Archive for June, 2014

Govt to cut perks of BPO firms perks

June 30th, 2014

The Board of Investments said it will reduce the set of incentives enjoyed by the business process management sector under the 2014 Investment Priorities Plan, as most outsourcing companies have already reached a high level of maturity.Outsourcing40

“We’re still giving incentives, but only partial. Incentives will be given to sub-sectors that are still undeveloped or need further push,” said BoI director for industrial policy service Corazon Halili-Dichosa.

She said the BoI would identify the missing parts of the supply chain and focus on incentives where they were mostly needed.

Pioneer projects in the BPO sector that are registered with the BoI currently enjoy incentives such as six-year income tax holiday, exemption from import duties and taxes, zero-rate VAT on sales, additional deduction from taxable income equivalent to 50 percent of the wages of additional workers in the direct labor force and exemption from local business taxes for up to six years.

The BoI has not released the new set of incentives for the BPO sector under the 2014 IPP, which is set to be approved by President Benigno Aquino.

Dichosa said while the BoI was encouraging the information technology-business process management sector to seek for more opportunities, only exported services would continue to receive incentives.

“If they cater to local [companies], then there is no more incentives for them,” she said.

Dichosa cited customer relations management, a sub-sector of the BPO industry that provide services to the local market.

Under the 2013 IPP, Filipino-owned call centers can obtain incentives as long as 50 percent of their sales are for export.  Foreign-owned call centers should have at least 70 percent of sales exported.

The IT-Business Process Association of the Philippines earlier asked the BoI to maintain the incentives given to IT-BPM to develop more value-added segments within the sector.

The Trade Department earlier said the 2014 IPP would be more selective in terms of categories or sectors that should benefit from the set of incentives that would be offered to industries.


How cloud technology can pose huge risks to your business

June 30th, 2014

From Google Docs to Dropbox, these programs make it easier for employees to access data on a range of devices in multiple locations.Outsourcing22

This could be anything from sharing content to sending internal messages, uploading pictures to storage and backing up data. But with more and more people using this technology, transferring data to cloud technology can put security at risk, without even realising they are doing so.

Unknown threats: IT departments left in the dark

“The biggest problem is that employees are using cloud technologies without vetting them for safety,” says Rajiv Gupta, CEO of cloud security start-up Skyhigh Networks.

“With liberated employees, it’s as easy as getting an email with a link and clicking on it. The IT department are usually the last to know, and it can be a serious risk to your data.”

This has generated a fear that appears to be seeping through businesses, as cloud security start-up Skyhigh Networks announced recently that they have raised almost $40 million in capital to expand its two-year-old business overseas.

Mr Gupta argues that the unknown threat of cloud security is the most dangerous aspect.

“In every company out there, it’s a big difference between the number of cloud applications approved, and the number that are being used.” He estimates that there could be between 10 and 30 times more applications being used than are known by information security officers.

Employees are unaware of how the programs they use can affect them

Many employees may not even realise they are putting their companies’ data at risk by using programs and applications like iCloud, Dropbox, and Evernote – but these are all cloud-based services that have the potential to be hacked. If employees use them to store valuable data, it poses big security risks.

Mr Gupta recalls speaking to the CEO of a bank about cloud space, which he knew all about and was confident his business was as secure as it could be with the cloud.

“Then he stopped and said, ‘Wait, I’m using Evernote to store my details. I create these codes, and even I am violating theses codes!’ We are all using cloud technology in different ways, to different degrees, and businesses must recognise and understand it all.”

Multiple mobile devices

One of the problems chief information officers are facing is their staff bringing smartphones and tablets into the workplace and using them with company and public WiFi.

Guy Bunker, product and cyber security expert at Clearswift cyber security solutions said: “As employees increasingly rely on mobile apps as a data hub for work files, including cloud collaboration, it’s more important than ever that mobile security is put in place, as well as ensuring best practise concerning passcodes.”

“As we move into the ‘bring our own app’ or BYOA era, businesses and employees have very little visibility over the data exchange between the devices and the cloud,” said Garry Sidaway, global director of security strategy at NTT Com Security.

“The Global Threat Intelligence Report showed that many applications that send sensitive data to the cloud are not being detected by anti-virus software.”

A centralised IT solution?

Gareth Maclachlan, chief commercial officer at mobile protection firm Adaptive Mobile says that a centralised solution to “identify and apply on sites employees may connect to” is the best way to mitigate the risks that can arise when using cloud technologies.

“There’s no other way of knowing whether people are using third party applications which could be unsafe,” he said. “We need to be sure that if we connect to a service that we know if it can become compromised or not.

Alternatively, he suggests that IT officers might consider outsourcing to third-party security firms to make sure their data is as safe as possible.

Bruce Grove, general manager for cloud gaming platform OnLive, is positive about the use of cloud computing despite its risks, and insists its use “will accelerate”, and that “companies need to embrace it”.

“The key is to understand the risks of cloud technology, and remember that it is just a tool to solve a problem of your security needs and business needs,” he said.

“Central management of cloud-managed data means that I can switch that data off at any time and then access it is I need to, but I don’t have to manage the individual devices.”

He also suggests that protection can be helped with multiple back-ups, resources, and points of access. Companies also have the option of developing their own cloud solutions that are purpose-built and managed for them directly, as opposed to using a third-party system.

“Companies in tight security industries, such as financial services, are looking into this,” he said. They want to keep everything within their own control.”

The blurring of boundaries between home and work

With access to cloud technology online available to almost all employees in the office and at home on the same device, the scope for bypassing the IT department for solutions to IT problems poses even more of a risk, with more unknown applications, and the use of public WiFi which can more easily be compromised.

“Our work lives are becoming more intertwined,” said Mr Gupta. “The consumerisation of IT has expanded, it’s convenient and employees like it. More often than not, the same devices are used at home as in work, and most people don’t think about it.”


Telecom providers to see significant new growth in revenues from Data Centre facilities

June 30th, 2014

TCL’s New Telco Data Centre – Pricing for the New Telecoms Data Centre – 2014 to 2019 report is based on a TCL survey of 57 key Telecom Providers around the world who have developed their own Data Centre infrastructure. From the survey the report identifies over 2,200 Telecom Provider Data Centre facilities with around 2.9 million square metres of space available – forecast as of the end of 2014.Outsourcing21

Selected Telecoms Providers are now spending from USD $100 million up to USD $300 million per facility on developing large campus-based Data Centre facilities – with multiple Data Halls to cater for cloud services across multiple countries. Other Telecom Providers are investing in Modular Data Centre (MDC) designs, which allows new Data Centre space to be deployed on an incremental basis in line with customer demand.

The New Telco Data Centre is above all now becoming a flexible Data Centre, with infrastructure used for internal networking, equipment, hosting, managed services and IT services as well as the traditional housing, colocation and IP connectivity services – and able to cater for a range of services and customer needs.

Although IP connectivity, housing and colocation remain core products offered by all of the Telecom Providers, there has been a migration towards cloud services. The key hosting and IT applications (such as server hosting, security and disaster recovery & back up services) are being virtualized and offered as an on-demand service – using a variety of flat rate pricing models.

The Telecom Provider is becoming more circumspect about bidding for large IT outsourcing deals and are instead providing partial outsourcing of individual applications or services using a virtualized on-demand platform. Pricing is based on a usage fee per hour or per month – which may also be based on a per device or per user basis.
The TCL survey discovers that cloud services are now being offered by 52 out of the 57 Telecom Providers in the survey – with the migration to new cloud services being a key driver for the development of new flexible Data Centre facilities by the Telecoms Provider worldwide.TCL also forecasts that the change-over to new larger high specification Data Centre facilities by the Telecoms Provider will allow higher average pricing per rack or per square metre to be charged over time as the operator moves up the value chain by offering higher IT power densities.

Additionally, as enterprises – and particularly companies in the SME segment – are only starting to become aware of the scalable benefits of cloud services, there remains scope for considerable growth in Telecom Provider cloud revenue as new enterprises migrate their applications to the cloud for the first time.

Although cloud pricing will remain under competitive pressure, TCL forecasts that the growth in service volumes will outweigh the price declines over time.

Overall New Data Centre revenues are forecast by TCL to increase by 28 per cent per annum over the 5 year period from the end of 2014 – ” from almost USD $3.1 billion per annum (2014) up to almost USD $7.5 billion per annum (2019) “.

Finally, TCL also forecasts that New Data Centre space will increase from over 2.9 million square metres (2014) up to 3.7 million square metres (2019) – an increase of almost 6 per cent per annum (but from a already high installed base as space becomes more utilized over time).

“The availability of new high quality New Data Centre stock will be critical in hosting new IT and cloud services for the Telecoms Provider,” says Margrit Sessions, Managing Director of TCL.

“Increasingly Telecom Providers will have a simple choice to make, whether to invest in their own Data Centre stock to cater for the range of SLAs, power and performance required by their customers or whether to outsource to other Data Centre specialists if they are to stay in the game of offering their own cloud services,” she adds.


Gartner: Global IT spending to grow 2.1% to $3.7 trillion in 2014

June 30th, 2014

Global IT spending is on pace to total $3.7 trillion in 2014, a 2.1 per cent increase from last year, but this growth rate is down from earlier projections of 3.2 per cent growth.Outsourcing39

The slower outlook for 2014 is attributed to a reduction in growth expectations for devices, data centre systems and to some extent IT services, according to a forecast by research and analysis firm Gartner.

“Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short-term IT spending outlook,” said Richard Gordon, Managing Vice-President at Gartner.

“However, 2015 through 2018 will see a return to ‘normal’ spending growth levels as pricing and purchasing styles reach a new equilibrium. It is entering its third phase of development, moving from a focus on technology and processes in the past to a focus in the future on new business models enabled by digitalisation,” Gordon added.

The global IT spending forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets.

Data centre systems spending is projected to reach $140 billion in 2014, a 0.4 per cent increase from 2013. Constrained spending levels continue to negatively impact the revenue opportunity for data centre systems, particularly with external controller-based (ECB) storage. ECB storage spending suffers from the combined effects of underutilised systems in the installed base, as well as lower-cost alternative architectures and cloud-based storage.

The server market also shows weakness as enterprises migrate away from high-cost platforms toward lower-cost alternatives. The hyper-scale segment, primarily driven by consumer-oriented services, does provide some positive drivers to the market, albeit for very low-cost platforms, which further impacts overall spending levels on data centre systems.

IT services is forecast to total $967 billion in 2014, up 3.8 per cent from 2013. Following a weak vendor performance in 2013 across multiple geographies and segments, modestly improved spending is expected through 2014.

IT outsourcing is growing slower than expected as sharply reduced pricing by the largest vendors is impacting the cloud storage services market. In addition, public cloud services are proving increasingly cannibalistic to more traditional data centre outsourcing services.

Implementation services are also growing slower than expected as risk-averse buyers remain focused on smaller, safer projects and some of the largest sellers remain focused on maintaining margins over growing revenue.

In the enterprise software market, spending is on pace to total $321 billion, a 6.9 per cent increase from 2013. Telecom services spending is projected to grow 0.7 per cent in 2014, with spending reaching $1,635 trillion. The voice average revenue per user (ARPU) will decline by about 10 per cent annually through 2018 because of a decline in consumer use of voice services, particularly among prepaid users.


Demand perspective for Indian IT industry looks marginally positive

June 30th, 2014

According to Nomura, demand perspective for Indian IT industry looks better due to some possible uptick in technology outsourcing and  a more stable pricing outlook as against pricing pressure indications in second quarterOutsourcing38

Accentures has annoucned its third quarter results in the US, which accorging to Nomura points out towards an optimism in both revenues and earnings, which are higher than analysts’ forecasts.

According to Nomura’s research note the key positives for Indian IT players, based on Accenture results, are: (a) broad-based revenue growth ahead of guidance; (b) strongest growth in consulting in nine quarters at 6% year-on-year and consulting booking growth of 10% year-on-year; and 3) strong growth in outsourcing at 10% year-on-year, which is the best in past seven quarters.

The key negatives, as pointed out by Nomura are (a) weak growth in outsourcing bookings up 2% year-on-year; 2) lowering of top end of FY14F revenue growth guidance to 5%; and (c) reduction in top end of diluted EPS guidance.

Nomura believes that the results are marginally positive for India IT from a demand perspective as it indicates: (a) some uptick in technology outsourcing; (b) continued strength in Digital; and 3) a more stable pricing outlook (vs pricing pressure indications in 2Q).

Nomura remains constructive on IT sector demand and remains overweight on the sector. The recommended top Buys are HCL Tech, TCS and Tech Mahindra.


IT earnings up 48 per cent

June 30th, 2014

Viet Nam’s Information Technology (IT) sector earned US$37 billion in revenues in 2013, up 48 per cent year on year, the Ministry of Information and Communications (MIC) has estimated.Outsourcing20

He said most hardware revenues had come from the FDI (Foreign Direct Investment) sector driven by players like Samsung, LG, Intel. Korean tech giant Samsung earned $23.9 billion from exports in 2013.

“FDI technology firms are now dominating local firms in IT production and the story of “made in Viet Nam” products is not as successful as we expected,” said Duong at an industry seminar in Ha Noi on Wednesday.

However, according to Duong, Viet Nam’s IT sector saw strong growth during recent years despite challenges posed by the economic downturn. The sector earned $25.5 billion in 2012, up 86.3 per cent over 2011, after recording a mere $7.6 billion in 2010.

According to the Ministry of Information and Communications, Viet Nam remained among the top 30 leading countries in the world and in the top 10 in the Asia-Pacific for offshore services.

Meanwhile, the International Telecommunications Union (ITU) reported the country’s ICT Development Index in 2013 had risen five places from 86th to 81st, ranking 4th in Southeast Asia and 12th among 27 countries in the Asia Pacific region.

Even last year, the Tholons Inc Consultancy continued to place HCM City and Ha Noi among the top 100 outsourcing destinations in the world.

HCM City was ranked 16th while Ha Noi was ranked 23rd for software outsourcing, according to the New York based advisory firm.


Global companies boost captive tech centres in India

June 30th, 2014

Global captives or offshore delivery centres (ODCs) of multinational companies that act as technology and business process nerve centres for their global operations are back in favour with about 30 new ones coming up in the last two years.Outsourcing37

With outsourcing of IT and technology service projects  to Indian companies such as Infosys or Wipro or their global rivals such as IBM and Accenture, multinationals have in the past avoided setting up their own centres in India, called “captives” in India. This enabled cost-cutting and also circumvented the logistical headaches in setting up their own operations. However, research and development  seen as a critical in-house activity and increased faith in India as a base, captives are growing again.

Global majors including AstraZeneca, Cargill, Lowes, Mercedes Benz have set up centres in India in the recent years while Grant Thornton, Fidelity and Flextronics are expanding furiously, industry officials said.

“The trend of setting up global captives increased in the last two years with focus shifting to high-end jobs from the cost arbitrage-based model of the past,” said KSVishwanathan, vice president, industry initiatives, Nasscom.

“In the past three months three companies have set up their captives in Bangalore. Four more will come up in the coming months,” he said.

Global captives which had grown rapidly between 2005 and 2010 lost steam with outsourcing to independent vendors for cost reasons before picking up pace again.

“MNCs want to leverage the talent pool. More than cost advantage, their main driver is to retain key data and information within their own set-up and get the mundane work done through partners,” said Vinu Nair, managing partner of recruiting firm Antal International Network.

The trend could hit third-party service providers, but is seen as good news for job seekers.  According to Vishwanathan, captives alone may hire 60,000-80,000 employees in the current year.

For instance, Mercedes Benz Research and Development Centre will hire 800 staff to take its strength to over 2,000 by 2015. Auditing firm Grant Thornton has plans to hire over 3,000 and electronics design and contract manufacturing firm Flextronics 2,000 in the next two to three years.

“There is an increasing trend of high-end research and product development work getting done out of India by companies such as Cisco, GE, Facebook and Google,” Kris Lakshmikanth, founder of Head Hunters India. He said a PhD in the US would earn $150,000 a year — while an Indian counterpart gets $50,000.

India accounts for 45% of global captive centres.


Protected by تهنئة
Get Adobe Flash player