Archive for March, 2012

Server Management, Troubleshooting Ties Up IT Departments

March 31st, 2012

IT teams from midsized U.K. and U.S. businesses polled still spend more than half (56 percent) their time on server management and troubleshooting in a typical month, and only 28 percent on strategic, “value-added” activities, according to a survey released by cloud computing specialist Rackspace Hosting.

Despite the widespread availability of cloud and managed hosting, many organizations are clinging to physical servers, leaving in-house IT teams struggling with troubleshooting and capacity planning amid demands from their bosses to do more for less, the survey found.

The report shows that most U.K. and U.S. businesses seem to have either made poor progress or taken a step backward regarding server management. The majority (59 percent) of U.K. respondents admit they have either bought too many servers, which has wasted money, or bought too few, which has meant a lack of capacity. In 2009, 55 percent of respondents said they got this wrong.

In the United States, the situation is worse: 67 percent said they’ve purchased the wrong number of servers, compared with 47 percent in 2009.

The respondents indicated that U.K. IT teams spend 50 percent of their time on server maintenance and troubleshooting today, down from the 57 percent revealed in a 2009 Rackspace survey. Yet using these results, a U.K. IT team member on average would still spend an estimated 912 hours a year just servicing servers, rather than helping drive innovation.

U.S. businesses reported that their teams spend even more of their time—62 percent in a typical month—on server maintenance, and only a quarter of their time (25 percent) on value-added work.

In addition, the “hassle of managing servers” seems to be a problem for far more U.K. and U.S. businesses now (79 percent) than was indicated in the 2009 survey (58 percent). Similarly, top gripes regarding managing servers physically on-site—hardware maintenance (53 percent), having to be available 24/7 (50 percent), and the cost of buying and maintaining servers (40 percent)—are voiced by more respondents in both the United States and the United Kingdom now than as reported in the 2009 survey.

“Problems associated with having to manage and maintain servers are often readily solved by cloud and managed hosting services. In 2009, one-third (33 percent) of businesses surveyed expected to outsource their in-house servers in the next two to five years,” said Fabio Torlini, vice president of cloud at Rackspace. “However, over two years later, the new study suggests that many midsized businesses are still chained to their servers, and may be spending unnecessary time and money on them.”

A large percentage of U.K. and U.S. IT decision makers interviewed said they are under mounting pressure to support business growth and change (89 percent, up from 65 percent in 2009), improve flexibility (88 percent, compared with 66 percent) and help drive internal innovation (88 percent, up from 61 percent). In addition, businesses are also facing demands from the board to reduce IT spending, according to 87 percent of respondents (up from 65 percent in 2009).

This year’s results show that 38 percent of respondents now expect to outsource their in-house servers in two to five years (35 percent in the United Kingdom and 40 percent in the United States). Top barriers to moving to cloud hosting—questions regarding security (54 percent), reliability (47 percent) and return on investment (42 percent)—are holding back more organizations now than indicated in Rackspace’s 2009 survey. For example, security is seen as a barrier to server outsourcing by twice as many respondents in 2012 (54 percent), compared with 2009 (27 percent).

According to Torlini, the way the cloud and managed hosting market is maturing, as suggested by the study, represents a challenge to users and cloud and managed hosting service providers alike. “In 2009, almost two out of five (40 percent) of respondents didn’t know what cloud computing was. In 2012, everybody does, and is looking at it – the benefits and the issues,” he explained. “The challenge for midsized businesses is to stop unnecessarily holding onto their in-house physical servers, and give themselves a chance to focus on more important and valuable work. The challenge for cloud service providers is to provide the right advice and services to help more of them overcome the barriers to doing just this.”


GEM GLOBAL Selected as IT Vendor to Fortune 100 Entertainment Company

March 31st, 2012

GEM GLOBAL, a Central Florida based Talent Acquisition, Staffing and Recruitment Process Outsourcing (RPO) firm, today announced that it has been selected by a Worldwide Entertainment Company located in Central Florida to provide information technology staffing services.

GEM GLOBAL will provide contingent IT professionals including project managers, application developers, web developers, database developers and quality assurance analysts/testers for projects based in Central Florida.

“We are very excited about the opportunity to work with such a large and reputable company,” comments David Cassese, President of GEM GLOBAL, “and we are looking forward to this new partnership.”

GEM GLOBAL is a Talent Acquisition, Recruitment Process Outsourcing and Project-Based Solutions provider that serves a broad spectrum of industries. They provide technical and business-facing expertise through staff resources and practice solutions. Their professionals combine industry, technology and regulatory expertise that result in cost-effective solutions for their clients.


India at centre stage of IT services

March 31st, 2012

India continues to retain its position as the world’s leader in the global outsourcing market of Information Technology and Information Technology Enabled Services (IT-ITeS). It accounts for almost 58 per cent of global sourcing in 2011 as compared to 55 per cent previous year.

Giving this information in a written reply in the Rajya Sabha, Minister of State for Communications Sachin Pilot said a number of countries like Philippines, China, Malaysia were steadily gaining momentum as destinations for IT-ITeS investments.

Quoting statistics provided by the National Association of Software and Services Companies (NASSCOM), he said India’s unique value proposition of a mature customer-focused industry, domain experience, large pool of talent and proven track record had ensured that it remains at the centre stage of most global sourcing decisions.

He said 235 IT-IteS-specific Special Economic Zones had been notified across the country, which are contributing to IT-ITeS exports. The Minister said the Indian companies earned about $68.7 billion during 2011-12.


Pansoft Acquires Remaining 20% Stake in Pansoft (Japan)

March 31st, 2012

Pansoft Company Limited, a leading ERP software service provider for the oil and gas industry in China, today announced that the Company has acquired the remaining 20% stake in Pansoft (Japan) Company Limited, now making it a wholly owned subsidiary of Pansoft.

Pansoft (Japan) was established in August 2010 to provide outsourcing functions for Japanese clients, initially in the area of cell-phone software testing. Pansoft originally owned an 80% stake in the joint venture, with two Japanese companies, Management Information Center Co., Ltd. and Seven Colors Corporation (the “Partners”), owning the remaining 20% stake. The Company acquired the Partners’ 20% stake at no additional cost due to their failure to meet the terms of the joint-venture agreement, specifically to transfer sufficient orders from their pre-existing Japanese clients to the joint venture. The share transfer agreement was drafted in mid-February and executed recently.

“It is unfortunate that our Partners did not fulfill the terms of our agreement and forfeited their stake in Pansoft (Japan),” commented Mr. Hugh Wang, Pansoft’s Chairman. “The main issue was the Partners’ inability to fulfill the terms of the agreement regarding their pre-existing clients, and this issue has delayed Pansoft (Japan)’s reaching profitability. Since the start-up of Pansoft (Japan) in late 2010, we and our Partners have successfully established other channels and clients, and recent results have shown that the outsourcing-service business is on a clear growth path and will generate a good return on our investment and efforts. We will continue to guide its path to profitability and expect Pansoft-Japan to reach break-even in the 2012 calendar year.”


IT Outsourcing to Double Market Share by 2016

March 31st, 2012

Information Technology Outsourcing (ITO) in the Philippines has the potential to double its global market share by 2016, with tremendous benefits to the economy, given that IT Outsourcing is as vast an industry as Business Process Outsourcing (BPO). This was revealed at a recent membership meeting of the Philippine Software Industry Association (PSIA), by Alejandro Melchor III, Deputy Executive Director for Industry Development of the Information and Communications Technology Office of the Department of Science and Technology (DOST-ICTO).

Next to China and India, the Philippines has 3rd the largest annual supply of technical talent for IT in the Asia Pacific Region, likewise, the Philippines has consistently ranked number one in the availability of knowledge based workers worldwide, based on surveys done by US-based Meta Group. “We are currently one of the lowest cost destinations for IT outsourcing. Combined with the extensive IT work experience of our workforce, the wide variety of IT skills available and a growing global branding rivaling that of our doctors and nurses, we have the tools and the talent to be a major player in IT outsourcing,” Mr. Melchor said.” ITO is growing fast and is driven by converging global megatrends such as the growth of the knowledge economy and the global technology revolution.” He added.

DOST Secretary Mario G. Montejo cited the local ITO industry as one of the star performers of the past year. He cited joint industry-government statistics showing that the sector grew by 37% in 2011, generating around 50,000 full time employees and generating almost one billion dollars in revenues. He added that Filipino IT workers have a wide range of skill sets that include software development, programming, mobile platform expertise, mainframe skills and database platform proficiency.

Undersecretary Louis N. Casambre of DOST-ICTO also concluded that; “With the current momentum the industry has, we are confident that we can double our market share in ITO by 2016. Through ICT Public Private Partnerships (iPPP) like we have with the PSIA we are developing programs to accelerate growth in this sector.”

PSIA President Nora Terrado, said that the industry is pleased with support that it is getting from the government through ICTO. “We are confident with the quantity and quality of Filipino IT talent to support the ITO industry and with continued support from the government particularly in the areas of talent development and industry promotion we foresee that the Philippines will soon become an ITO powerhouse” Ms. Terrado said.


Growing protectionism in the US

March 31st, 2012

Many in the US believe that emerging economies like India or China are dumping cheap goods into the US markets and eating away manufacturing jobs. Outsourcing to Indian IT companies is taking service sector jobs away from the US to the Indian cities. They think that increased demand in fast-growing emerging markets is responsible for higher oil prices. Their solution: the US should stop practising free trade, as it is not serving its economic interest well.

However, a recent study by international trade experts, Robert Z. Lawrence and Lawrence Edwards, shows that there is a good correlation between import and employment growth in the US. The study concludes that increase in labour productivity and shift in demand away from manufacturing to services have caused the decline in manufacturing jobs, rather than cheap imports. The contribution of manufacturing to employment in the US has been declining by 0.4 per cent a year during the last 50 years, long before the US started running trade deficits with China or India.

Further, the major cause of rising oil prices is the relative decrease in the oil production in Organisation for Economic Co-operation and Development (OECD) countries, as compared to the rise in demand for it. The increased demand for oil in emerging economies, at best, partly explains the rising oil prices. High growth in emerging economies and improved productivity result in the deteriorating terms of trade for such economies and welfare gains for importing countries. As a result, exports from China or India benefit the US.

This logic can be applied to the services. Export of IT & ITES to the US helps American corporations improve their cost competitiveness. Indian IT majors (considered to move jobs away from the US) have, in fact, created direct and indirect employment opportunities for the American people.

According to a recent CII survey, in the last five years, Indian companies in the US have invested US$ 26 billion, and created 100,000 jobs. In fact, 5 per cent of the employees of Indian software companies like TCS, Wipro or Infosys in the US are non-Indians.


Protectionism is a high-cost option in an interdependent environment. India and the rest of the socialist countries have learnt it the hard way. Increased imports induce indigenous industries to be more competitive. Ultimately, it leads to increase in exports, as has been the experience of India. Post liberalisation, India’s exports have increased from US$ 18.5 billion in 1990-91 to US$ 251.1 billion in 2010-11.

In this period, India’s GDP has also increased from US$ 300 billion to US$1.8 trillion. Now, trade has become a key policy instrument for achieving economic growth in India.

With the slow progress of WTO Doha Round, all major countries, and blocs such as EU, ASEAN, India, China and Brazil are keen on signing bilateral and regional trade agreements to supplement domestic markets.

Realising the importance of freer trade in achieving faster growth, African countries are also contemplating a pan-African free trade area. Article 24 of GATT 1994 (and Article 5 of GATS) allows bilateral or regional trade agreements (BTAs/RTAs) if they cover substantial trade of the participating nations. But regional trade agreements can only be the second-best alternative to multilateral trade liberalisation under the framework of WTO.


Unsustainable debt situation will force future reduction in domestic consumption, a reality that the US cannot ignore. The US, then, will need export markets more than it does today to sustain its growth. This won’t be the case with China (with less than 40 per cent share of domestic consumption expenditure in GDP as compared to 70 per cent in the US) which possesses enough maneuverability to increase domestic consumption. The US needs free trade more than their emerging economy counterparts.

Trade barriers are higher in emerging economies than in the US. As a result, the cost of further opening up and remaining a free economy is less for the US. Emerging economies like China or India, too, need open markets for their exports and sourcing of raw materials that they don’t produce. This fact can be leveraged to break the Doha Round logjam.


Given the current economic clout of advanced emerging economies like China, India, or Russia (which is now a WTO member), it wouldn’t be easy for the US to insist on its trade agenda when increase in intra-trade among developing nations has reduced their dependence on the US or EU. Only 9.8 per cent of India’s merchandise exports were shipped to the US in 2010-11, as compared to 8.3 per cent to Africa.

To conclude the Doha Round, the US will need to engage emerging economies by being flexible on issues having serious trade implications. In India’s case, they are agricultural subsidies, in particular, those on cotton, sectoral proposal under NAMA (Non-Agricultural Market Access) and Mode 4 services.

Sectoral proposal seeks to impose duty-free trade in 14 key industrial sectors, including textiles & clothing, chemicals, fertilisers, pharmaceuticals, plastics, electrical and electronic goods. Considering the sensitivities attached to these sectors, it won’t be easy to get India (or any developing country) to agree to the proposal. Securing acceptability for sectoral proposal will require provisions for keeping a few items under each chapter in the sensitive list, rather than making its acceptance mandatory.

The US will also need to improve its offer on Mode 4 (movement of professionals) services. This will require greater flexibilities on the immigration policy than what the US would ideally want. Despite the growing sentiment against immigration in the US, it suits the US. Studies have shown that educated immigrants play a significant role in innovation, something the American manufacturing sector badly needs when competing with low-cost countries like China.

Services account for more than 65 per cent of global GDP, so any real trade gain has to come from opening up trade in services. Therefore, trade in services should be the focus of any multilateral trade negotiation, as manufacturing alone cannot provide job opportunities for everyone, either in India or in the US.

Hence, a speedier recovery of the US is the key to lessen the adverse impact of the Euro Zone crisis. This isn’t possible in the absence of seamless movement of goods and services across regions. It’s time the US recognised its role in getting WTO Doha Round negotiations concluded. Its successful conclusion is good for the US and rest of the globe, all suffering from one economic crisis after another. Waiting for the next US Presidential election will be too late.


How to find the right IT help

March 31st, 2012

B. Robinson makes and licenses eyewear out of its midtown Manhattan office. Though it has more than 50 employees, it uses the Lloyd Group, a Manhattan-based information technology firm, for tech support, rather than an on-staff IT professional. “We could have brought in a generalist,” says Co-President Cliff Robinson. “Instead, we hired a firm that has a number of experts for essentially the same price and got a whole team that works 24/7.”

As technology needs keep increasing, even the most low-tech businesses may find themselves in need of IT advice. And, like B. Robinson, more and more small firms are contracting with outside companies to help them with everything from rebooting a desktop to integrating software applications.

Is outsourcing your IT upkeep right for your company—and if so, how can you find the right consultant? Here are some key questions to consider.
How complex are your needs? With companies being bombarded with more computing issues than ever, the level of IT expertise needed at many small firms is rapidly moving beyond the capabilities of one person. “A person on staff can probably take care of the server and provide desktop support,” notes Jim Avazpour, a 20-year veteran of IT outsourcing now heading Infrastructure Services at Dumbo, Brooklyn-based OS33. “But can that one person provide applications, say, integrated into a cloud? Inevitably, you’re going to have problems.”

If your company does need a team approach, make sure you choose a consulting firm with the bench strength to handle your specific needs. Some firms provide a level of service similar to a corporate IT group. For instance, the 60 employees of Lloyd Group are divided into teams that take responsibility for day-to-day technology operations, do preventative maintenance on equipment, and offer advice on purchases—looking ahead to the needs they may have in the next year or two. “We sit in on all strategic meetings, track all tech and mobile devices, and manage software,” says CEO Adam Eiseman.

Will it be cost-effective? Most IT outsourcing companies use a rolling-fee scale, based on number of computers, intricacy of programs and the complexity of government regulations specific to each industry. The Lloyd Group’s average client spends about $100 per user each month, although the price can go as low as $40 per user. Mr. Eiseman estimates that a company with 42 computer users, at $80 per user, would spend $3,360 a month—far less than the cost of one on-staff IT nonspecialist.
Will they be there for those inevitable crises? Not only should the help desk be available at night, weekends and holidays, but your consultant’s team should have a mandate to anticipate problems. For instance, the Lloyd Group made sure clients’ data were backed up before last summer’s Hurricane Irene.


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