Mumbai terrorist attacks don't deter technology companies

Terrorist attacks late Wednesday in Mumbai are unlikely to make multinational technology companies change their strategies for India.

The attack in Mumbai is the latest in a string of terrorist attacks across the country, including a number of attacks earlier in Mumbai.

The attacks late Wednesday by terrorists using guns and grenades in Mumbai did however appear different than previous ones, because it targeted top five-star hotels in Mumbai's business district. About 100 are feared dead in the shootouts, which still continue as police battle the armed terrorists. Some foreign residents at the hotel are being held hostage by the terrorists. 

"It is sad that this has happened, but we are confident that India will bounce back to normalcy," said Vidya Natampally, director of strategy at Microsoft Research India. 

The terrorist attacks will not change Microsoft Research's plans in India. " We are committed to staying on in India," Natampally added.

Dell has issued a travel advisory to its staff, advising caution and due diligence when traveling to India, said a spokeswoman for the company. "That is the only measure we have taken," she added.

A large number of technology companies including Oracle, Microsoft, and Dell run large software development and call center operations in India. But ever since the threat of terrorism increased since last year, these companies have tightened on security at their facilities.

"For a long time now, we have tightened on security at all our facilities," the Dell spokeswoman said.

Indian outsourcing companies and Indian operations of multinational technology companies were not affected by the attacks, though the disruption of train service in Mumbai on Thursday could affect the movement of staff.

The Bombay Stock Exchange in south Mumbai has shut down on Thursday. The state government has ordered schools and colleges closed Thursday.

Ref : PC World , november - 2008.

Evolution of LOGOs!

APPLECANON

GOOGLE

IBM

LG

MICROSOFT

MOTOROLA

FIREFOX

NOKIA

NORTEL

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PALM

Re-inventing Indian IT

In mid-September this year, several employees at India’s largest software exporter, Tata Consultancy Services (TCS), were laid off and many more were given months to shape up or be shown the door. With the financial services sector in a tailspin and the slowdown in the US market spreading to Europe, India’s booming IT industry found itself directly in the firing line.

For the last five years, the IT industry has blossomed as companies looked to leverage India’s low-cost, high-quality base for IT services. Over the last five years, the Indian market has grown from $21.6 billion (Rs 1.04 lakh crore) to $64 billion (Rs 3.07 lakh crore), employing 800,000 people. In this time, Indian IT companies have leaned heavily on financial services and the US market (the biggest industry and geography for IT services) and now they’re feeling the heat as a slowdown in financial services begins to spread to other sectors such as real estate and manufacturing. What’s worse, a 60 per cent reliance on the US market has singed the industry, causing Indian vendors to review their plans.

“We continue to see a lot of uncertainty. Its heightened levels have made customers cautious,” admits Wipro’s Joint CEO Suresh Vaswani. However, his peers in the industry are much more frank about the current state of the market. “The slowdown in US is for real and it is wait’n’watch for at least the next two quarters,” says S. Premkumar, Corporate Officer & Global Head, Financial Services, HCL Technologies. A key concern, according to analysts, is the limited spending by other industries, which will prevent the Indian IT industry from recouping the losses suffered in financial services. “Financial services companies spend about 10 per cent of their earnings on IT, compared to 3-5 per cent by other industries. Indian IT can expect to face rough weather in the foreseeable future,” says John McCarthy, Vice President at Forrester Research.

There have been other fundamental shifts in the global IT industry that have further complicated the market uncertainties. When the dotcom slowdown happened in the early part of this decade, large MNCs were small players in the Indian market and two large players, IBM and Accenture, had just 3,000 people here. Since then, these two companies have ramped up to over 150,000 people each in the country and are rapidly building on this base. The existing business model of Indian vendors has also heightened the impact, say industry watchers. “A large part of the work is project-based and not long-term annuity contracts. The former gives higher margins and makes sense to chase, but the reason it gives higher margins is because the revenue streams are unpredictable and can be cut off at any point,” says Siddarth Pai, Managing Director and Partner for TPI India, an offshore advisory firm.

Click here to Enlarge

Annuity contracts require onshore delivery capability from the vendor and the willingness to take on the client’s people. “Indian vendors have been slow to do both and, hence, have a revenue mix that is skewed towards project work. This project work is—by definition—more risky,” says Pai. While MNCs have rapidly expanded their India numbers over the last couple of years, Indian vendors have only begun to become global operators. “Satyam has development centres around the globe—more than 30 in all. In fact, our three most recent acquisitions were in Europe and the US. Satyam is already a global company—we just happen to be headquartered in India,” says Hari T., Head, Global Marketing & Communications, Satyam Computer Services.

Already, there are visible signs of a slowdown in the Indian companies. For one, there has been a significant reduction in volume growth for key players (Infosys, for example, recorded one of its lowest volume growths of 0.5 per cent on stable pricing resulting in dollar growth on about 0.7 per cent quarter on quarter, according to an IndiaInfoline report) and other metrics such as hiring and campus offers, too, are in decline or have been frozen. “We will certainly review our current business model where we have a 30 per cent bench in a muted market. We will increase utilisation, but we’ll hire conservatively too,” Kris Gopalakrishnan, Infosys CEO, told BT recently. The company declined to comment on this story, citing the silent period for its second quarter results. Given the weak conditions, techies will have to get used to smaller hikes, with Wipro, for example, expected to dole out increments of 8-13 per cent region, compared to 15 per cent and more previously.

Suresh Vaswani/

Besides Indian IT companies, the overall technology industry has seen a spate of lay-offs, with companies across the board cutting down flab to stay afloat. In the semiconductor market, most design centres of companies such as Intel, NXP and Texas Instruments have frozen their hiring, while online giants Yahoo and AOL are downsizing. Nvidia, the graphic processor maker, recently added to this increasingly lengthy list when it announced plans to cut 60-70 people across its Bangalore, Pune and Hyderabad centres. “Everyone is going to look and re-look at their centres in India. There will be an even greater emphasis on cost and efficiency,” says Forrester’s McCarthy.

Experts say Indian IT needs to broad-base its revenue and geographical bases, expand its global delivery capability and move aggressively towards a non-linear business model, where the direct link between revenue and headcount growth is broken. HCL’s Enterprise Transformation Services promises cost savings by reducing business cycle and process times for clients. The service will be priced on a revenue share or outcome-based model. The service has been piloted with four clients, resulting in a cumulative savings of $580 million (Rs 2,784 crore) for users. In terms of global delivery, several companies have taken their first steps. TCS has entered Uruguay and Satyam is in Cairo, Egypt.

Hari T.

It isn’t just delivery these companies are after; several of them are also looking to tap these markets. “Today, we serve clients in more than a dozen industry sectors. From a geographical standpoint, we generate 40 per cent of our revenues from Europe and APAC, making us less dependent on the US than at any time in our history,” points out Satyam's Hari. As part of its Blue Ocean strategy, HCL is looking at markets such as Europe, Latin America, Brazil, Japan, Korea and China. "In terms of verticals, we are seeing growth in the Telecom, Aerospace, Media & Entertainment and Life Sciences and Healthcare verticals," says HCL's Premkumar.

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Despite these ambitious plans to become global players, several industry executives and analysts argue that Indian IT companies have a lot to learn. "Management maturity is yet limited among Indian companies, especially in the midtier, to manage a global operation," says Forrester's McCarthy. Meanwhile, Anurag Purohit, an analyst with Religare Securities, says companies will only reap the benefits of this diversification over the longterm. "Europe has been more conservative about offshoring due to language and regulatory issues." Unlike the US and UK, continental Europe is not just one market, but several small segments with strongly entrenched local players, says Andy Green, CEO, Logica, a London-based technology services company.

Just as they prepare to put in place these measures to survive the slowdown, some market watchers say that companies such as Infosys, which have a very small domestic business, may actually take it slow over the next few months. While the rupee was pegged at 39/dollar and threatened to fall to 35, the reverse has happened. The rupee has, instead, depreciated against the US dollar, reaching about Rs 48 against the greenback. "This move could give hard-pressed IT companies a 7-8 point cushion and help them focus on the export market," says one analyst.

Rahul Sachitanand

October 16, 2008

Braving the odds in IT

Despite the present economic slowdown, the IT industry is open to those who constantly sharpen their skills and update themselves with emerging technologies, say experts.

Testing times: Innovative IT solutions at low cost is the need of the hour.

With global stock markets groaning under the financial crisis, these are uncertain times. Newspapers blaze with headlines of retrenchment and recession. The campus recruitment figures in the IT industry paint a gloomy picture. What does this scenario mean to a student aspiring for a career in the IT industry? Education Plus spoke to those involved with the industry to find out.

“In the long-term perspective, the outlook for the IT industry is very much positive. We as an industry are very much matured,” assures Viswanathan Venkatasubramanian, Senior Manager, Talent Acquisition from Wipro Technologies. “It is a temporary phenomenon,” he says.

But the slowdown will change things in the industry. Customers of the IT industry will expect more, which means, employees will need to perform better. “Those who can make a difference, those who come out with more innovative solutions developed at low cost will provide the customer more value. So, we need to be more productive and provide more value,” he says.

Srinivas Kandula, Global Head-HR, iGATE, concurs. “Given the current slowdown scenario, organisations will take bold steps to weed out inefficient people. However, there is no need to worry or panic. There is an assured long-term career in the IT industry as long as they [students] are sharpening their skills and are in touch with emerging technologies,” he says.

What this implies is that the industry will focus sharply on quality, instead of quantity. So, good software engineers are assured of a seat in the industry. But what makes a good software engineer?

“The real problem in the industry is the general apathy or inability of the people to upgrade their skills,” says Mr. Kandula. “A large percentage of the people in the IT industry do not take proactive interest in their own learning and growth. Given that the software tools get revised and change every year, it is important for them to focus on improving their skills, on an ongoing basis,” he says.

This translates to a lifelong commitment to learning.

Mr. Kandula says, “Employees should plan their work and career not just for the present but also for the future and that they should have a long-term career perspective. It is important for them to understand the kind of skills they need to acquire and the ways in which they can acquire those relevant skills in their area of expertise.”

Go that extra mile

One mantra that always works during tough times is hard work. Karthikeyan Vijayakumar, a young entrepreneur who started his own firm, Excedos Market Services, says that companies will definitely work with someone who is willing to go that extra mile. He adds, “Not getting a job in a big company is definitely not the end of the road. You can join a smaller firm. But, make sure that the company has enough revenue to sustain the downturn.”

He says, “In a small firm, you get a lot of freedom. If you put in a lot of time and effort, then at the end of two years, you would have built the skills to negotiate a higher salary. And, working in a smaller firm means you get to interact with people at the top closely, who have more experience. So, you learn more. But, you need to be passionate about what you do.”

So, a deep-seated interest in what you do will hold you in good stead, which makes it important to ensure that your choice of career coincides with the area of your interest.

“There is always a mass phenomenon,” says Mr. Viswanathan. “Everyone takes up engineering, so others take up engineering. You should understand whether you have the attitude and the aptitude. So, what it means is you should have interest, instead of just following everyone else. This is because, only those who have the attitude and the aptitude will survive.”

Ref : THE HINDU,Monday, Oct 20, 2008

Don’t lose grip

With India slipping further in the global IT industry competitiveness index this year despite its offshore IT prowess, Forrester has said that stepping up human capital investment, technology usage in rural areas, and addressing the existing talent crunch will be critical in raising the global competitiveness of India’s tech economy.

India dropped from 46th to 48th position in “The Economist’s global IT industry competitiveness index 2008”, which measures the environment for IT producers to thrive. “India’s worrying demotion is due to its dismal IT infrastructure, acute talent shortage, and unproductive R&D environment,” Forrester Research said in its recent report titled ‘How can India boost its tech economy’s global competitiveness.’

The just-released IT industry competitiveness index compares 66 countries on how well they support the competitiveness of IT firms. India, at 48th position, ranks way below East Asian countries such as Japan and South Korea, but marginally better than China, which has ended 50th in the pecking order.

‘Strengthen the demand side’

Forrester says Government and captains of IT industry will immediately need to focus on strengthening the demand side.

“The reason why countries such as the US, South Korea, and Japan top the index is not because their tech firms crank-out dozens of patents per day but because they boast a very tech-savvy customer base….What makes a region’s IT industry competitive is smart customers, not smart engineers,” it says.

India — which is still attempting to drive corporate and societal innovation by wielding policy instruments such as R&D investments and science parks — should instead strengthen institutional capacity to drive customer-focused and market-driven innovation. “Government must spur adoption across India. It must recognise that in today’s knowledge economy, IT infrastructure such as Internet access is more critical than physical infrastructure such as roads and ports. With good connectivity in place, the Indian government can then partner with tech providers such as Cisco Systems, Microsoft, and TCS to bring IT applications such as tele-education and telemedicine to Indian villages, where 70 per cent of the population lives,” Forrester says.

Ruing that Indian public agencies have been slow in digitising public-service delivery to citizens, Forrester says it is imperative for Government to work with state-level politicians to appoint CIOs at the federal and regional level who can collaboratively drive an IT-enabled innovation agenda. Besides this, there is a need to revamp science and engineering education curriculum — with the help of the National Knowledge Commission — to produce multidisciplinary engineers capable of brokering connections between Indian technology inventions and global business opportunities.

Forrester says Indian tech CEOs too need to overcome their export orientation and focus on India as the next big IT market, particularly now that the domestic spending is slated to rise by 18 per cent this year, the second-fastest-growing tech market after China.

“Tech suppliers such as Infosys, Satyam, TCS, and Wipro must beef up their corporate social responsibility (CSR) investments — by contributing more to teacher training programmes and new learning models.

Such a programme will allow their most experienced employees to teach part time or even full time in their local communities,” it adds.

Ref : THE HINDU, Monday, Oct 20, 2008

TCS acquires Citigroup Global Services for $505 million

India’s largest IT services provider Tata Consultancy Services (TCS) beat business process outsourcing (BPO) majors like Genpact and IBM to acquire the back-office operations of Citigroup for $505 million (over Rs 2,400 crore).

Along with the sale, Citi also signed an agreement with TCS to provide process outsourcing services worth $2.5 billion (around Rs 12,000 crore) over the next nine-and-and-a-half years. Citi will be the first global bank to have outsourced its entire banking processes, including core banking operations, to a third party.

While TCS defended the valuations, particularly during the financial turmoil, analysts termed the acquisition expensive. “The valuation is certainly high. The $2.5-billion deal would translate into over Rs 1,250 crore of annualised revenues. With CGSL listing its operating profit at 23 per cent, the payback time may be around 11 years for the money invested,” said an analyst at a leading brokerage.

Even the company’s argument that the acquisition of CGSL gives an opportunity to cross-sell did not convince analysts. “That will take time and further investment from the company. So, the immediate impact is negligible,” said another analyst.

In terms of the acquisition valuations, TCS said that the Citi BPO has had a consistent revenue growth rate of 27 per cent and earnings before interest and taxes (EBIT) margins are of the order of 20 per cent. The BPO has 12,472 employees, who will now join TCS along with the existing management team. The BPO will operate as an independent entity.

“We are confident that after the integration the EBITA margins of the BPO will be in the range of TCS’,” said the IT company’s COO and Executive director N Chandrasekaran.

Sanjay Nayar, CEO (South Asia) for Ctitbank, said: “We have been at this for quite some time. We have been able to consolidate all our businesses. We want to focus on our core operations. We will use the freed up capital for productive businesses.” This deal also means that TCS would be the single largest vendor for Citigroup.

“This acquisition is very strategic for TCS. This will also propel the TCS BPO business to a completely different level. With this Citigroup becomes our top client. This is the first time that core banking operations, which till date are in the realms of banking firms, will be outsourced. That allows us to take these services to other clients. More so, to the small- and medium-sized banks,” said TCS CEO and Managing Director S Ramadorai.

Chandrasekaran said that the tools created by CGSL would also be handy. “This, along with TCS financial products, will allow us to take our BPO platform strategy further. The revenues from the deal will accrue from the fourth quarter of 2008-09, or may be slightly delayed,” he added.

Axon prefers HCL Tech’s offer to Infosys

New Delhi, Oct. 2 In a move that places HCL Technologies ahead in the race for the acquisition of the Axon Group, the Board of the UK company on Thursday dropped its recommendation of Infosys’ 600 pence a share offer, and said it would unanimously recommend HCL’s 650 pence a share bid to its shareholders.

This assumes significance as the recommendation by the Axon board establishes HCL’s offer as a ‘friendly bid’ and not a ‘hostile’ takeover, sources said. Moreover, while the shareholders in any case would have opted for a higher bid, the recommendation also means that HCL now has the option to convert its offer into a scheme of arrangement.

Wait period lapses

The decision to switch allegiance and recommend the HCL bid comes just days after the 60-hour period stipulated in the pact between Axon and Infosys lapsed without the latter improvising its offer. This left Axon free to amend its endorsement of the Infosys offer to shareholders, in favour of HCL’s .

“Axon and HCL Technologies have enjoyed a long-standing relationship. The Board is pleased that HCL has recognised the quality of the Axon business and has announced its intention to make an offer. The value of the HCL offer is at a premium of 8.3 per cent, to the value of the Infosys offer,” an Axon statement said today.

Counter bid?

Mr V. Balakrishnan, Chief Financial Officer of Infosys told Business Line, “We have nothing to say at this point. We are still evaluating our options.”

No clincher

The change of recommendation by the Axon Board does not imply that HCL Technologies has clinched the deal; any counter-bid at this stage can stretch the timelines. “In case the status quo remains in the absence of a counter-bid, the clock will not tick on the offer until HCL Technologies publishes a formal offer document and sends it to the shareholders. Thereafter, the company has 46 days to get shareholders’ nod and close the offer,” sources pointed out. Thethree founders of Axon hold 18 per cent stake, while another six per cent is with directors and staff

Ref : THE HINDU, Friday, Oct 03, 2008

IBM's Linux Wristwatch

One of the products showcased by IBM at the recently concluded Bang!inux conference was their Linux-based wrist watch. The software development for this watch is being done here in India. We were able to grab some of the developers working on this watch project and pump them for more information

IBM or `Big Blue', as it is passionately called, is not only a multi-billion dollar giant with a fascinating product line, but also the single largest company with the most number of patents in the world. And if such a company, which has all along banked upon it's proprietary products for it's revenue, were to suddenly turn to Open source it makes you wonder and a little skeptically too. And this is just what's happening.
IBM's investment (to the tune of a billion dollars) has got the whole Open Source world rife with speculations about the Big Blue's interest in the Linux arena. Looks like IBM, this time around, don?t want to miss the turn-on-the-road (it has passed a few in the past). Now it wants to show the world that it is serious about the most happening Operating System--`Linux'.
IBM or `Big Blue', as it is passionately called, is not only a multi-billion dollar giant with a fascinating product line, but also the single largest company with the most number of patents in the world. And if such a company, which has all along banked upon it's proprietary products for it's revenue, were to suddenly turn to Open source it makes you wonder and a little skeptically too. And this is just what's happening.
IBM's investment (to the tune of a billion dollars) has got the whole Open Source world rife with speculations about the Big Blue's interest in the Linux arena. Looks like IBM, this time around, don?t want to miss the turn-on-the-road (it has passed a few in the past). Now it wants to show the world that it is serious about the most happening Operating System--`Linux'. ‘

IBM or `Big Blue', as it is passionately called, is not only a multi-billion dollar giant with a fascinating product line, but also the single largest company with the most number of patents in the world. And if such a company, which has all along banked upon it's proprietary products for it's revenue, were to suddenly turn to Open source it makes you wonder and a little skeptically too. And this is just what's happening.
IBM's investment (to the tune of a billion dollars) has got the whole Open Source world rife with speculations about the Big Blue's interest in the Linux arena. Looks like IBM, this time around, don?t want to miss the turn-on-the-road (it has passed a few in the past). Now it wants to show the world that it is serious about the most happening Operating System--`Linux'.
The technical specifications for the wristwatch running Linux are as follows:
* Kernel: 2.2.1 * X11R6 for the GUI env. * Size: Watch:56mm wide x 48mm long x 12.25mm thick (2.20 inches x 1.89 inches x 0.48 inches) MotherBoard: 27.5 mm wide x 35.3 mm long (1.08 inches x 39 inches) * Weight: 44 Gms ( Approx. 1.5 ounces) * Touch sensitive display * 8MB Flash * 8MB DRAM * IrDA * Radio Frequency Wireless connectivity * Rechargeable Lithium Polymer battery
The Linux watch was conceptualized at IBM's T. J. Watson research center where various groups are continuously exploring the various challenges that arise in the area of user interface design, power management, input devices, wireless communication, sensors and models for co-existences for pervasive devices and wearables. The story goes, that among them, a team of researchers with skills in hardware design, Operating Systems, displays, electronic and mechanical packaging, industrial design and user interface design, that was spread across multiple research IBM sites, worked together to develop the wrist watch that would eventually run Linux and X11. The team, led by Chandra Narayanaswami, worked relentlessly for about 18 months to accomplish this feat.
The wristwatch runs the Linux 2.2.1 kernel with the ARM patch from Ben Williamson. According to IBM, there are certain issues regarding the non-availability of this patch in the latest stable kernel release. The ARM processor that powers the watch runs at 19MHz, is RISC based and which according to estimates is almost equivalent to a 100 Mhz Pentium. The motherboard for the watch was fabricated at IBM's Japan research center. The kernel, which required some massive hacking including the shell that the watch runs, was `tweaked' at Big Blue's research center at Bangalore.