Posts Tagged ‘India’

‘India’s IT spending to grow 9.4% to $73bn in 2015’

October 16th, 2014

IT spending in India is projected to rise to $73.3bn in 2015 – a 9.4% increase from the $67.1bn forecast for 2014, said US information technology research and advisory firm Gartner.Outsourcing25

“India is forecast to be the third largest IT market within the Asia/Pacific region by the end of 2016 and will further progress to become the second-largest market for IT by the end of 2018,” said Peter Sondergaard, senior vice president at Gartner and global head of research.

“Much of the growth from being the number four market in Asia/Pacific to number three is likely to happen in 2015,” he added.

“IT spending in India is on pace to increase 2.9% this year, primarily on the back of strong growth within the IT services and software, which will grow 10.5% and 9.6%,” said Partha Iyengar, distinguished analyst and Gartner India head of research.

In 2014, mobile devices will grow 13.5%, and will dislodge mobile voice services to be the largest segment within the overall IT market in India, Gartner said.Mobile data services will be the fastest growing segment in India, growing 18.2% in 2014. Telecommunication services will account for 41.4% of overall IT spending, and it will decline 0.7% in 2014, it added.

“The impact that the digital business economy is having on the IT industry is dramatic. Since 2013, 650mn new physical objects have come online. 3D printers became a billion dollar market; 10% of automobiles became connected; and the number of chief data officers and chief digital officer positions have doubled. In 2015, all of these things will double again,” Sondergaard said.

Gartner defined digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.

“This year enterprises will spend over $40bn designing, implementing and operating the Internet of Things,” Sondergaard said.

“Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half-a-million IP addressable objects in 2020.”


Facebook’s Mark Zuckerberg would like more Indian users on the Internet

October 10th, 2014

With riffs on the Mars mission and the famed Indian IT outsourcing story, and marrying the objectives of, the project his company and a clutch of others launched in August last year, with India’s ambitious Digital India mission, Facebook chief executive officer Mark Zuckerberg hinted at ways his company could take the Internet to the “more than billion people who are still not connected”.

Part of that plan may involve telcos.

On 31 July, for instance, Bharti Airtel Ltd, India’s largest telco, and Facebook jointly launched an app in Zambia to provide free access to Facebook and other online services to people who might otherwise have no access to the world wide web. The app is available only to Bharti Airtel subscribers in Zambia.

Zuckerberg hinted at a similar type of service for India with local telecom operators. “You need a 911 type of service for the Internet, (which can provide) some free access for basic services like health and education,” Zuckerberg said, but added that “one will need a model where the operators too make money”., founded by Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung, hopes to take the Internet to the 66% of the world’s population that is still off the grid.

Digital India is Prime Minister Narendra Modi’s ambitious programme that clubs e-governance, Internet access for all and electronics manufacturing.

“I do not believe that the Internet is more important than food, toilets or clean water (in a country like India). People need (all) these things in a modern society. But I really think we’re (Facebook) much better suited to help out in providing Internet-based services rather than providing clean water,” said Zuckerberg during the launch of on Thursday in India.

On Friday, Zuckerberg will meet Modi “to explore ways in which his company can participate” in the Digital India mission.

With close to 110 million of its 1.32 billion users in India, Zuckerberg has more than one reason to be in the country. Fifty million Indian users are on messaging service WhatsApp, a user base Zuckerberg has no intention of monetizing “in the near-term”, except for the 99 cents that is charged from each user after one year of service.

India, he pointed out, has 243 million Internet users—just a fifth of its population.

The barriers to Internet adoption in the country include cultural barriers, low quality of coverage, uneven distribution of wealth and “many who still don’t see any good reason to access the Internet”, Zuckerberg said.

Zuckerberg, who is also meeting up with Facebook’s partners in India to discuss some of these issues, has some experience in widening Internet access in developing countries.

Last, but not the least, he is here to figure out how Facebook can spur developers to provide more local language content apps, since “almost 80% of the world’s Internet content is in just about 10 major languages”.

“More than 65% of Facebook users access the Internet in a language other than English,” Zuckerberg said. Delivering the keynote address at the summit earlier in the day, Zuckerberg announced a $1 million fund to incentivize developers in India.

Among other prizes, an amount of $250,000 will be presented to the app, website or service that judges determine best meets the needs of one of the four designated population categories: women, students, farmers and migrant workers—four awards in total. Each of the award winners will also be eligible to receive a package of tools and services worth up to $60,000 from Facebook’s FbStart programme.

“India is where all the growth is taking place,” said Jonathan Sreekumaran, business director, north, of Webchutney Studio Pvt. Ltd, a media and marketing firm which is part of Dentsu Network.

“Silicon Valley is showing lots of interest in India, especially with a change in the government. Also, India, unlike the developed markets such as the States (the US) or Canada, is not at a saturation point,” he said.

Digital India is proving to be a magnet for global technology companies, a point driven home by the visits of three global executives to the country in September alone.

On 15 September, Sundar Pichai, senior vice-president at Google Inc. who handles the company’s Chrome, apps and Android business, was in India to promote the company’s low-cost Android One smartphones. Jeff Bezos, president, chief executive and chairman of the board of the world’s largest online retailer Inc., came visiting on 28 September. This was followed by a visit by Satya Nadella, chief executive of Microsoft Corp., on 30 September.

Mahesh Murthy, co-founder, Seedfund, and founder of Pinstorm, a marketing and advertising firm, pointed out that there are only around 300 million people in India who can speak or understand English.

“Facebook is already at 110 million users in India, so it is coming close to the ceiling. Growth will slow down. The only way numbers can grow again is if Facebook opens up to people who are not English-savvy in India, not just with language versions of Facebook,” said Murthy. “The problem is that due to our government’s short-sightedness, nobody knows how to use any Indian language keyboard. So even if you have a Facebook in Hindi, no one will know how to type on it.”

According to Vishal Tripathi, principal research analyst at Gartner Inc., “In terms of increasing numbers in India, it is fine, but the bigger question is how to make money out of this growing market.”

Tripathi noted that Facebook has advertisements and missed-call options (where the company calls back users who give it a missed call). “Now they also have a smart plugin.” he added.

Facebook has also received flak on a range of issues including misuse of online privacy.

According to Murthy, “As long as people want to connect on Facebook for free, they have to contend with the fact that data about them is being packaged and sold to advertisers”.

Sreekumaran said Facebook is reportedly trying to win over those who are concerned about privacy. “As far as rights are concerned, at the end of the day, you’re still using someone’s platform to do your own thing. There are rules of engagement using the platform. Period.”

When asked why there was no uniform privacy policy across countries, the stringent EU laws that rein in Facebook being a case in point, Zuckerberg said, “We are certainly open to feedback about the products we roll out…we take into account cultural and local needs and we certainly empathize (with) and understand nuances (in different countries).”


Over 60 Indian firms to take part in Gitex 2014

October 3rd, 2014

Electronics and Computer Software Export Promotion Council (ESC) is ensuring Indian participation in a big way at Gitex 2014 scheduled in Dubai from 12-16 October 2014. Outsourcing47

“ESC has been facilitating Indian participation on a regular basis at Gitex to take advantage of the booming IT market in the Gulf and leveraging that association for getting businesses for Indian IT companies from a multitude of large global corporations, which are executing projects in the region,” says Kamal Vachani, Regional Director, Middle East, ESC.

“Gitex is continuing to emerge the largest and the most impressive ICT event of its kind in the Middle East. Naturally, India has a great stake in the booming Middle East, Africa, Asia (WANA Region) and European markets for which Dubai is the gateway. Thus the event provides the participating Indian ICT companies opportunities for scouting the expanding Middle East market,”  says Vinod Sharma, Chairman, ESC.

ESC has been participating at the Gitex consistently for several years and the participating Indian companies under ESC’s banner have reported high degree of satisfaction. The participating Indian companies have reported to have bagged significant businesses, forged joint ventures, marketing tie ups, etc. with the buyers visiting the exhibition.

“This year in 2014 at Gitex Dubai, 40 Indian ICT companies are exhibiting at the India Pavilion organised by ESC.  Out of these 40 companies 17 companies are repeating their participation in the event.  Another 20 Indian ICT companies will be also participating in various halls.

India pavilion will highlight innovative ICT products & services including Cyber Security Solutions, Mobile Tablets, Power Chargers (Power Banks) and IT Accessories, Software Products on E-Commerce, Time and Attendance, Visitor Management, ELearning Systems, Survey Builder, Quality Management solutions, CMS, CRM, Event Management, Technical Skills in Microsoft .Net, Open Source PHP / RoR, VC++, Qt and Web Design, User Interface (UI) Design, Interactive CBTs, 2D/3D Animations ,HR & Finance Solutions, Projet Management System & Team & Time, Payroll., Biometrics, RFID, Touch-Screen Kiosks, SMS & eMail services, Online Payment Gateways,  ERP, Data analysis, Biometric Vertical, Tailor-Made Vertical, Examination Vertical,  Learning Management System (LMS), Vehicle Trackers and Personal Trackers, Software Development Services, Outsourced Product, Development, Enterprise Mobility, Cloud Computing, Enterprise Server development, Oracle E-Business Suite, Enterprise Application, Implementation & Support, Cloud, Offshore/ Global Outsourcing & Software Development Services, iOS App Development, Mobile App Development, PHP Web Development, Ecommerce Development, CRM Development and Integration, Telecommunication Products, Energy Sector, Banking, Financial Inclusions, Digital Signage , Enterprise Asset Management / CMMS, Web Portal Development, BPO etc.

Export Scenario

A high growth in exports of electronics hardware from India to Middle East countries during 2013-14 is observed.  Middle East Countries have become the top destination for India’s electronics hardware export during the year 2013-14.  It is estimated that electronics goods export to Middle East Countries during 2013-14 is valued at $1738 million up from $1630 million estimated in the year 2012-13 registering a growth of 6.66 per cent, said D.K. Sareen, Executive Director, ESC.

Amongst the ME countries, UAE is the top destination for India’s electronics export followed by Saudi Arabia and Turkey.

Export of software and related services to Middle East has also registered an excellent growth of 11.74 per cent.  Export of software and services increased from $1852 million estimated in 2012-13 to  $2069 million estimated in 2013-14.

India’s total export of electronics hardware during 2013-14 is estimated to be $7664 million and that of computer software and services is estimated to be US$ 84009 million.


India to become Capgemini’s default offshoring location soon

September 29th, 2014

Cap Gemini SA, the Paris-based consulting and software services firm, is trying to save costs by farming out more work to its centres in India and hiring freshers from colleges. Outsourcing30

Capgemini, which has software development centres in more than 10locations outside France, including smaller ones in Poland, Morocco and Vietnam, wants to make India the default offshore location, said Aruna Jayanthi, chief executive of Capgemini India Pvt. Ltd, in an interview last week.

Most of Capgemini’s key clients, who operate out of France, Germany, New Zealand and the Nordic regions, have begun offshoring more work to low-cost countries as technology budgets remain little changed and companies seek to cut costs, adding pressure on the French company to accelerate its plans to boost its operation in India.

Capgemini’s bigger rivals International Business Machines Corp. (IBM) and Accenture Plc. already have a massive presence in India. Capgemini has “a very low-margin business compared to its global peers like IBM and Accenture” which could be the reason for increasing its India offshoring, coupled with the fact that most of Capgemini’s clients are also going in for more offshoring today, said Sudin Apte, founder and research director with tech research firm, Offshore Insights.

In the last six-seven years, Capgemini’s offshore presence in India has grown from 10-12% to 45% today, and it has a very strong consulting practice, which is what will help it compete with peers such as Cognizant Technology Solutions Corp. and Infosys Ltd for the India business.

Capgemini, however, cannot be compared with IBM or Accenture, according to Apte. “Firstly, Accenture, which is considerably smaller than IBM, is still three times larger in terms of revenue compared to Capgemini. Secondly, both IBM and Accenture have 72-75% of their total resources in global delivery markets, while for Capgemini this number is about 54-55%.”

The 139,000 strong Capgemini had more than 50,000 employees in India. In comparison, IBM is estimated to employ about 150,000 people in India and Accenture, 100,000. Accenture entered India in 1987, IBM re-entered the country in 1992 while Capgemini started operations here in 2000.

By 2016, Capgemini, however, expects the number to account for half of its global workforce. Moreover, the company that has traditionally hired experienced professionals will also add freshers, said Jayanthi.

The company posted an 18% revenue growth in India on a total revenue of €5.1 billion in the June quarter, said Jayanthi.

About 85% of the work done out of India is divided between infrastructure management, application development and management, and consulting services while the remaining 15% comes from business process outsourcing (BPO).

“Our engineering services delivery that is being driven out of India will offer ‘digital engineering’ solutions to clients globally, with two-thirds of the business opportunity expected to come from the US in the next 12-18 months,” said Girish Wardadkar, global leader-engineering services, Capgemini.

Investing in the engineering space also allows Capgemini to offer a suite of services in addition to its traditional IT services, infrastructure managed services, BPO and consulting.

Capgemini, she added, with its six innovation labs in India will help drive 50% of the digital transformation required by clients out of India in areas like the Internet of Things, cloud, virtualization of the traditional application, development and management services.

Sanchit Vir Gogia, chief analyst and chief executive of Greyhound Research, acknowledged that Capgemini is building its capability in the engineering vertical but added that the company may face “tough competition from established Indian software services companies such as HCL Technologies Ltd, Infosys and Tech Mahindra Ltd, that already have a strong engineering practice”. “The company may also need to reduce its pricing by 25-30% to compete with Indian peers going forward,” said Gogia.


Huawei enters IT services with telecom projects

September 19th, 2014

Telecom networking giant Huawei has entered IT services, a shift from its hardware-focussed strategy which will eat into the marketshare of Indian software exporters, especially in telecom-related projects.Outsourcing10

The world’s largest privately held technology company is using its India R&D centre to take up projects involving managing of telecom infrastructure and their networks, thereby treading on the bread-and-butter businesses of Indian IT exporters. When contacted, Wilson Wang confirmed the development and told BusinessLine that engineers from India have started doing projects onsite and offshore for its clients such as China Mobile, China Telecom and others.

“Our 2,700 Indian engineers are paving the way in services, working on areas such as Ring Back Tones, cloud computing and agile software development, which helps telcos to provide different solutions to their customers” he said.

Huawei started off making telecom equipments such as routers and switches for telecom operators globally and within a span of a decade, the company gained significant marketshare from competitors like Cisco and ZTE. This development also underscores the ambition of Huawei, as it branches out into services, especially with global client base, noted Sanchit Vir Gogia, Analyst at Greyhound research.

The company, which started off selling networking equipment to Chinese telcos, now counts Mobily, MegaFon, Etisalat as their customers. “We already have an existing installed base of products that telecom companies use and services is our next frontier,” explained Wang. Also, services an area where Chinese companies have been laggards when compared to their Indian counterparts who have exported $75 billion worth of software in the 2014 fiscal year.

For a decade-and-a-half, Indian IT exporters have been trying to make a mark in the Chinese market, with the likes of TCS, Infosys, Wipro and others have subsidiaries in cities like Shanghai and Shenzen. However, they have not been able to make much inroads and almost all of these companies contribute a fraction of its overall turnover, according to company data. In a bid to spruce up revenues from China, TCS last year, Tata Information Technology was merged into TCS China.

Accroding to analyst data, global telecom outsourcing market is estimated to hit $76 billion by 2016.


Infosys Seeks More European Acquisitions, Executives Say Company’s Recovery Plan On Track

September 16th, 2014

Infosys Ltd., India’s second-largest IT services provider, will likely look at acquisitions in Europe with a greater sense of urgency in the second year of its three-year recovery plan, top executives told investors on Monday.outsourcing51

The Bangalore-based company, under new leader Vishal Sikka, is also looking to innovate and industrialize its bread-and-butter outsourcing business — automating large chunks of data center management, for instance — to differentiate and free itself for higher-margin services, Chief Operating Officer Pravin Rao said.

“Irrespective of the macroeconomic environment,” there is growing momentum of companies in continental Europe to be “more open” to awarding IT contracts to Indian service providers, Rao said at a conference organized by brokerage CLSA, in Hong Kong.

Britain is already the second-largest market for India’s top IT providers, but language and cultural barriers in countries like France and Germany, which have a strong preference for dealing with local sales people and consultants, and more restrictive labor laws, have typically prevented Indian IT companies from making serious headway in these markets.

Many European companies “have never experimented with pure-play players like us” Rao said, referring to India-based companies specializing in IT-offshoring, adding that acquisitions have begun to change that, especially in the last two years. Therefore, purchasing local companies to quickly build presence will be a “critical element” of Infosys’s strategy in Europe, he said.

Chief Financial Officer Rajiv Bansal added: “Continental Europe is one area where to build up your local talent and local pool, if we have to do only through organic means, it would take much longer time, so we would definitely look at companies with front-end there.”

Bansal is also chairman of Infosys Lodestone, a subsidiary created out of Lodestone Holding AG, the Zurich, Switzerland-headquartered consultancy that Infosys purchased in 2012, adding some 750 specialists in business management software.

Bansal said Infosys now had much greater control over the cost of doing business compared to about three years back, allowing the company to take faster decisions on investments such as acquisitions. Infosys has no debt and close to $5 billion in cash reserves.

“Not doing anything is not a choice anymore,” Bansal said.

A strategy to chase a greater proportion of revenues from proprietary software distracted Infosys from IT outsourcing — maintaining computer systems and software applications, an increasingly commoditized area — costing it market share and predictability of business.

CEO Sikka, former head of technology at business software giant SAP SE, was appointed to lead Infosys by founder Narayana Murthy, who articulated a three-year plan in June 2013. The plan comprises reducing costs, winning more large outsourcing contracts, and fulfilling those orders more effectively.

Sikka has started with attempts to get Infosys’s more than 160,000 staff more involved in the turnaround — attrition, at 19 percent, is the worst among the top three Indian IT firms — and plans to use at least $100 million to engage with technology startups, whose intellectual property could help accelerate Infosys’s growth.


Asian Countries Top List of Outsourcing Destinations

September 16th, 2014

India, China and Malaysia are the top countries chosen by multinational firms to outsource operations overseas, according to a survey by consulting firm A.T. Kearney.outsourcing54

Asian nations topped the A.T. Kearney Global Services Location Index, which measures the offshoring potential in 51 countries based on financial attractiveness, people skills and availability and business environment.

Indonesia, Thailand and the Philippines were ranked fifth, sixth and seventh in the list; Thailand and the Philippines improving their rank from last year.

The A.T. Kearney study is aimed at helping companies make location decisions, especially back-office functions, such as information technology and business-process outsourcing, it said.

Mexico came in at No. 4, Brazil was No. 8 and Egypt came in at No. 10. Bangladesh debuted on the list at No. 26.

India “is unrivaled in both scale and people skills” and leading information technology services firms are expanding their traditional offerings to include research and development, product development, and other niche services, A.T. Kearney said.

As China’s economy moves more towards services, advanced analytics and information technology businesses are rising. However, rising wages are limiting cost competitiveness, especially on lower-end functions, A.T. Kearney said.


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