Archive for March, 2011

‘IT sector expected to grow at rate of 10 percent’

March 1st, 2011

Ahmed Ali Ashadawi, CEO and President of Al-Falak Electronic Equipment and Supplies Company.

Saudi Arabia is required to encourage the country’s private sector to train more Saudis in the field of information technology (IT), an area that lacks trained professionals, said a high-ranking official of Riyadh-based IT company.

Ahmed Ali Ashadawi, CEO and President of Al-Falak Electronic Equipment and Supplies Company said that Saudi IT companies should either be encouraged to establish technical colleges or support the existing ones for training programs that suit the job market.

Al-Falak provides technology-based end-to-end solutions in Saudi Arabia and Middle East.

Amidst increasing demand in the job market, the Kingdom is still short of trained IT professionals, Ashadawi said. “Finding trained Saudi IT professionals is a problem that companies have been facing in Saudi Arabia,” he added. “We believe that the Kingdom would benefit more economically from investing in the training of its people in technical institutions. which can provide talented IT personnel with the necessary skills required in the local job market.”

The Saudization scenario at Al-Falak is totally different, he said. The company has been investing in its HRD program and as a result, has already achieved 50 percent Saudization in all its IT jobs. “In fact, over 50 percent of our workforce are Saudi nationals, far exceeding the country’s condition of mandatory 30 percent Saudization,” he said.

“One of our key priorities is to invest in our people, which is why we have set up an innovation committee with a mandate to leverage the expertise and ideas of our employees to further expand the company and improve our operations. He added that the company benefits from its access to a very talented pool of internationally certified Saudi technical practitioners that were trained by Al-Falak’s sister company Alkhaleej Training and Education, which has branches across the Kingdom.

Developing trained local manpower is in the mutual interest of both public and private sectors as the Kingdom’s IT market is expected to grow at a rate of 10 percent through 2013, he said. Saudi Arabia has been investing heavily in its IT infrastructure by installing more fiber optic line. “The figure could go up further once planned broadband projects go online. Around 65,000 kilometers of additional fiber optic cables are projected to be installed in 2011, as compared to around 11,000 last year,” he added.

Ashadawi said that for some time now, Saudi Arabia has been working to implement e-commerce and to achieve efficiency in e-governance. One bottleneck that has arised is limited broadband capacity, which he believes the extra fiber optic cables can solve in the coming months. He said that the country’s IT sector has been engaged in large-scale lump-sum projects over the past few years in order to keep pace with elevated IT demand from the government and private sectors for the services such as system solutions and consulting; system integration and networking; IPTV solutions; analytical and business intelligence and data warehousing. “Al-Falak has been growing with the country’s IT sector and has been adding new business lines such as general contracting and manpower outsourcing to meet the evolving needs of our clients,” Ashadawi explained.

“We have been in the business for three decades, during which we have been a local technology partner for some of the world’s top IT names such as SAS, HP, Oracle, Symantec and Microsoft.”

Al-Falak’s other strategies would be to reinforce their market share through expansion practices of retail and distribution channels and acquisition of companies that compliment the company’s activities and goals.

“Al-Falak has been able to tap its infrastructure and know-how to broaden its regional reach, which now covers Dubai, Abu Dhabi, Bahrain, Kuwait, Qatar and Sudan on a project-to-project basis. We have also invested in partnerships with international companies based in the US and Canada,” he said. “Local companies have to compete with their international counterparts. Saudi IT players should understand that they have to constantly enhance their product and service portfolios, as people will not only use the services offered by local companies,” he explained.

“We want to do more business with Microsoft and our other allies by expanding what we offer from their existing portfolios of products and services and even launching new joint ventures with them,” he said.

Al-Falak is the winner of three major Microsoft Awards for 2010, including Saudi Original Equipment Manufacturer (OEM), Distributor of the Year, and Microsoft Saudi Specialized Devices and Applications (SDA) Distributor of the Year. Al-Falak’s Distribution and Microsoft Product Manager, Anthony Fernandes, also received the Best Microsoft Product Manager award.

Source:http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2011030194856

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Infosys converts cloud threat into opportunity

March 1st, 2011

The cloud computing model has been widely perceived as a threat to the growth of the software outsourcing industry. Here is how Infosys came up with an answer

ShareThis A recent Gartner report predicts that 20 percent of businesses will own no IT assets by 2012 – a significant shift that the research firm predicts will be caused by cloud computing. For Indian IT service providers – this is a massive shift as the traditional sources of revenues – application development, application maintenance and implementation will be massively impacted.

As there is no software to install, maintain or develop – the cloud model has the ability to threaten the main sources, that Indian software service players typically derive their revenues from. Infosys saw this development almost two and half years ago, and\ accordingly started analyzing how cloud computing could be a possible threat, and how it could be converted into an opportunity by strategically positioning itself into areas where it could leverage the cloud computing model.

To better address the opportunities provided by the cloud computing model, Infosys also opened a Cloud Center of Excellence (CoE) that enables enterprises adopt cloud-based capabilities on public as well as internal private clouds. The software giant has already created three cloud-based business process-specific platforms – HR, procurement and processes specific to the advertising industry. The HR platform, which Infosys calls as HR-in-a box solution, has already been adopted by two customers.

With enterprises wary about adopting solutions on the public cloud, Infosys is seeing huge traction from enterprise customers who want its consulting expertise for building private clouds. The firm has close to 25 customers who are using its consulting services to adopt cloud computing solutions.

“Enterprise customers face several challenges in cost effectively migrating to the cloud. In addition to providing specialized frameworks and accelerators to help customers effectively adopt cloud computing solutions, we will also provide the specialists who can deliver the full potential of cloud-based solutions to end users,” says Raghavan Subramanian, AVP, Cloud Computing, Center of Excellence, SET Labs, Infosys Technologies.

This approach is perfect for Infosys and its customers. Customers can outsource their entire business process functions such as HR, and only pay for what they use. Infosys will not only supply the technology platform, but also the people to run it. So one side, it will leverage its traditional skills in helping organizations build private clouds, and on the other side, it will provide the business process management platforms that will be run in the cloud.

“We are naturally built for the cloud as we have similar experience in ramping up and scaling down teams and providing on demand models for our customers,” says Subramanian, pointing out to the synergies that exist between the outsourcing model and the cloud.

The cloud – an alternative delivery model
Almost a decade back, Infosys started laying down the foundation for its Global Delivery Model. This model fundamentally changed the dynamics of the software delivery model, and forced other global competitors to come up with remote offshore-based models.

It also significantly changed the way IT services were delivered. Today, the offshore outsourcing model is standard and most global competitors have perfected the art of providing software services from remote locations. It also significantly changed the way IT services were delivered.

With the advent of the cloud, Infosys has a similar opportunity. The cloud gives it location-agnostic capability to deploy services. It also gives it the capability to rollout services at a faster pace. For example, Subramanian points out that deploying business process platforms in the cloud from a vendor like Infosys will easily give a customer up to 40-50 percent reduction in deployment time.

The seriousness of the firm’s intent can be seen from the fact that till date the firm has filed seven patents related to cloud computing technologies. The world of private cloud deployment offers Infosys opportunities that are much larger than the traditional space that it operates. Infosys is also in talks with a pharmaceutical alliance for setting up a federated cloud – this will allow individual pharmaceutical companies in the alliance to securely select a computing environment on demand on Amazon for a particular workload.

Infosys also has a similar opportunity to offer cloud-based platforms on a pay-per-use model. Besides business processes on the cloud, Infosys is also experimenting with cloud-based app stores. For example, Aircel has used Flypp – a cloud-based application platform from Infosys that allows mobile operators to use ready-to-use experiential applications across devices.

Taking traditional services into the cloud
Besides creating cloud-based IPs, Infosys is also relooking at how traditional services can be delivered via the cloud.

“Traditional services such as testing and business intelligence (for unstructured data) have a clear advantage when delivered via the cloud route,” opines Subramanian. The CoE is actively working with the respective service lines on how existing IPs can be cloud-enabled. It is also simultaneously looking at offering its core banking solution, Finacle on the cloud – targeted at co-operative banks.

While it is still early days before cloud computing actually starts to impact the traditional IT software services ecosystem, Infosys’ approach shows how the cloud can be effectively leveraged as an alternative delivery model.

Source:http://informationweek.in/Cloud_Computing/11-02-28/Infosys_converts_cloud_threat_into_opportunity.aspx?page=1

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UK gas giant Centrica signs £250m cloud deal with HP

March 1st, 2011

Seven-year contract will see Hewlett-Packard deliver a “private cloud and utility-based computing environment” to British Gas’ parent company
Centrica, the UK-based utility company that trades under the name British Gas, has signed a £250 million ($400 million), seven-year IT outsourcing contract with Hewlett-Packard.

Under the deal, HP will provide utility computing services to Centrica. These will not be based on HP’s recently launched ECS Compute public cloud offering, but on its previously available HP Utility Services instead, although it is “likely” to migrate to ECS Compute in future, the company says. HP will also support a hosted “private cloud” environment for Centrica.

HP said that the services will be hosted in two of its UK data centres, but also that Centrica would receive support from its delivery centres in India, Malaysia and the Philippines.

Last week, Centrica announced annual profits of £1.9 billion, more than double its 2009 figure. This profit jump came as revenues grew by just 2% to £22.4 billion.
In 2010, trade union GMB criticised what it described as the “profit-at-all-costs culture at British Gas”, and alleged that Centrica was planning to axe as many as 4,000 jobs.

Centrica vigourously denied these claims, and last week CEO Sam Laidlaw insisted that the company’s profit would be reinvested in the UK’s energy infrastructure. “The government wants energy companies to fund £200 billion of investment over the next decade to ensure secure, clean energy for the future,” he wrote for the Daily Telegraph. “We can only raise this enormous sum of money if we are profitable.”

Centrica has had mixed success with outsourcing in the past. In 2008, it sued IT services supplier Accenture for £182 million over a billing system that it says was delayed, fraught with glitches, lost the company customers and damaged the British Gas brand. That legal dispute is still ongoing.

HP’s Enterprise Services business shrank by 2% in its most recent financial quarter, but the company has recently signed a number of large outsourcing deals, many of which have been in the utilities sector. These include a $400 million contract with BP, and a $1.4 billion deal with E.ON.

Source:http://www.information-age.com/channels/it-services/news/1605473/uk-gas-giant-centrica-signs-250m-cloud-deal-with-hp.thtml

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Indian IT’s reality check

March 1st, 2011

After two decades of leading a sheltered existence, India’s $76 billion outsourcing industry has stepped out of its comfort zone, with tax benefits under the Software Technology Parks of India (STPI) program ending. In last year’s budget, Finance Minister Pranab Mukherjee had extended the scheme, under which tech firms can avail themselves of a 100 per cent tax deduction on profits under sections 10A/B of the Income Tax Act by 12 months.

Now it appears he’s removed this sop, as the IT industry has gained scale and large firms (which account for 60 per cent of the sector’s revenue) no longer require this protective umbrella to sustain growth. Earlier, units set up using these benefits were eligible for a 10-year tax holiday if notified before March 2012 and operational by March 2014.

“Government has not considered the impact of this move on small companies,” says Pallav Nadhani, Founder of Info Soft global, a Kolkata-based software product developer. “Our small scale and strict SEZ laws around not moving existing people or machinery, makes life difficult.”

Large firms have already moved up to 90 per cent of their operations into special economic zones, as STPI benefits wound down. According to tax experts, outsourcing firms staying outside STPI would now be required to pay an effective tax rate of around 30 per cent (excluding smaller cesses and surcharges) and this could be a heavy blow for small enterprises, which account for 40 per cent of India’s outsourcing industry. What’s more, the imposition of MAT on SEZ developers and units could hurt firms who are headed there.

“The imposition of MAT on SEZ developers and units is retrograde as it seeks to impose tax on income received from investments made with a commitment of tax exemption. This is advancing the negative impact of the Direct Taxes Code and should have been avoided,” says Dinesh Kanabar, Deputy CEO and Chairman Tax, KPMG.

Source:http://businesstoday.intoday.in/bt/story/indian-its-reality-check/1/13535.html

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