"Blind Men and the Elephant" - A first step in understanding IT services

So here are two young IT professionals turned- writers, Was Rahman and Priya Kurien, who have attempted to rewrite the story exploring the intricacies of today’s ‘least understood’ IT industry. It would be wrong to say Was Rahman and Priya Kurien are trying to demystify Information Technology (IT) in their book "Blind Men and the Elephant". The industry is too much of a behemoth for one book to be able to do that.

Elaborating on the book, Was Rahman, a post graduate in Management and IT from Coventry University says, “In the poem, the six blind men described each part of an elephant and guess it was the elephant. Similar is the case with the industry as nobody has given its full history. Each group gives its own descriptions, based on its perspective.’’

Priya, an engineering graduate from Guindy Engineering College, says, “The book talks about almost all aspects of the industry from its fascinating past to the future.’’ Was and Priya’s experience in the industry has helped them gain a good understanding of the inner conflicts.

Was Rahman, who started his career in investment banking, has been in the industry for the last two decades. With five years’ experience in Infosys Technologies, he was also responsible for the company’s European Strategy, which included leading its transformation journey from supplier of commodity IT services to solver of Business problems.

Priya, who had a distinguished 13-year-career on the technology front of the industry, also co-developed the firm’s European Strategy and solutions programme.

“The industry had a fascinating history and all are talking about it. But nobody knows where it actually started,’’ she quips.


Like John Godfrey Saxe's parable, the IT services industry is slippery as the "snake", is "a tree" under which the wise man as well as the fool find shade, blows in fresh air like a "fan", ties one up in knots "like a rope" or...

To hit the stands in early August, the book wants "to make people think of the future" and "where the industry is headed" and about the pitfalls in its being and growing.

"We are trying to start a debate, what is the role of the IT services industry?" say Rahman and Kurien in their must-read.

"History repeats itself," Rahman told IANS at an interaction ahead of the release of the book in India, recalling that busts inevitably follow booms and that the IT services industry is reaching an equilibrium, which both the service sector and the customer have to come to terms with soon.

"Most people don't understand what the IT industry is all about, though in the 21st century, most people use IT in their lives in one way or the other," explained Kurien.

This rings a bell, especially when we come face to face with the jargon-filled world of COBOL (common business oriented language), ERPs (enterprise resource planning) and MRPs (material resource planning).

Each specific IT service sector is getting more specialised and more "driven by profit", but not becoming meticulous enough to cover its back, thus exposing itself to technology that can make it not only outdated but the service entirely redundant.

The book looks in some detail at some great IT service sector stories, but they all end with a cautionary note - the euphoria needs to be contained.

The industry is not about technology. Let's not forget, said the authors, "it is about the service, it is about the investment, about leadership and empowerment", and any of these missing can make the industry crash.

Mastering the art of Job Hunting !!

Where do I start for a job change or a job hunt ??
What would be the right career move ??
How do I market my curriculum vitae ??

Do you ask yourself these questions before a job change ?? Most of us do and are worried how to headhunt for the right opportunity for the position matching our aspirations.

So I thought to pen down some universal tips and tricks.

1. Preparing a presentable resume.
2. Marketing your resume
3. Handpicking the employers
4. Attending interviews
5. Negotiating your CTC
6. Picking the cream of offers

1. Preparing a presentable resume

Analyze your resume : The resume is a selling tool that outlines your skills and experiences so an employer can see, at a glance, how you can contribute to the employer's workplace.

The most effective resumes are clearly focused on a specific job title and address the employer's stated requirements for the position. The more you know about the duties and skills required for the job--and organize your resume around these points--the more effective the resume.

Optimize your resume : “You will need information to write a good resume.” Not just information about jobs you've held in the past but also information to select the most relevant accomplishments, skills and experience for THIS position. The more you know about the employer and the position, the more you can tailor your resume to fit the job.

2. Marketing your resume

“Your resume has to sell you in short order.” While you may have all the requirements for a particular position, your resume is a failure if the employer does not instantly come to the conclusion that you "have what it takes." The first hurdle your resume has to pass--whether it ends up in the "consider file" or the "reject file"--may take less than thirty seconds.
Below are a few tips to effectively market your resume

• Executive Search Firms : Submitting your resume to Executive Search Firms are the hassle free way of headhunting a job, they are professional’s who have a wide gamut and reach of employers / opportunities to offer . They can even help you in preparing your resume, interview process and offer negotiations; half of your work is done if you submit your resume to these firms.

• Referrals through friends : Let your friends know that your are on a job hunt and looking out for a good opportunity, ask them to refer your candidature to their employers.

• Job Sites : Jobsites are an effective way to market your profile. Update your resume in their respective database and wait for the responses. Always keep a tap on the different jobs posted by employers

• Career / Job Fairs : Career Fairs / Job Fairs are good medium to gather info about different employers and the kind of opportunities they advertise.
  

3. Handpicking the employers :

Once you are done with the marketing and you start getting responses for your “Marketing Drive”, analyze the response and hand pick a few employers where you might be interested to work and continue with the process further.

4. Attending Interviews :

Lot has been written on this topic I am not elaborating much on this you can have a detailed info here.

5. Negotiating Your Salary :

This is a crucial part of every interview. Before you accept a job offer, you have to make sure the offer is one with which you are pleased. If not, you may have to negotiate. You can find more guidance from this article.

6. Picking the cream of offers :

By the end of this exercise you will be having at least a couple of offers with you. Now you have to make a decision depending on what would be your learning curve with the employer, Work Culture, Projects / Clients / Products, Other Benefits, Brand name of the employer etc.

I guess I have covered most of the things, if missed out anything please comment would be glad to add it up to this posting.

Cheers and Happy hunting !!!!

Password to crack the new IT matrix

For a while now the two words that have characterised the IT industry are “cost arbitrage”. Investors and analysts now want the industry to learn two new words: Pricing power.

Hit on the cost side because of an increase in employee costs and on the revenue side because of a rise in the value of the rupee against other currencies, the industry needs to figure out if its clients need it enough to allow them to raise prices.

“I think it is obvious that these companies do not have power to renegotiate prices to completely offset the adverse circumstances,” says the India head of a multi-strategy fund that currently managed about $2.5 billion. Most companies are negotiating a price increase of 1-2% on contracts coming up for renewal. This is unlikely to nullify the 5-6% decline in profit margins. No wonder then that most frontline IT stocks have underperformed the Sensex by more than 10% over the last six months.

One stark indicator of the state of the industry is the return on incremental capital employed, essentially the additional profits generated by deploying additional capital in the business. On this criterion, most top firms have shown a decline over the last two years. “These guys have a great business. Profits are growing at 25-30%, and revenue growth is strong. It is just that they may not be great stock market investments because the capital efficiency of the business may have declined,” says the fund manager.

For many industry experts IT companies may not be doing enough. “IT companies have done a reasonable job till now but if the rupee and the wages keep rising then they will need to do a lot more,” says Gartner regional research director Partha Iyengar. The IT industry has always relied on external triggers to show the way.

It was Y2K in 1999 and then the Internet mania in 2000 that shaped the business model of the industry. And that was setting up a process to move work offshore quickly and delivered in a “factory environment”. “Everybody then followed this business model that won the Y2K battle for India. I suspect we may be at a similar inflection point and we will see people now choosing differentiated strategies,” says the head of a private equity firm that has large investments in the IT sector.

For almost all the companies the core of the strategy will really mean figuring out how they deliver their bread-and-butter service: The application development and maintenance or ADM business. Since the ADM business is close to 50% of the revenues any strategic move has to deal with this chunk carefully.

So TCS is talking about using much more automation while Cognizant has set up a software factory at Coimbatore where they will use both scale as well as automation to be more efficient in delivering such services. There are other companies that are taking their ADM businesses away from Mumbai or Bangalore to smaller towns like Nashik, Bhubaneshwar or Pune.

All these are the cost-side measures. Things that can get better margins are as yet unaddressed. “The consulting businesses of these companies are yet to take off and these companies have not been able to identify any high-profit niches,” says the fund manager.

To be fair to the IT companies, they have developed deeper relationships with their clients but not in new areas. So, in normal ADM contracts Indian companies do it almost like a turnkey contract today while four to five years ago they would get all the requirements and only do the programming.

In enterprise solutions (SAP software related work) many India companies have moved ahead from doing just grunge work and writing small time programmes for SAP software. “Most of the global rollouts of enterprise software and its customisation in large companies is being handled right out of India and that is a huge step,” says Mr Iyengar.

But there is nothing spectacular in the pipeline that will transform these companies over a five-year horizon. “I think they need to become much more choosy in where they direct their resources. For example, HCL is not going to rebid for almost $16 million worth of contracts,” says Mr Iyengar.

Choices such as these are clearly difficult. Indian companies do not want to walk away from contracts and give smaller companies an opportunity to enter their accounts. Something they had benefited from when large companies like IBM and Accenture and Cap Gemini chose to focus on higher-end business 7 years ago. But clearly something has to give for the industry to get the buzz back. And no, we are not talking about small-fry acquisitions or sponsored ADS programmes.

Infy’s Finacle head puts in papers

Infosys Technologies is seeing the exit of another top level official with the head of its banking product business leaving the organisation. Merwin Fernandes, who was heading Infosys’ banking product business — Finacle — has put in his papers.

Mr Fernandes has spent close to a decade in Infosys and was the VP and global head — Finacle. He moved into the role following the elevation of Girish Vaidya as senior vice-president, Infosys Leadership Institute. However, it is not known what will be the Mr Fernandes’ future plans, though speculation is rife is that he will be moving into one of the rival businesses of Finacle. Confirming the development, Infosys in a statement said: “Yes, we can confirm that Merwin Fernandes has resigned from the services of the company to pursue his personal interests. At this stage the organisation is in the process of appointing a successor. The successor will be announced shortly to ensure a smooth transition.” Sources said Infosys has asked Mr Fernandes to stay on in the organisation till a successor has been found. Already, Infosys has sent letters to the various banks which are its customers, notifying the change. This will probably be another top level official exit from Infosys after Akshay Bhargava left its BPO business. Its other high profile exits have been Hema Ravichander.

Finacle — a core banking solution has been doing well for Infosys having recorded over 50% growth year-on-year (YoY). For 2006-07, it registered revenues of Rs 538 crore recording 50.7% YoY growth. Finacle constitutes 4% of Infosys revenues which has 91 customers with presence in 55 countries. It has a dominant share among the Indian PSU banks. Syndicate and Canara Banks have chosen to implement Flexcube of i-flex.

Finacle has been positioning itself as a global player and is targeting the global tier 1 and tier 2 banks. It had recently bagged an order from Emirates Bank of Dubai. It is also looking actively at the regions of South East Asia, western Europe and Australia and New Zealand where deals might start off from anywhere between $40 million and go up to $500 million.

At the marketplace, Finacle is competing not only against the Indian players like i-flex, FNS of TCS but also against the established global players like Misys, Temenos and Metavante. The current market size of core banking solutions is expected to be in the multi-billion dollars range spread over a longer period of time.

Lenovo to invest $11m in HP factory

PC major Lenovo on Thursday announced it would invest $11 million in setting up a new manufacturing unit in Baddi, Himachal Pradesh. The plant, Lenovo’s second in India, would have a capacity of two million units a year and will manufacture both desktop and notebook PCs.

Lenovo’s investment in the new plant will be spread over a period of five years. The plant will be operational in the third quarter of the current fiscal.

The Baddi plant, which will employ 350 people, will support regional customer requirements, including product assembly, distribution services and reverse logistics. It will also offer additional value-added services like product configuration, the company said.

“India is an integral part of Lenovo’s global manufacturing strategy.

The company already has a plant in Pondicherry that has a capacity of one million units a year. It also opened an innovation centre in Mumbai last year, its third in the world after those in USA and China.

MS tool to rival Google Analytics

The software giant Microsoft is upping the ante in its war against the search giant Google. The company is readying a tool which is aimed at taking on Google Analytics product.

The software maker is gearing up to release a beta version of its Web analytics tool called Gatineau says Ian Thomas, who works for Microsoft's Digital Advertising Solutions Group in his blog. The service promises to offer features beyond Google and is expected to go live later this year.

According to the posting, the tool will allow users to segment Web traffic by both age as well as by gender. However, Thomas stresses that Microsoft will extract the demographic data anonymously from users' Live ID profiles.

The Gatineau project is based on the technology Microsoft acquired from DeepMetrix in 2006.

Thomas said that the target audience is similar to that of Google Analytics, though he says it won't just replicate its functionality.

Thomas added that Microsoft has been ramping up the project slowly to avoid the teething problems Google had when it launched its free Web Analytics service in November 2005. Google was forced to suspend new subscriptions for the service a week after its launch due to an unforeseen demand which affected its performance. The service was later reopened to new users in January 2006.

Microsoft is yet to announce an official release date for the software.

Sony unveils new Vaio range

Aiming at the burgeoning population of youngsters in India, Sony has unveiled a range of its 'Vaio' laptops to lure youth of the nation and double its market share in notebooks' production.

Currently Sony enjoyed around 5.6 per cent share of the retail notepad sales, but the two-month long campaign would help the company double its market share.

The new CR range of 'Vaio' notepads featuring different colors and designs is priced between Rs 54,990 to Rs 64,990.

The company is also offering zero per cent financing scheme to make them affordable.

Sony would run a 90-day long promotional programme in print media, electronic media and even in night clubs and shopping malls.

For establishing a connection with people in 18-35 age group, Sony India has launched a Rs 10 crore promotional campaign for shopping malls and night clubs besides print and electronic advertisements.

Earlier Sony India had announced a sales target of two billion dollar for this year, of which 11 per cent is expected to come from the sales of 'Vaio' range.

Top four IT players lose 10K employees in Q1

Indian IT companies, grappling with an appreciating rupee eating into their profits, are also finding it hard to retain employees with the top-four firms - TCS, Infosys, Wipro and Satyam - witnessing an exodus of about 10,000 people in the first quarter.

Although, all the four firms collectively hired more than 25,000 employees in the April-June period, the net addition was just about 16,300 - taking their total headcount to 2,85,357 employees.

Except for Satyam Computers, attrition rate went higher at Infosys, Tata Consultancy Service and Wipro from both the previous quarter as well as the year-ago period.

All the four companies reported an adverse impact of rupee rise on their profitability and margins, and are looking at various hedging measures, which include improving employee utilization rates.

However, analysts believe the high attrition rates, mostly triggered by employees seeking higher salaries, could adversely impact the companies' plans to improve utilization rates.

TCS, the biggest in terms of revenue as well as headcount, saw an exodus of about 2,500 employees, while just over 2,000 people quit the country's second largest software exporter, Infosys.

The employee loss is estimated to be much higher at about 3,500 at Wipro, the country's third-biggest IT firm, while Satyam, the smallest of the four, saw the lowest number -- about 1,600 people -- leaving.

Interestingly, April-June quarter is the period when most of the software firms implement annual wage hikes and see a sharp surge in new hiring’s.

TCS, Infosys, Wipro and Satyam had net additions of 5,512, 3,730, 4,319 and 2,716 employees respectively in the quarter.

TCS reported an attrition rate of 11.5 per cent, up from 10.6 per cent a year ago and 11.3 per cent in the previous quarter, while it stood at 13.7 per cent for Infosys, unchanged from the previous quarter but higher than 11.9 per cent in the April-June period last year.

Satyam saw its attrition rate falling to 14.9 per cent from 15.7 per cent in the January-March period this year and 19.2 per cent in the year-ago period, where as Wipro witnessed a sharp surge to 20 per cent from 17 per cent in the previous quarter and 15 per cent in the year-ago quarter.

Wipro says its high attrition rate was driven by various factors such as seasonality and a spike in the number of employees
going for higher studies during the quarter, as well as the company's practise of implementing annual wage hikes in the third quarter.

The annual hikes are fully reflected in first quarter results of Infosys and TCS, while some of the other front line IT firms do the same either in the second quarter or spread it over a number of quarters.

Oracle forms R&D network for innovation

Enterprise software company Oracle today said it will form a research and development (R&D) network for its 19 centers across Asia Pacific and Japan to build, test and showcase technology innovations.

The new single network will link 19 development and solution centers - six Oracle Asia R&D Centers (OARDC) in India, Japan, Korea, Singapore and two in China as well as 13 solution centers in the Asia-Pacific region. These centers focus on developing effective solutions for the local markets in addition to contributing to global product development, a Oracle release said here.

"This new collaboration will enhance their Asia Pacific innovation development process as well as benefit their customers and partners in the region.

"With all sides of the globe participating in contributing to technology solutions, our customers will gain access to some of the most cutting edge IT projects in the world. Customers and partners will also be able to collaborate with Oracle's vast R&D network to apply new thinking in the way software can be used to stimulate global growth and innovation in any industry or country", he added.

The OARDC would focus on product development, solution development, strategic projects and partner enablement.

The Asia Pacific and Japan R&D network is also linked into the global Oracle development centers worldwide. Oracle recently reported an investment of 2.2 billion dollar on global research and development during 2007, a 17 per cent increase from the previous fiscal.

Infy may announce European buy today

Infosys Technologies Ltd, India's second-largest software services exporter, may announce an acquisition in Europe on Wednesday.

The size of the deal, expected to be in the back-office services segment, could be around $200 million, they said, citing unnamed sources.

Infosys, whose customers include ABN AMRO, Goldman Sachs and Airbus, was close to acquiring the finance and accounting back-office services arm of Dutch consumer electronics group Philips.

BPOs too outsource processes!

Faced with rising operational costs and higher-than-the-industry attrition rates, captive centres in India are turning to third-party BPOs/vendors to manage their centres and take over the less strategic work, while retaining control over some of the key functions.

Smaller captives, with up to 200-250 employees, are learnt to have approached third-party BPOs for a tie-up of this kind. Wipro is learnt to be looking at deals in this area.

A recent Forrester Research report pointed out that 60% of captives in India are currently struggling due to high operational costs, skyrocketing attrition rates and lack of management support.

The report also said that about 20% of existing captives are expected to adopt a hybrid approach by using third parties for less critical work and keeping more strategic work to themselves. Attrition rates for captives hover around 40%, against the industry’s 30-35%.

Companies like Wipro enterprise solutions, WNS Global Services, Infosys BPO, ExlService Holdings have been approached by captives, both for complete buy-outs and for taking over operations.

Patni buys US co Taratec for $27 m

Patni Computers has made its fifth acquisition by buying out US-based life science information technology consulting company Taratec for $27.2 million in an all-cash deal.

The acquisition, funded through internal accruals, will see an upfront payment and a three-year contingent payment depending on the performance. This gives Patni an entry into the life sciences segment. Taratec provides integrated business, IT and regulatory compliance products and services, and has over 150 people on its rolls with centres in the US and Puerto Rico. Taratec, with a topline of $20 million, has over 75 clients in some of the leading companies in the life sciences industry such as Aventis, Glaxo Smithkline and Pfizer, among others.

According to industry statistics, IT spend by life science firms is expected to reach $22 billion by 2009 with IT services and software representing the largest growth areas. Typically, life sciences companies can spend over $1 billion and take over 7-10 years to launch a product with a heavy dependence on IT.

The life sciences market is going through a change with increasing pressure on growth and margins. Leading pharma companies are trying to use IT to drive research and development (R&D) and business objectives and performance.

Taratec also brings in long-term customer relationships which will be valuable for Patni in getting a headway into the segment.

The primary markets for Patni through Taratec will be the US and Europe, though Japan is a strong future potential.This is the second biggest acquisition for Patni after its buyout of Cymbal for $78 million in November 2004.

Patni for some time has been acquiring a few companies with a consulting capability, and in the first week of July 2007 had acquired a telecom consultancy firm called Logan-Orviss.

US IT spend to rise, Indian cos say amen

IT investment and spending is set to rise in the US, according to a forecast by Forrester Research. This may be good news for Indian vendors hurt by the rising rupee and worries of troubles in the sub-prime lending space spilling over into other areas.

“With a moderate tech investment slowdown mostly behind us, the tech sector should experience improving prospects in the second half of 2007.

The US has been witnessing a slowdown in spending on computer and communications and to a lesser extent in areas such as IT services and outsourcing. The demand environment for Indian IT firms, however, has been strong and this was re-affirmed in the current quarter where the tech leaders posted strong growth from the North America region.

For Infosys Technologies, North America revenues were at 62.6% of its total revenues, unchanged from the previous quarter, and for Tata Consultancy Services up from 51% to 61%. Even smaller players, such as Tech Mahindra, with British Telecom as it largest client, maintained US revenues at 19% of total revenues, unchanged from the previous quarter even as its revenues grew.

“As has been true for the past two to three years, the Indian vendors of Infosys, Tata Consultancy Services (TCS), and Wipro outpaced the rest of the industry,” the Forrester analysts noted.

Sector-wise, in the first quarter of 2007, the computers and peripherals saw a fall in demand, while growth in communication equipment was flat. Software witnessed as healthy demand of 11%, while services saw a 6% growth.

As the slowdown tapers off, Forrester predicts that IT services spends in the US will grow by 8% in the second quarter, as will spends on computers and peripherals. Software and communications equipment are predicted to grow 10% and 9% respectively. However, the analysts did not totally rule out the possibility of a recession threat.

“The depressing effects over time of a slumping housing market on consumer spending could turn out to be greater than they have been so far. A spike in oil prices could drive gasoline and heating oil prices back to the peaks of 2006,” the report said.

TCS, Infy, Wipro top employers in IT-ITeS

Tata Consultancy Services (TCS), Infosys Technologies and Wipro Technologies have emerged the top IT and ITeS employers in Nasscom’s top 20 employer rankings for financial year 2006-07 .

The top 20 companies collectively employ over 0.5 million people — or just over 31% — of the 1.6 million employed directly in the industry. The rankings are based on the India headcount of firms with IT-ITeS operations in India, as reported to Nasscom in its annual survey. Other companies to figure in the top ten, in the order they’re ranked, are HCL Technologies, Cognizant, Satyam, HP, Genpact, Oracle and Intelenet Global Services .

The IT-ITeS industry, the country’s largest employment generator in the organised sector, is projected to employ over 10 million people directly and indirectly by 2010, from over 7.5 million currently, according to Nasscom. The industry body has attributed the growth in employee base to factors like healthy growth environment, attractive remuneration, various employment opportunities based on varying skill sets, and availability of talent. “What we do need to work on is the quality factor to ensure we remain the highest employment generator and maintain our share of the global offshore IT and ITeS industry ,” said Nasscom president Kiran Karnik.

Mastek acquires US-based LLC (Vector) for $9 mn

IT solutions provider Mastek Ltd on Thursday announced the acquisition of US-based Vector Insurance Services LLC (Vector) for $9 million.

Vector is a technology solutions provider and third party administrator that focus on the North American life and annuity insurance industry, having two of America's largest insurance carriers as its customers.

The acquisition will be done by Mastek's wholly-owned US subsidiary MajescoMastek which will be acquiring a 90 per cent equity stake in Vector in an all-cash transaction for $4.5 million, as quoted by its Chairman and Managing Director, Sudhakar Ram.

"This is payable at closing and a similar amount payable over the next two years as earn-out based on business performance. The acquisition is being funded through internal accruals," Ram said.

This acquisition is revenue and earnings accretive to Mastek and is expected to strengthen the opportunity pipeline for the company in the insurance vertical.

Mastek will now be able to offer a more complete solution for insurance carriers including new business, underwriting and policy administration products by adding 'software as a service (SaaS) capabilities to its existing end-to-end enterprise software solution offerings.

The Vector operation is currently in the process of getting integrated with Mastek's existing operations, which should get implemented by August 2007.

The existing management team of Vector will continue to look after the business, led by its founder Harold Apple who has extensive insurance sector experience and will report to William McCarter, President of MajescoMastek.

Commenting on company's performance, Ram said "we are targeting a 35 per cent growth in dollar terms in FY08. We believe this level will be sustainable going forward."

Mastek is looking at adding three more verticals, which includes healthcare in the near future.

On the company's expansion plans, Ram said that Mastek has taken up expansion plans by adding 1,500 seating capacity at its Mhape unit. It is also planning to set up a 5,000 seating capacity unit near Chennai.

The company's headcount will increase from the present 3,500 to 10,000 in the next 2-3-year period.

For the July-September 2007 quarter, Mastek expects its consolidated revenues to be in the range of Rs 205-210-crore.

Net profit after tax and minority interest is likely to be around Rs 25-26-crore.

For the full year ended June 30, 2007, the company posted revenue of Rs 812.7 crore as compared to Rs 701.1 crore last fiscal. The net profit stood at Rs 90.4 crore, translating into an EPS of Rs 31.8.

China eyes India's slot as top outsourcing hub

India, which has emerged as the back-office of the world in recent years, is expected to face stiff competition from countries like China, Malaysia and Singapore even as the global outsourcing industry is pegged to reach a market size of $1,430 billion by 2009-end.

A survey conducted by global consultancy firm Frost and Sullivan has ranked India as the top destination for shared services and outsourcing (SSO) across various verticals. The country is followed by China, Ireland, Singapore, Malaysia, Mexico, Czech Republic, Poland, the Philippines and Canada.

Low labour costs and abundant supply of skilled manpower are the key factors behind India's sustenance as the top outsourcing destination globally. Outsourcing sector in India is experiencing consolidation and SSO providers are moving up the value chain, expanding their onshore presence to strengthen global delivery capabilities, the report said.

But there is a threat from countries like China which is fast emerging as an attractive destination for outsourcing IT, research and development and procurement services, it added.

India's growth is beleaguered by factors like high attrition rates, poor infrastructure, rising wages and appreciation of rupee against US dollar, the report said.

"SSO is no longer just about cost arbitrage, instead SSO operators are adding value through their skill sets and competencies wherever they are located," Frost & Sullivan Vice-President Asia-Pacific (ICT Practice) Nitin Bhat said.

The study also forecasts the global SSO market will grow at a compound annual rate of 15 per cent to reach a market size of 1,430 billion dollars by end-2009.

Malaysia, which boasts of excellent infrastructure and low attrition rates, also makes for an ideal outsourcing hub, the Frost and Sullivan study said. The south-east nation is already a strong player in banking, financial services and insurance (BFSI), transportation and energy verticals.

Besides, companies such as Dell, Satyam and IBM have recently made outsourcing investments in Malaysia, making it a hub catering to the technology sector, it pointed out.

The study covered Fortune 500 and Forbes 2000 companies and was conducted across seven major industry verticals -- banking, financial services and insurance, technology/ICT, healthcare industry, transportation and logistics, energy, fast-moving consumer goods and media and entertainment.

A report by audit firm PricewaterhouseCoopers (PWC) has also said although India remains the most favoured destination for outsourcing, countries like Singapore were gaining favour.

A number of financial services companies, including Barclays and Credit Suisse have expanded their support operations with the Monetary Authority of Singapore actively promoting the country as a financial centre.

"Service providers are gaining domain specific capabilities to move-up the value chain. This trend is expected to boost further consequence to decreasing cost arbitrage, increased competition, and the relentless search for value," Bhat said.

Intel, HCL launches classmate PCs

The world’s largest chip maker Intel and leading computer manufacturer HCL Infosystems on Saturday announced the launch of classmate PCs.

The mobile PC is priced in the sub-Rs 18,000 range and will be available in the market for schools starting August, HCL infosystems executive vice-president Rajendra Kumar as informed.

“Rs 18,000 includes the cost of installing supporting connectivity infrastructure, teachers’ training and customised learning solutions through our tie-up with content developers and education service providers.

The cost will further go down,” he said. A classmate PC is an educational tool developed by Intel to aid students in their classroom learning. It is powered by Intel processor 900 MHZ and comes with WIFI and ethernet connectivity.

Classmate PCs will be retailed through schools and HCL Infosystems expects to deploy 3,000-5,000 such PCs over the next nine months to an year.

Google to bid for wireless airwaves

Google Inc said that it would take part in a major auction of wireless spectrum Airwaves, meeting a minimum required bid of $4.6 billion, if US regulators added a sale condition that Google said would promote an open wireless market.

The prospect of Google's participation in the auction escalates the debate over how the valuable airwaves should be used.

Ten days after Federal Communications Commission Chairman Kevin Martin floated a proposed set of rules for the auction, Google said it wants the FCC to require the winning bidder to offer to resell access to some of the airwaves to competitors on a wholesale basis.

"When Americans can use the software and handsets of their choice, over open and competitive networks, they win," Google Chief Executive Eric Schmidt said in a letter to Martin.

Martin's plan would require support for any wireless device or software application, but it did not include the so-called "wholesale" requirement.

"While these all are positive steps, unfortunately the current draft order falls short of including (all of the) tailored and enforceable conditions, with meaningful implementation deadlines, that consumer groups, other companies, and Google have sought," Schmidt wrote.

Google also called for another provision which would require other companies to be allowed to interconnect "at any technically feasible point" with the winning bidder's network.

Schmidt has said an open telecommunications network drives Internet usage and directly benefits Google's business strategy of selling advertising over the Internet. Some analysts have also speculated that Google could have plans to develop and sell mobile devices.

Google's position is at odds with existing major wireless carriers that say a requirement to resell the airwaves would reduce the value of the airwaves.

Google's offer was denounced by most existing wireless carriers, who accused the company of trying to rig the auction in its favor.

"This is an attempt to pressure the US government to turn the auction process on its head by ensuring only a few, if any, bidders will compete with Google," AT&T Senior Executive Vice President Jim Cicconi said in a statement.

AT&T is supporting Martin's proposed auction rules, while the No 2 wireless service provider, Verizon Wireless, has staunchly opposed any conditions on the auction as "corporate welfare" for Google. Verizon Wireless is owned by Verizon Communications Inc and Vodafone Group Plc.

Currently, wireless carriers restrict the models of cell phones that can be used on their networks and the software that can be downloaded onto them, such as ring tones, music or Web browser software.

Martin and the other four FCC commissioners are mulling different scenarios for how the auction should be conducted amid intense lobbying by existing wireless carriers, consumer groups and potential new bidders such as Google.

The airwaves to be sold in the 700-megahertz band are considered valuable because they can travel long distances and penetrate thick walls. The auction, to be held later this year, is seen as the last opportunity for a new player to enter the wireless market.

Later on Friday, a key House committee announced it had asked all five FCC commissioners to testify at an oversight hearing on Tuesday.

In a letter to the FCC, House Energy and Commerce Committee Chairman John Dingell asked a series of questions about how Martin's proposed open-access rules would be enforced and whether they would increase costs to wireless carriers and consumers.

Google and some consumer advocates have pushed for a list of open-access conditions for a large piece of the airwaves and argue that the wholesale requirement should be among them to promote more competition for wireless service.

A source familiar with Martin's auction plan said the minimum bid requirement was set at $4.6 billion. If no bidders met the minimum amount, the auction would be run without the open-access conditions.

Blair Levin, an analyst with Stifel Nicolaus, said Google's offer "is a way to take that (money) issue off the table."

"It certainly helps those who are supportive of Google's position to be able to say the treasury is going to make at least as much as the treasury thought it was going to make," Levin said.

Levin said he did not think there was enough support currently among the five FCC commissioners to pass the wholesale requirement sought by Google.
But, he said, "The odds have gone up." The 700-mHZ airwaves are being returned by broadcasters as they move from analog to digital signals early in 2009.

The move to bid on the wireless airwaves was overshadowed on Wall Street by disappointment over Google's second quarter results, issued last week, which were hurt by a costly hiring spree that saw its shares close Friday down 5.2 per cent to $520.12.

Indian geeks rated good citizens in cyber city

Indian geeks are among the most sought after worldwide to tweak, maintain and test code but when it comes to cyber crime, thankfully they are not among the leaders. Research by US-based IT security and control firm SophosLabs shows that though India is one of the world’s most technologically booming nations, it ranks surprisingly low when it comes to churning out malware.

The study shows that only 2.8% spam is relayed from India, whereas the US tops the chart at 19.8% followed by China at 7.5%. The study suggests that the onus for low cyber-crime in India goes to a ‘cultural difference’.

Though the US still produces more malware , viruses and spams than any other country in the world, such jobs are increasingly getting outsourced to countries where labour is cheap and legitimate IT jobs are scarce. So scammers in these countries (like China ) are insulated from laws that protect their victims .

That explains China, Brazil and Russia’s inclusion in the top 10 spam-relaying countries of the world. India ranks 11th in the dirty dozen list.

When compared to other countries which feature in the list, India has legitimate IT jobs and good programming knowledge, which can reasonably establish why Indians shy away from the illegal use of such knowledge. “In India, strong cultural values act as a dampener for any illegal activities and we have already seen cyber-crime cells cropping up in different parts of the country, further reducing chances of relaying malware,” contends Nandkumar Saravade, director of cyber-security at the National Association of Software and Services Companies (Nasscom).

There are 20-million computers in India, under 2% of the population, which indicates below par penetration. “Cyber-crime increases with PC penetration,” claims Deepankar Sanwalka , head of KPMG’s forensic department.

He cites stringent control measures by the ITeS sector off late as a reason why cyber-crime in the country has been under check. New analysis from Frost & Sullivan’s ‘World Anti-Malware Products Markets’ reveals that the world market for anti-virus solutions reached $4.7 billion in 2006, up 17.1% from about $4 billion in the previous year and expects this market to grow at a 10.9% CAGR from 2006 to 2013, reaching $9.7 billion by 2013. According to the Sophos study, the overall volume of spam rose by around 4.2% during Q1 2007, when compared to the same period in 2006.

Highest Paid Executives in India

In another marker of India’s economic might, salaries of top executives have started scaling new heights. Gone are the days when a Rs 60 lakh package was hailed as a lofty achievement. Now, a Rs 1 crore salary cheque has become commonplace not only for CEOs, but also for lesser people in the pecking order. And entry level executives getting dream salaries is no longer headline news. Indian execs are the luckiest ones for their average pay increase of 14 per cent is the maximum in the Asia Pacific region this year. Reliance Industries’ Mukesh Ambani is the highest-paid head honcho in the country according to a list of highest-paid executives compiled by Business India magazine.

Mukesh Ambani

Leading the pack, India’s richest man Mukesh Ambani earned Rs 24.51 crore in 2005-06 as Chairman and Managing Director of Reliance Industries. Ambani’s pay check has seen an increase of 12.8 per cent compared to his salary of Rs 21.72 crore last year. His brother Anil Ambani is way behind at No. 15 earning Rs 7.32 crore a year.

The Munjals

Hero Honda’s Munjals are the second and third highest paid executives in the Business India list. While Hero Honda Chairman Brijmohan Lall Munjal took home Rs 15.58 crore, the company’s MD and CEO Pawan Munjal comes third with a remuneration package of Rs 15.22 crore.

Naveen Jindal

Jindal Steel and Power MD and Rajya Sabha MP Naveen Jindal has climbed 20 places to be at No. 4 in this year’s Business India list. Jindal earned Rs 13.54 crore in 2005-06, which is a whopping 71 per cent increase over his 2004-05 salary of Rs 3.88 crore.

Sunil Bharti Mittal

The No. 5 slot also sees a new entrant. Bharti Airtel CMD Sunil Bharti Mittal was richer by 12.61 crore this year. The more than 100 per cent pay hike has pushed him to the present fifth position gaining nine places since last year.

Miki Yamamoto and Takao Eguchi

If Mukesh Ambani is the clear leader in individual terms, Hero Honda is the sure winner in company terms for it has contributed four people to the Top Ten list. The sixth and seventh places in the Business India list go to Honda executives Miki Yamamoto and Takao Eguchi respectively. While Yamamoto took home Rs 12.63 crore, Eguchi earned Rs 12.55 crore.

The Marans

Media mogul Kalanithi Maran and his wife Kaveri Kalanithi are the new entrants in the Business India list at No. 8 and No. 9. As CMD Maran earned Rs 11.13 crore in 2006, while Kaveri earned Rs 10.26 crore as Joint MD.

A J Agarwal



Shipping giant Mercator Lines’ Joint MD A J Agarwal occupies the tenth place in the Business India top executives list. Agarwal earned Rs 1 crore in 2005-06

Reliance Communications Acquires US Based Yipes For $300 Million

Reliance Communications Limited today announced the signing of a definitive agreement to acquire US based Yipes Enterprises Services ("Yipes"), the leading provider of managed Ethernet services.

Accelerates Reliance Communications penetration into the lucrative Rs 400,000 crore ($ 100 bn) global enterprise data market Yipes is strongly positioned in Ethernet, by far the highest growth segment in the US datacom market, with an annual growth rate of over 30% Yipes has strategic network presence in the top 14 US metros, which account for 40% of the total US datacom market

Yipes has nearly 1,000 enterprise customers and provides mission critical communications platforms for entire industry communities. Reliance will rapidly expand Yipes coverage within the US and take Yipes to nearly 40 new markets globally where Reliance is already present in Middle East, Asia and India.

By synergizing FLAG and Yipes, Reliance is poised to become the global leader in Ethernet, a Rs 100,000 crore ($ 25 bn) market wordwide by 2010.

Anil D. Ambani, Chairman of Reliance Communications, said "This is the largest acquisition that Reliance Communications has ever made. The acquisition of Yipes drives forward our strategy to offer the most sophisticated, cutting edge data communication products and services, specialising in application and content distribution, spanning developed and emerging markets. We see enormous potential to rapidly expand Yipes coverage in the US and to globalise Yipes service by leveraging our customer relationships and network reach around the globe. We confidently expect this acquisition to significantly enhance the growth rate, profitability and returns of our global data business."

Highlights of Yipes business

Yipes is the leading provider of managed Ethernet and application delivery services for the global enterprise. Established in 1999, Yipes has pioneered Metro Ethernet and has developed leading edge proprietary products to meet the exacting requirements of its customers. Ethernet is the fastest growing segment of the data communications market, driven by the migration of enterprise customers from older private network technologies. Infonetics Research forecasts the Ethernet services market will surge by over 30% CAGR from 2006 to 2010 when it will top $ 25 billion worldwide.

Yipes has nearly 1,000 enterprise customers, concentrated across 4 industry verticals - financial, legal, government and healthcare - which currently account for 50% of the Ethernet market. Yipes has developed communications platforms that act as the oxygen for entire industry communities. For example, Yipes is the leading direct communications provider to the New York Stock Exchange, Chicago Mercantile Exchange and NASDAQ and interconnects with multiple market participants and intermediaries.

Yipes, headquartered in San Francisco, owns over 22,000 route kilometres of fibre across 14 US metros, which covers around 40% of the total US datacom market. In addition, Yipes is present in London, Hong Kong and Tokyo.

Pramod Haque, Yipes Chairman and Managing Partner of Norwest Venture Partners, said "We saw long ago the impact Ethernet services would have on the telecommunications industry. Yipes has consistently brought fresh ideas and tangible innovation to this market. This acquisition of Yipes by India's powerhouse, Reliance Communications, sets the stage for a major transformation within global telecommunications."

John Scanlon, CEO of Yipes, said "Yipes pioneered Metro Ethernet services, extended it across the US and is poised to expand globally. With Reliance Communications, we aim to replicate our success in the US across the rest of the world. The financial sector, in particular, presents a key opportunity for us as we are well positioned to capture the market by meeting the fast-growing and stringent connectivity requirements of financial exchanges around the world. The financial connectivity market alone is expected to reach $ 6.3 billion by 2010 and grow at around 35 percent per annum."

Strategic fit with Reliance Communications

Reliance Communications vision for its Global Data business is to be a leading provider of sophisticated, cutting-edge data communication products and services, specializing in application and content distribution, which will span into developed and emerging markets, delivered over the FLAG Global Network.

The acquisition of Yipes is a key step in Reliance Communications plan to move up the value chain and closer to its customers in the Global Data business. It significantly increases Reliance's revenues from the enterprise segment internationally.FLAG and Yipes are highly complimentary in terms of their products, services, and networks.

With the acquisition of Yipes, Reliance will accelerate its penetration into the lucrative Rs 400,000 crore ($ 100 billion) global enterprise data market and will be better able to serve its international customers directly in the US.With the backing of Reliance, Yipes will rapidly double its coverage of the US market. At the same time, Yipes Ethernet services will be overlaid on FLAG's global next generation network, allowing Yipes to expand its reach worldwide and enabling FLAG to create significantly more value from its network assets in the strongholds of India, the Middle East, and East Asia.

Reliance Communications, through an affiliate, is acquiring 100% of Yipes in an all-cash transaction. This constitutes Reliance Communications largest acquisition to date. Yipes will operate as a strategic business unit, fully integrated strategically and operationally within FLAG Telecom. The key senior management of Yipes has committed to remain with the business and will continue with their present responsibilities.

Punit Garg, President, Global Business, Reliance Communications commented "The acquisition of Yipes will place Reliance Communications among the top three Global Ethernet service providers in the world. Reliance Communications with FLAG has a strong foothold in India, the Middle East and Asia, including China, Hong Kong and Taiwan. We plan to leverage the significant headstart of Yipes in Ethernet services, double the coverage in the US domestic market, and rollout Yipes services over the FLAG Global Network. We are fully committed to bringing Ethernet services to nearly 40 new countries."

Persistent Systems on an ACQUISITION SPREE

After a long hibernation of acquiring ControlNet India, a 100% subsidiary of Campbell, CA based ControlNet Inc., for approximately US $ 2 Million (Rs. 9 crores)in the year 2005, Persistent Systems, a outsourced software product development services provider, today announced the acquisition of assets of the Indian arm of Metrikus Inc, USA. Through this acquisition, Persistent Systems and Metrikus Inc have entered into a revenue sharing agreement to jointly market business intelligence solutions.

All of Metrikus India's employees are now part of Persistent Systems family. The acquisition has enabled Persistent Systems to establish a foothold in Hyderabad.

Anand Deshpande, MD & CEO, Persistent Systems quoted: “This acquisition brings on board BI solutions expertise and a development centre in Hyderabad.”

How to Actually Execute Your To-Do List

Have you gotten good at organizing your tasks in a to-do list, but have trouble actually executing them? You’re not alone.Getting things on your to-do list actually done is difficult because it’s really a collection of habits that most people don’t think about. Today, we’ll look at addressing those issues that stop you from doing things, and the habits needed to overcome those issues.

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10 Essential Habits for Freelance Workers

The key, I’ve found, is to develop certain habits that will keep you not only disciplined but successful. Simple habits, to be sure, but ones that can go a long way towards taking you from a broke freelancer to a happy and productive one. Here are 10 essential habits for freelance workers...

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Rupert Murdoch gets Dow Jones for $5 BILLION

Rupert Murdoch has succeeded with his $5bn (£2.5bn) bid for Dow Jones, owners of the Wall Street Journal, according to a report in The Business.Negotiations are finished and the board is confident the terms of the deal will be accepted by the Bancroft family, which controls a majority of voting shares in Dow Jones.

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Emerging Opportunity - Testing Services

The market for offshore Testing Services is growing at a rapid rate and presents a major, untapped opportunity for Indian outsourcing vendors. Most key players in the industry, have in fact, built robust Testing Services portfolios and deployed Best Practices within this segment.

According to Gartner Inc., the worldwide market for Testing Services is forecast to grow to US$ 13 billion by 2010, with 45-50 percent (around US$ 6 billion) getting outsourced. Indian IT-BPO players generated export revenues of about US$ 280 million from Testing Services in 2006. A significant potential therefore exists for Indian IT-BPO companies providing solutions in this space.

The challenge facing the Indian testing services industry

The rapid growth in demand for software testing services has had a corresponding impact on the supply side. Of all the challenges faced by the industry, the most crucial was the paucity of skilled manpower In 2006 alone, there was a shortfall of 15,000 software testing professionals in India. This shortfall is stated to be a result of the following:

- The fact that young professionals are not aware of the career potential of the testing market.

- The lack of higher business domain knowledge, process knowledge and client
management skills among testing professionals, a major requirement for the
market.

- The absence of training and learning programs that cater specially to this
market. As specialized software testing as a career has emerged only in the
last 7-10 years, academic institutions as well as corporate entities are
not geared fully to nurture software testing professionals.

Clearly, Indian IT-BPOs focused on the Testing Services marketplace have to tune themselves to the emerging technology and business trends shaping this opportunity. Investments in the right testing tools, relevant testing methodologies and skilled manpower is becoming a must today. Indian IT-BPO organizations need to keep these factors in mind to step up their share in the fast growth Testing Services segment.