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Archive for January, 2010

Syntel ventures into Indian outsourcing market

January 30th, 2010

Nasdaq-listed company Syntel (NASDAQ:SYNT) has joined the list of multinationals aspiring to capture a slice of the domestic IT outsourcing market.

The company is looking to offer its services in the areas of healthcare, e-governance, telecom and financial services, Mr Keshav R. Murugesh, President and CEO, told Business Line recently. In line with this strategy, it is on the look out for ‘tuck in’ acquisitions in healthcare and e-governance.

Syntel has already bagged its first customer in India — a private sector banking company.

With almost every software vendor pledging to offer services to Indian customers, isn’t the domestic market getting overcrowded? Mr Murugesh does not seem to think so. “The pie is still huge…even if software vendors spend the next 20 years only doing Government projects, they won’t have any complaints,” he said.

Analysts feel IT companies taste mixed success in government projects due to project delays, frequent changes in leadership and increased public scrutiny. Even in the private sector, the pricing of deals tends to be highly aggressive, which could compromise on project margins.

However, Mr Murugesh believes margins can be maintained by ensuring delivery of services from lower tier cities.

Going forward, Syntel aims to reduce its exposure to the US and hopes to generate 30 per cent revenues from the rest of the world as against 15 per cent currently.

Source:http://www.istockanalyst.com/article/viewiStockNews/articleid/3822561

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Tata Looks to Expand Among SMBs

January 30th, 2010

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In a tough economy, the largest IT service providers — outsourcing firms and systems integrators — have been known to move downstream, seeking smaller deals with smaller customers. Cloud computing — and the ability to reduce the vendors’ cost of service — may also tempt the multi-billion-dollar, multinational IT firms to journey downmarket. Whatever the motivation, $6 billion Tata Consultancy Services (TCS) is making moves in the small and medium business (SMB) arena. Here’s how.

The consulting and business process outsourcing company is “stead-fast in increasing its presence” in that sector, according to research brief from Technology Business Research (TBR). TCS’ offering: IT-as-a-Service.

According to TCS, this product delivers centrally hosted applications in a shared-services environment.

“TCS will deliver the entire IT landscape of the customer organization including hardware, application, and network connectivity to the data centre,” the company says.

The TBR report notes that TCS late last year disclosed plans to migrate IT-as-a-Service on a pilot basis into India, Singapore and Europe.

The report states: “… TCS’ ITaaS solution can help the firm increase its presence in the global SMB market as the solution will be attractive to SMB clients who can leverage it to reduce hardware and software licensing costs.”

But the going won’t be easy. To this point, multinational companies have yet to “break into the SMB market successfully from a services standpoint,” said Erin Hichman, analyst with TBR’s Professional Services Business Quarterly.

TBR believes the task of penetrating the SMB space will be difficult even in TCS’ home base of India. Hichman said local success could be possible if the consulting firm leverages the brand of parent company Tata Group. In India, TCS will likely compete against Wipro and HCLT, she said. Both companies have as-a-service offerings.

Globally, TCS may encounter Fujitsu. Hichman said Fujitsu’s as-a-service solutions are available in Europe. Fujitsu announced its Infrastructure-as-a-Service product in November. Hichman said that service has also rolled out to Japan and North America. Dell Services may also prove a rival as it increases its presence in the SMB market, she added.

Oh, and one more thing: Kaseya’s software could be the platform behind Tata’s IT as a service push.

Source:http://www.mspmentor.net/2010/01/29/tata-looks-to-expand-among-smbs/

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Atlantic City government IT outsourcing “inefficient, ineffective”

January 30th, 2010

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Atlantic City doesn’t have a single city employee overseeing its IT infrastructure, resulting in “inefficient, ineffective and unsecure processes,” according to a report by the New Jersey state comptroller [PDF].

Since 2006, the city has outsourced its IT functions to Newark’s New Jersey Institute of Technology, paying $2.47 million over 4 years for services covering the city’s networked PCs, servers and desktop support, GovTech reports. The comptroller recommends that hiring two IT staff members could allow “substantial savings and a full-time dedicated staff available on a daily basis to serve all City departments.”

The report also alleges that city awarded annual contracts to NJIT and a subcontractor without a state-mandated competitive bidding process. Though NJIT is exempt from that process as an education institution, it subcontracted work to a private company, and the city sometimes paid that subcontractor directly, giving the “apperance of an attempt to avoid State bidding requirements,” the Comproller’s Office said in the report.

The report urges the city to develop an IT strategy, improve its computer hardware and software tracking system and review user access to the network.

Source:http://technicallyphilly.com/2010/01/29/report-atlantic-city-government-it-outsourcing-inefficient-ineffective

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IT stocks dip on Obama’s outsourcing talk news

January 30th, 2010

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US president Barack Obama, in his State of Union address yesterday, reiterated a campaign pledge to end tax breaks for US companies that outsource jobs overseas.

He said, to encourage businesses stay within US borders, it was time to finally slash the tax breaks for companies that shipped jobs overseas and instead give those tax breaks to companies that created jobs in the US.

According to a Tholons report, India ranks among the top five outsourcing destinations along with the Philippines, Ireland, China and Brazil. India earned revenues of $40 billion from IT-BPO export services in 2008, out of which the US accounted for around 50-60 per cent.

Following Obama’s address, shares of some leading IT exporters fell sharply with Tata Consultancy Services down 3.3 per cent at Rs715, Infosys down 2.7 per cent at Rs2,425 and Wipro falling 4.9 per cent at Rs640.

According to analysts, though the move would likely impact India’s IT sector, as India is known to be the world’s back-office, though the overall impact on the economy may not be significant given the fact that the IT sector accounted for only around 5.8 per cent of India’s gross domestic product in 2008-09, up from 1.2 per cent in 1997-98.

They also point out that, though, the move is aimed at arresting the flow of jobs out of the US, industry sources in the US are not quite sure about its exact impact.

Source:http://www.domain-b.com/infotech/itnews/20100129_barack_obama.html

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Obama to cut tax breaks for outsourcing U.S. firms

January 29th, 2010

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In a bad news for India’s IT-BPO sector, U.S. President Barack Obama said he would slash tax breaks to American firms that move jobs abroad.

“To encourage… businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs right here in the United States,” he said in his first State of the Union address on Wednesday. Mr. Obama said: “Now the House has passed a jobs bill that includes some of these steps [to slash tax breaks]. As the first order of business this year, I urge the Senate to do the same… People are out of work. They’re hurting. They need our help. And I want a jobs bill on my desk without delay.”

Mr. Obama said: “Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed.” Pushing for the bill, he said job creation would be the country’s number-one focus in 2010. The bill will provide for taking $30 billion of the money Wall Street banks repay and use it to help community banks give small businesses the credit they need.

“Now, the true engine of job creation in this country will always be America’s businesses. But the government can create the conditions necessary for businesses to expand and hire more workers,” Mr. Obama said.

Citing India and China as countries that were going ahead with economic revamp, Mr. Obama said the U.S. could not accept a “second place” and should get serious about fixing its problems since the worst of the financial crisis was over. “Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China’s not waiting to revamp its economy. Germany’s not waiting. India’s not waiting.”

Source:http://www.hindu.com/2010/01/29/stories/2010012958090100.htm

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BMI renews and extends its outsourcing contract with Attenda to adopt Cloud Services

January 29th, 2010

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Attenda Limited, the Always On Managed Services company, today announced that leading airline bmi has signed a three year contract renewal for the operational management of many of its key business applications, including re-platforming of the existing associated infrastructure.

bmi is the second largest airline at London Heathrow and operates services in UK, Europe, the Middle East, Central Asia and Africa. bmi has been an Attenda client since 2004 and the partnership has grown since then with Attenda now being one of bmi’s main IT suppliers.

Within the contract, Attenda will continue to host a number of bmi’s key business applications.

The airline has advanced plans to move much of the infrastructure delivered by Attenda onto Attenda’s new VMware vCloud platform.

As Peter Federico, Group IT Director, bmi explains, “Using Cloud Computing, based on VMware’s technology and provided to bmi by Attenda, gives us the capability to scale our computing capacity on demand, in order to meet spikes in activity. Clearly Cloud Computing is core to our day-to-day operations.”

The technical solution is based on various technologies and includes deployment of the Attenda Virtualisation Platform, shared SAN and NAS and other Attenda shared services. Attenda’s Virtualisation Platform is a scalable, demand-based IT infrastructure that delivers unprecedented business agility through the timely deployment of computing resource, storage and networking, to provide additional capacity when needed. The Virtualisation Platform transforms the IT environment, helping businesses to become more agile, deliver a better service and reduce costs.

Federico concludes, “Moving to a Cloud Computing model with Attenda will play a key role in our ongoing drive towards reducing the total cost of ownership of our IT infrastructure and increasing our operational agility.”

Source:http://www.realwire.com/release_detail.asp?ReleaseID=14934

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Freelancer.com First Outsourcing website to add iPad category

January 29th, 2010

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Freelancer.com, the world’s top micro-outsourcing website, today launched the first category dedicated to the building and development of Apple iPad applications.

Yesterday, Apple Computer launched the long awaited iPad tablet computer, which had the technology industry and consumers waiting with huge interest. The new format device is expected to spur a large and diverse industry of applications development with its cousin, the iPhone, now boasting over 140,000 applications in the AppStore.

iPhone application development quickly became one of the most popular categories on Freelancer.com and is the quickest, easiest and most cost effective way to get an application built.

“Since launching the category, thousands of iPhone applications have been developed through our site,” said Matt Barrie Chief Executive of Freelancer.com. “The launch of the iPad opens up the possibility for a new generation of applications. Freelancer.com will be at the forefront of this new era.”

Today the iPhone category has well over 100 active projects on any given day, with application development starting at USD$200. Most iPhone projects are well under US$2000.

“The availability of thousands developers from all over the world will allow application enthusiasts to become application developers,” Matt Barrie said. “Until now, you had to be a programmer or employ the services of an expensive agency to build an application. Now anyone with an idea can develop their iPhone or iPad ideas at a fraction of the cost.”

Approximately 550,000 jobs have been posted to date, for a sum of US$50 million.

Source:http://www.prnewswire.com/news-releases/freelancercom-first-outsourcing-website-to-add-ipad-category-82980012.html

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