Also see:Infosys to replace Indians by Americans
Wipro Ltd, India’s third-largest software-services provider, plans to hire more workers in the US to take advantage of a rebounding technology market.
“We are seeing signs of stability, signs of decision making coming back,” Chairman and Chief Executive Officer Azim Premji, 64, said in an interview at Bloomberg headquarters in New York yesterday. “So overall positive, but still cautious.”
Premji is betting that US employees will help the Bangalore-based company win local orders, including contracts with the federal government, as the world’s largest economy starts to recover from the worst recession since the 1930s. Wipro gets about half its revenue from the US.
The company plans to hire about 500 local employees for a new services center by June, he said. He declined to name possible locations, saying he is talking to different state governments. The company already has a center in Atlanta.
“Everybody wants employment,” said Premji, who attended Stanford University. “That’s the trump card today.”
Larger rival Infosys Technologies Ltd. reported second- quarter profit that beat analysts’ estimates last week after winning more business from current customers.
Wipro designs and builds software programs, maintains computers, and provides product-engineering services and back- office support to General Electric Co, Cisco Systems Inc, Citigroup Inc and other customers. It will report results on Oct. 27 for the three months ended Sept. 30.
Wipro rose 1.4 percent to 581.70 rupees yesterday in Mumbai trading. The stock has more than doubled this year, compared with a 79 percent increase for the benchmark Sensitive Index on the Bombay Stock Exchange.
U.S. Universities
The company has been working with schools such as the Georgia Institute of Technology to help bolster engineering education, which is subpar in the U.S., Premji said. U.S. graduates have become more affordable in the recession, he said.
Premji said he was worried about President Barack Obama limiting H-1B visas in a bid to fight unemployment. The visas allow foreign workers to come to the U.S.
Friday, October 16, 2009
CTS
Cognizant snaps up UBS' Indian captive for $75 million
UBS, Switzerland’s biggest bank by assets, has sold its Indian back-office captive to multinational services firm Cognizant Technology Solutions for around $75 million along with a five-year outsourcing contract worth up to $442 million. The acquisition will strengthen Cognizant’s BPO practice and also help it expand its relations with UBS, an existing client.
“We are among the top five companies providing technological services for the financial services sector. This acquisition helps us consolidate our position, expand our service offering and take our solutions to a wider geography. We have significant revenues coming from the US whereas the USB ISC (India Service Centre) has more than half its revenues coming from APAC and Europe regions. So, this helps in diversifying our revenue base,” Cognizant vice-chairman Lakshmi Narayanan told ET NOW on Thursday.
A report by Deutsche Bank said the deal was reasonably priced, through which Cognizant would acquire highly skilled employees. The report further said, “It highlights Cognizant’s ability to expand with existing clients and captives tend to have margin leverage potential related to improved span of control opportunities.”
ET had reported last month that UBS was in discussions with Cognizant for a potential sale of its UBS India Service Centre and was exploring to bundle an outsourcing contract with the transaction. The bank had held discussions with Infosys and Wipro who count UBS as their customer.
Divesting non-core captive operations is a strategy adopted by banks such as Citigroup and UBS for focusing better on their core operations and also gain better outsourcing rates by bundling such transactions with a multi-year contract.
An upfront payment also helps them unlock value from non-core assets. Citibank sold its Indian back office business to TCS for around $505 million in October last year and Citi Technology Services for around $127 million to Wipro in December last year. Both these transactions came with assured outsourcing business of around $3 billion together for these vendors.
While around 2,000 staff of UBS’ India captive unit in Hyderabad will move to Cognizant as part of this transaction, the bank’s captive operations in Poland has not been included in this deal, a Cognizant spokesman added.
The $442-million outsourcing contract bundled with this deal includes work beyond back office and knowledge process outsourcing and could involve application development and IT hardware management as well.
“We are among the top five companies providing technological services for the financial services sector. This acquisition helps us consolidate our position, expand our service offering and take our solutions to a wider geography. We have significant revenues coming from the US whereas the USB ISC (India Service Centre) has more than half its revenues coming from APAC and Europe regions. So, this helps in diversifying our revenue base,” Cognizant vice-chairman Lakshmi Narayanan told ET NOW on Thursday.
A report by Deutsche Bank said the deal was reasonably priced, through which Cognizant would acquire highly skilled employees. The report further said, “It highlights Cognizant’s ability to expand with existing clients and captives tend to have margin leverage potential related to improved span of control opportunities.”
ET had reported last month that UBS was in discussions with Cognizant for a potential sale of its UBS India Service Centre and was exploring to bundle an outsourcing contract with the transaction. The bank had held discussions with Infosys and Wipro who count UBS as their customer.
Divesting non-core captive operations is a strategy adopted by banks such as Citigroup and UBS for focusing better on their core operations and also gain better outsourcing rates by bundling such transactions with a multi-year contract.
An upfront payment also helps them unlock value from non-core assets. Citibank sold its Indian back office business to TCS for around $505 million in October last year and Citi Technology Services for around $127 million to Wipro in December last year. Both these transactions came with assured outsourcing business of around $3 billion together for these vendors.
While around 2,000 staff of UBS’ India captive unit in Hyderabad will move to Cognizant as part of this transaction, the bank’s captive operations in Poland has not been included in this deal, a Cognizant spokesman added.
The $442-million outsourcing contract bundled with this deal includes work beyond back office and knowledge process outsourcing and could involve application development and IT hardware management as well.
IT market
Dell loses no. 2 spot to Acer
Dell Inc, once the world’s top seller of personal computers, fell from second to third place in the global PC market last quarter after Acer Inc surged past the company.
Dell was the only top-five PC maker to see its shipments drop in the third quarter from a year earlier, market research firms IDC and Gartner Inc said today in separate reports. Hewlett-Packard Co, which took the lead from Dell in 2006, retained its top ranking.
Dell has struggled to reach consumer laptop shoppers -- the industry’s biggest source of growth right now, said Loren Loverde, an analyst for IDC. Acer’s shipments surged 25.6 percent last quarter, the fastest growth among the top PC makers, buoyed by sales of low-cost netbooks. Dell gets about 80 percent of its sales from business customers, with 20 percent coming from consumers.
“They’re dropping for the same reason that they have been having trouble over the last couple of years: They’re more focused on U.S. commercial desktops than all their competitors,” Loverde said. “Where the market has been growing is in retail with portables. That’s proven to be a challenge for Dell.”
‘Profitable growth’
Dell’s worldwide share fell to 12.7 percent from 14.2 percent on an 8.4 percent drop in shipments, IDC said. Gartner put Dell’s drop at 6.7 percent.
“We’re focused on profitable growth and not simply share gain,” Dell said in a statement. “We’ll announce financial results for our fiscal third quarter on Nov. 19 and will hold further comment until then.”
The total market rose 2.3 percent, a rebound from declines in the first and second quarters, IDC said. Hewlett-Packard, based in Palo Alto, California, captured a 20.2 percent share after a 9.3 percent gain in shipments, IDC said. Lenovo Group Ltd. and Toshiba Corp. rounded out the top five.
In the US market, which grew 2.5 percent last quarter, Hewlett-Packard led, followed by Dell and Acer, according to Framingham, Massachusetts-based IDC. Gartner, based in Stamford, Connecticut, gave the U.S. lead to Dell.
Both research firms ranked Apple Inc, maker of the Macintosh computer, in fourth place in the US.
Dell, based in Round Rock, Texas, rose 32 cents to $15.63 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 53 percent this year. Hewlett-Packard advanced $1.20 to $47.89.
Dell was the only top-five PC maker to see its shipments drop in the third quarter from a year earlier, market research firms IDC and Gartner Inc said today in separate reports. Hewlett-Packard Co, which took the lead from Dell in 2006, retained its top ranking.
Dell has struggled to reach consumer laptop shoppers -- the industry’s biggest source of growth right now, said Loren Loverde, an analyst for IDC. Acer’s shipments surged 25.6 percent last quarter, the fastest growth among the top PC makers, buoyed by sales of low-cost netbooks. Dell gets about 80 percent of its sales from business customers, with 20 percent coming from consumers.
“They’re dropping for the same reason that they have been having trouble over the last couple of years: They’re more focused on U.S. commercial desktops than all their competitors,” Loverde said. “Where the market has been growing is in retail with portables. That’s proven to be a challenge for Dell.”
‘Profitable growth’
Dell’s worldwide share fell to 12.7 percent from 14.2 percent on an 8.4 percent drop in shipments, IDC said. Gartner put Dell’s drop at 6.7 percent.
“We’re focused on profitable growth and not simply share gain,” Dell said in a statement. “We’ll announce financial results for our fiscal third quarter on Nov. 19 and will hold further comment until then.”
The total market rose 2.3 percent, a rebound from declines in the first and second quarters, IDC said. Hewlett-Packard, based in Palo Alto, California, captured a 20.2 percent share after a 9.3 percent gain in shipments, IDC said. Lenovo Group Ltd. and Toshiba Corp. rounded out the top five.
In the US market, which grew 2.5 percent last quarter, Hewlett-Packard led, followed by Dell and Acer, according to Framingham, Massachusetts-based IDC. Gartner, based in Stamford, Connecticut, gave the U.S. lead to Dell.
Both research firms ranked Apple Inc, maker of the Macintosh computer, in fourth place in the US.
Dell, based in Round Rock, Texas, rose 32 cents to $15.63 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 53 percent this year. Hewlett-Packard advanced $1.20 to $47.89.
IBM, Outsourcing
Brazil's CBD In 5-Yr Outsourcing Pact With IBM
Brazilian supermarket chain Companhia Brasileira de Distribuicao (CBD, PCAR5.BR), or CBD, signed a partnership with International Business Machines Corp. (IBM) to outsource its information technology, IBM said late Wednesday in a press release.
"The deal, worth about $115 million, was designed by IBM and CBD to meet current business needs and to support the expansion planned for the next years," said IBM.
The five year agreement will transfer two data centers of the retail chain to an IBM Global Delivery Center, based in Hortolandia, Sao Paulo.
CBD is jointly controlled by the Diniz family of Sao Paulo, the chain's founders, and by French retail company Casino Guichard-Perrachon SA (CO.FR). Its main competitors in Brazil include U.S. retail giant Wal-Mart Stores Inc. (WMT) and France's Carrefour SA (CRERY, CA.FR).
Source: WallStreetJournal
"The deal, worth about $115 million, was designed by IBM and CBD to meet current business needs and to support the expansion planned for the next years," said IBM.
The five year agreement will transfer two data centers of the retail chain to an IBM Global Delivery Center, based in Hortolandia, Sao Paulo.
CBD is jointly controlled by the Diniz family of Sao Paulo, the chain's founders, and by French retail company Casino Guichard-Perrachon SA (CO.FR). Its main competitors in Brazil include U.S. retail giant Wal-Mart Stores Inc. (WMT) and France's Carrefour SA (CRERY, CA.FR).
Source: WallStreetJournal
IT market
Polaris Software to acquire Laser Soft for Rs 52 cr
IT firm Polaris Software Lab on Thursday said it will acquire software product company, Laser Soft, for Rs 52 crore.
The company has signed a definitive agreement with Chennai based-Laser Soft and its principal shareholders to acquire its 100 per cent equity shares, Polaris Software said in a filing to the Bombay Stock Exchange (BSE).
"The value of the deal is about Rs 52 crore all in cash, linked to performance" it further said.
The deal is subject to the regulatory approvals, Polaris said.
Laser Soft is a software product company offering an entire range of banking operations, which includes core banking and specialised products like treasury, trade finance and cash management.
Shares of Polaris Software Lab were trading at Rs 149.20 on the BSE, up 0.74 per cent from its previous close.
The company has signed a definitive agreement with Chennai based-Laser Soft and its principal shareholders to acquire its 100 per cent equity shares, Polaris Software said in a filing to the Bombay Stock Exchange (BSE).
"The value of the deal is about Rs 52 crore all in cash, linked to performance" it further said.
The deal is subject to the regulatory approvals, Polaris said.
Laser Soft is a software product company offering an entire range of banking operations, which includes core banking and specialised products like treasury, trade finance and cash management.
Shares of Polaris Software Lab were trading at Rs 149.20 on the BSE, up 0.74 per cent from its previous close.
Thursday, October 15, 2009
Infosys, IT market
Infosys to replace Indians by Americans
To overcome the visa problems and strengthen their businesses, Infosys Technologies is likely to hire more number of local talents in the U.S. The company has already recruited 72 Americans and 140 more offers are under way.
Nandita Gurjar, Senior Vice President and Group Head of Human Resources at Infosys told Financial Chronicle that under a hiring plan started in April, 1,000 Americans will be taken on board. This lateral hiring will be typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the U.S.
The hiring of more Americans is part of the company's strategy to have more non-Indians, who now account for 4.67 percent of the employee strength. The company wants to take the figure to 15 percent by 2012.
According to the company's Director, T V Mohandas Pai, Infosys has not planned to fill senior management positions in the U.S. now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said that the company believed in having the 'most capable person heading the best positions'.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the U.S.), including 4,900 non-Indians. 1,000 Indian staffs are stationed in the U.S.; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
Infosys is also recruiting in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines. It is generally believed that local hiring costs Indian companies more. However, Gurjar said, "This is no longer true. The U.S. minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity."
Nandita Gurjar, Senior Vice President and Group Head of Human Resources at Infosys told Financial Chronicle that under a hiring plan started in April, 1,000 Americans will be taken on board. This lateral hiring will be typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the U.S.
The hiring of more Americans is part of the company's strategy to have more non-Indians, who now account for 4.67 percent of the employee strength. The company wants to take the figure to 15 percent by 2012.
According to the company's Director, T V Mohandas Pai, Infosys has not planned to fill senior management positions in the U.S. now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said that the company believed in having the 'most capable person heading the best positions'.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the U.S.), including 4,900 non-Indians. 1,000 Indian staffs are stationed in the U.S.; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
Infosys is also recruiting in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines. It is generally believed that local hiring costs Indian companies more. However, Gurjar said, "This is no longer true. The U.S. minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity."
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