurship and Innovation in a Global Economy'. The event will see business leaders from leading corporations delivering their experiences in the line of entrepreneurship. The Indian origin, U.S. Federal Chief Technology Officer (CTO) Aneesh Chopra, will deliver the keynote address at the conference which will be opened by India's Minister for Human Resource Development, Kapil Sibal. The other keynote speakers will include Nathan Myhrvold, CEO, Intellectual Ventures and Founder of Microsoft Research, Carl Schramm, President and CEO, Kauffman Foundation, Jim Owens, Chairman and CEO, Caterpillar and Jim Rogers, Chairman and CEO, Duke Energy.
The winners of 2009 PanIIT award have been selected from over 200 nominees by a panel of luminary judges. The Lifetime Achievement Award will be awarded to Dr. (Late) Rajeev Motwani, who was an advisor to Google founders Sergery Brin, Larry Page and many more. The Academic Excellence Award will be given to Dr. Pradeep Khosla, Dean, College of Engineering, Carnegie Mellon, the Corporate Excellence Award to Padmasree Warrior, Chief Technology Officer, Cisco. Dr. Suhas Patil, Chairman, Emeritus Cirrus Logicand Chairman, Digite and Cradle Technologies will be awarded the Entrepreneurial Achievement Award and the Technology Leadership Award will be given to Dr. Ravi Sethi, President, Avaya Labs. "These individuals have helped to make the IITs in India one of the most elite educational institutions in the world today," said Umang Gupta, Co-Chairman, Board of Directors, PanIIT and CEO, Keynote Systems.
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