Posts Tagged ‘India’

Wipro scouts opportunities in Canada to offset US blues

August 20th, 2014

WiproBSE 1.22 % is betting on two of its largest verticals serving the financial services and oil and gas sectors as India’s third largest software exporter scouts for opportunities in Canada to offset lackluster performance in the US. Outsourcing49

According to industry lobby Nasscom, Canada offers a $2.5 billion market for home-grown IT firms as more Canadian companies, especially in financial services and oil and gas, outsource work. Wipro’s renewed thrust in Canada is because it expects to outrival completion in Canada, boosting North American revenue at a time when the company is barely able to keep up with competition in the US.

“Canada is a hugely important geography for us because we have our goal to regain our glory in the North American market,” Wipro Chief Executive TK Kurien told ET last month. “We can try like hell (but) can only catch up in the US. But Canada is a virgin market. And so that is the strategy for us.”

Kurien’s plans to increase his company’s footprint in Canada got a boost after Wipro won its biggest outsourcing contract, worth $1.2 billion from Albertabased utilities firm ATCO, last month. Bangalore-based Wipro, which posted $6.6 billion revenue in the fiscal year ended in March, has tasked senior executive Brian Allatt to reach out to more utilities and oil and gas companies in Canada. Allatt, previously vice president of strategic accounts, will now be managing director of the division dealing with Canada’s energy, natural resources and utilities businesses and will report to Arun Krishnamurthi, head of the global utilities vertical.

“Both Canada and US are important geographies because of the way energy dynamics are changing,” Anand Padmanabhan, CEO of energy, natural resources and utilities segment at Wipro, told ET in an interview.

“Canada is resource-rich and through the ATCO deal we will like to show what we can offer to the rest of the geography.” Wipro leads the pack in the oil and gas segment, generating a little over $1 billion or about 16 per cent of total revenue. However, in the banking, financial services and insurance segment (BFSI), the company lags rivals including Tata Consultancy ServicesBSE -0.09 % and Infosys. It is working on improving the contribution of financial services to total revenue from the current 27 per cent.

“The Canadian BFSI vertical is another key growth area for us,” said Shaji Farooq, head of the BFSI division at Wipro. Some experts, however, say Wipro could face challenges from that country’s stringent immigration regulations as well as tough competition from bigger rivals. Although companies don’t provide revenue breakups for US and Canada, analysts estimate the local leaders, TCS and InfosysBSE 0.08 %, have a large share of the Canadian IT market than Wipro.


“India has become a preferred outsourcing destination for software testing”

August 20th, 2014

Software testing as a function until recently had not developed the level of maturity seen in the developed markets of US, EU, etc. The focus was mainly on functional testing with very limited attention given to other types-automation, performance and other Outsourcing48non-functional testing. This is all changing and we now see a lot more interest in testing and greater extent of automation due to increasing adoption of IT, growing importance of quality and awareness & focus on different types of testing. Dataquest spoke to Rajesh Sundararajan, Practice Head, Testing Services, Marlabs Software. Excerpts

Breif us about cloud based software testing.
As we all know, ‘cloud computing’ refers to the utility based model of consuming shared computing resources as a service over the Internet. Let’s see what it means in the context of software testing.
There are 2 primary categories of computing resources that can be accessed over the cloud:
Application Test Environments: The test environment infrastructure can be provisioned on the cloud with the appropriate configuration for the required timelines rather than have a dedicated infrastructure in-house. The application under test is then hosted on this cloud infrastructure and tested. This is an example of IaaS (infrastructure as a service) or PaaS (platform as a service).
The Testing Tool Rig: which includes the Testing tool (Automation, Performance etc.) software and/or infrastructure required to host the testing tools – can be provisioned and accessed from the cloud. This can be SaaS (Software as a service), PaaS or IaaS depending on the Test setup. This testing tool can test applications hosted on either cloud or dedicated in-house test environments.

What are the benefits of testing and running enterprise software in the cloud?
The benefits if planned well are significant.
Cost is a primary factor:
I.Large upfront costs of capex like servers & other hardware, testing tools are replaced by opex which are spread out over a period of time.
II.With cloud, there is value for money as we pay only for the resources that we consume. The testing life-cycle is often intermittent and is a good candidate for utilizing the cloud. At the end of testing, the cloud based resources can be stopped and restarted when testing resumes to avoid accumulating higher costs.
III.Some activities like performance testing require large production-like configurations for short cycles. Creating this environment on the cloud is an attractive proposition for IT organizations which otherwise often avoid performance testing due to prohibitive investments.

Dedicated physical infrastructure requires a lot of time to procure & setup. That is where the cloud provides an option of – quick provision of the required environment, a set configuration which can be recorded and applied at short notice. It is also very easy to scale up the environment and provision additional resources whenever required.
There are other interesting possibilities. The global distribution of the cloud enables us to run ‘distributed’ performance tests and generate load from multiple regions across the globe to simulate live usage patterns

What are the risks or downsides?
The cloud comes with its fair share of risks and users need to comprehensively evaluate the relative benefits it offers.
First of all, Organizations face a risk in giving control of their assets to an external entity
a)The data and resources are not in your physical control. The responsibility for the data and its safety is with someone else.
b)Business continuity and disaster recovery are completely in the hands of the cloud provider.
c)There is a dependency on the cloud provider for SLAs and other support activities.

But there is another side to it- many organizations especially those lacking in technical expertise and dealing with less critical data may actually be more comfortable with leaving security and infrastructure challenges to the expertise of Amazon EC2, Microsoft azure, Google, etc.
Compared to the live production, the test environment is a less risky option when testing the waters with a movement to the cloud. So, organizations are more open to moving test environments to the cloud

A very well know issue is that of security. The cloud brings in additional dimensions which impact security:
a)Multi-tenancy: the cloud is a shared resource and there are risks, known/unknown of data leakage to other users sharing CPU, Memory, and Servers etc.
b)Virtualization-While the vulnerabilities to the underlying physical resources remain, the additional vulnerabilities of the virtualized environment pose an added layer of risk.
c)Data stored on the internet especially in large volumes on the cloud are prone to cyber-attacks, having said that most cloud providers do have stringent security measures in place.

How does a company pick a strong test tool?
There are tools for a range of testing activities. For each type of testing, there are many tool vendors who have come out with products. Many of the vendors provide tools for end-to-end test activities. Choosing a tool or tool platform is very much context driven depending on:
Application technology: Web applications are supported by most tool vendors. Applications based on niche technologies have limited tool options for testing.
Cost of the tools- This is relative and depends on the size of business, application criticality, company policy, etc.
Availability of skill set , ease of use, learning curve of the tool.
Extent and quality of support provided by the tool vendor.
Alignment with existing tools and technologies. An organization using UFT from HP may prefer to extend their partnership and select load runner performance testing tool from HP itself.

Two strong trends in recent years are:
The growing maturity and adoption of open source tools for a wide range of testing activities. Though these tools require skilled resources to use, their cost advantages make them a very good option for companies to choose.

Many of the tools are now being delivered in SaaS model over the cloud. This is increasingly becoming a criterion for companies to choose a testing tool for to gain the benefits of cloud.

What is the role of APM (Application Performance Monitoring) in cloud testing?
APM tools find usage in- test and live environments, in-house as well as cloud deployments. Major vendors like – Compuware and CA to name a couple have come out with products to address these use cases.

During performance testing, the APM tools provide a complete and in-depth view of system and application performance including:
Resource utilization at the level of server, application, user, transaction to help in better analysis, performance troubleshooting and capacity planning.
Analyze performance down to the method level, break-down performance bottlenecks and pin-point latencies at each layer of the architecture from the UI to the back-end database and service components.

This advanced analysis is especially helpful in the cloud context because of the dynamic, complex and multiple components involved in cloud architecture. This analysis is also very helpful in defining auto-scaling strategies for cloud hosting.

How do you see India as a market for software testing?
There are 2 parts to this. One is the software testing services market. The Indian IT services industry is expected to see about 14% growth to reach a market size of about $16 bn by 2016, according to a report brought out by BCG (Boston Consulting Group) & CII. This is mainly due to increasing adoption of IT by companies, more outsourcing- reflected by many of the recent big ticket IT deals e.g. indiaPost, Bharti Airtel and growth of new technologies like mobile, cloud, big data. So, the software testing market can be expected to grow on similar lines and the growth will be more in testing related to these new technologies.

The other component is the market for software testing products (tools). Apart from the above reasons, the fact that India has become a preferred outsourcing destination for software testing along with a large pool of technical resources has led to sustained demand for software testing tools. The visible presence of the large Product companies- HP, IBM as well as many of the niche players- Neotys, PerfectoMobile etc. at various forums is a testimony to the importance of India as a market for testing products.

Do you think adoption of this is still less in India as compared to other countries?
IT & software adoption has been lagging in India compared to some of the developed markets. For this reason, until a few years back the India market was not the focus for most of the software service vendors and the Indian market still forms a small component of India’s more than $100 bn software industry. Software testing as a function until recently had not developed the level of maturity seen in the developed markets of US, EU, etc. The focus was mainly on functional testing with very limited attention given to other types- automation, performance and other non-functional testing. This is all changing and we now see a lot more interest in testing and greater extent of automation due to increasing adoption of IT, growing importance of quality and awareness & focus on different types of testing.


Oakton’s India outsourcing accounts for quarter of production

August 19th, 2014

With challenging conditions throughout the 2014 financial year, Oakton has announced today its full-year net profit has fallen 9.1 percent to AU$8.3 million, but revenue for the company increased by 1.4 percent in the period.Outsourcing44

In its potentially final set of full-year results as an independent company, following a AU$171 million cash offer from Dimension Data Australia for the company launched last week, the company said that customer focus on cost and value was leading to demand for cloud and offshore services.

To that end, Oakton’s Hyderabad office in India contributed 26 percent of the company’s billable hours, up 6 percentage points on last year, and is forecast to grow about 30 percent for the 2015 financial year. Of the 1203 employees in the company, 309 currently reside in India.

“The long term investment in our offshore facility in Hyderabad is again making a significant contribution to our performance and our strategic positioning,” said Oakton managing director and CEO, Neil Wilson in a statement.

“Our ability to meet reduced price expectations from our customers has enabled us to maintain and improve market share in a number of sectors.”

Looking ahead, the company said it plans to increase market share and meet customer demand for cloud, mobility, information management, and core system enhancements solutions, that are increasingly being offered “as-a-service”.

However the biggest issue to impact the company over the next financial year will be the AU$171 million offer from Dimension Data Australia to purchase all Oakton shares. The AU$1.90 a share price offered by Dimension Data represented a 30 percent premium on Oakton’s closing share price at the time, at August 11, and a 43 percent premium on Oakton’s 3 month volume weighted average share price at the time of the offer.

Oakton’s board unanimously recommended the offer to the company’s shareholders, and said in a statement that the board will vote all Oakton shares held by them in favour of the proposal.

It is expected that a shareholder meeting to approve the deal be will held in November. If shareholder approval is obtained, the offer will still need to be approved the Victorian Supreme Court.


India wins back some voice-based BPO services from Philippines

August 15th, 2014

India is winning back some voice-based BPO services from the Philippines, as the small southeast Asian country grapples with high attrition and the advent of multi-channel customer service offerings.

Voice call centres, which handle customer service, telephonic sales and collections, were the start of the BPO boom in India in the nineties. But the country lost a large chunk of that business to the Philippines over the past seven or eight years due to the closer cultural affinity and a natural American accent found there.

Last year, the Associated Chambers of Commerce and Industry in India estimated that the country had lost over 50 per cent of the international voice centre business to the Philippines. The BPO market in the United States is expected to grow at 4.3 per cent CAGR, reaching $97.3 billion in 2017, according to research firm IDC.

But that may be changing as the Philippines grapples with rising attrition levels and wage costs and a large concentration of clients being served out of a very small region, leading to business risks.

“India has always been a large delivery centre with size and the ability to scale and we are seeing the pendulum starting to swing back to India,” TJ Singh, vice-president at consultancy firm Gartner told ET.

Business process outsourcing companies also point out that Indian employees are better at jobs that require some aspect of sales, as clients look to convert their call centres from purely a cost centre to a unit that could also drive some revenue for them.

“We have a large e-commerce company that asked us to move some jobs to India because there are better skills here to both sell and upsell services. We moved 600 jobs to India from the Philippines for this client,” Sandip Sen, CEO of Essar Group’s BPO arm Aegis, told ET.

Telstra and BestBuy are some companies that have brought some work back to India because of better selling skills. While not all the work will move back, industry players expect the country to have a better chance winning some of the business.

“It will not all move back, because companies have invested in centres in the Philippines. But now India as an option is back on the table and clients are looking at it, which was not the case two years ago. Some incremental work is definitely coming here,” a top executive at the BPO unit of a multinational company said.

He declined to be identified because the global company is in a silent period.

Also helping the shift back to India is the fact that “purevoice” services are falling out of fashion, and the newer multichannel offerings — which combine email and chat – have a technology aspect that is better suited to delivery out of India.

“The Philippines had an edge in pure voice customer service. But if you have technology-enabled services for customer support, or for services like technology support, for that we see the centre of gravity moving back here,” said KS Viswanathan,vice-president at industry body Nasscom.

Convergys, a US BPO company with centres in India, is one of the companies adding agents to its multi-channel customer service offerings in India, its India head Hanumant Talwar had told ET.


Online retail growing fast in India

August 15th, 2014

Finding a way into India’s vast but vexing market has long frustrated foreign retailers. Now, overseas investors are pouring billions of dollars into ecommerce ventures that are circumventing the barriers holding back retail powers such as Wal-Mart and Ikea.

Some investors see India as the world’s next big ecommerce opportunity, with the upcoming mammoth public stock offering of Chinese online giant Alibaba hinting at the potential.

Online shopping is still in its infancy in India at $2.3 billion of an overall $421 billion retail market in 2013, according to research firm Crisil. But it is growing fast, and the potential of reaching a mostly untapped market of 1.2 billion people has sparked a funding-and-expansion arms race.

Flipkart, a Bangalore-based company founded in 2007 by two former Amazon employees, last month announced it had raised $1 billion in mostly foreign capital after building its registered users to 22 million.

A day later, Amazon raised the stakes with founder Jeff Bezos saying the company would pour $2 billion into developing its India business., whose investors include eBay Inc., has raised at least $234 million in the past year, and recently local media have reported that Rajan Tata of India’s Tata Group conglomerate is considering a personal investment in the company.

The flood of overseas capital comes even though foreign investment in online retailing is not permitted in India, which would seem an even more stringent barrier than the local product sourcing requirements that caused Wal-Mart and Ikea to pull back on plans to build megastores. However, ecommerce businesses that are partly or wholly foreign-owned have found a way to work around the rules to offer books, clothes and electronics on their sites.

Neither Flipkart nor Amazon technically engage in online retailing. Instead, to get around the foreign investment ban, both companies serve as Internet-based hosts for thousands of third-party sellers, taking commissions in exchange for marketing and, often, arranging shipping of the products.

Even Amazon’s Kindle ereader is not sold directly by the company. On the site, the latest Kindle reader is sold by Infinity Retail Ltd., a subsidiary of Tata Group, which purchases the device from Amazon. Customers get the device but pay more for the extra layer of reselling: the Kindle that sells for US$119 ($130 in Canadian dollars) on the U.S. online store goes for 9,999 rupees ($179) on the Indian website.

India’s Finance Minister Arun Jaitley mentioned liberalizing ecommerce in his July budget speech, but so far the government has not taken any steps to change the foreign investment restrictions.

It may be a while before the big investment outlays translate into profits. Most of the billions raised by ecommerce businesses will be plowed back into building up the companies, from acquiring warehouses to developing shipping networks and also offering deep discounts to squeeze smaller players out of the market, said Ajay Srinivasan, director of Crisil Research, which is, in majority, funded by Standard & Poor’s.

“Financial muscle ensures you are able to withstand the initial few years when you are not going to be making money and you’ll be burning cash,” Srinivasan said. “It also allows you to offer better deals to customers to build market share.”

Online sales are growing in India at more than 50 per cent annually and are on track to reach $8.3 billion by 2016, Crisil estimates. KPMG estimates that ecommerce could contribute 4 per cent of India’s GDP by 2020, compared to a projected 10 per cent for the country’s IT and call-centre outsourcing industry.


Online marketing to create 1.5 lakh jobs in India

August 14th, 2014

About 1.5 lakh jobs are expected to be created in the digital marketing space within a couple of years as more companies tap the Internet and the social media platform to bolster business, say HR experts. India is emerging as a digital outsourcing hub for diverse services including online advertising, social media and website design, they said.

“With both businesses and consumers increasingly shifting their focus to the digital medium, there will be 1.5 lakh jobs available by 2016,” Manipal Global Education Services Executive President V Sivaramakrishnan said.

Going by estimates, around 25,000 new job opportunities are likely this year itself in digital marketing space. The rising demand is also spurred by increased use of the Internet and mobile phones besides fast growing e-commerce businesses. However, the availability of talent is less than demand.

“Almost every single brand has put in place a digital marketing strategy and are struggling to hire people to execute the same,” Trivone Digital Services Founder & CEO L Subramanyam said. Reflecting similar sentiments, CareerBuilder India MD Premlesh Machama said there is a dearth of skilled and experienced professionals for digital marketing.

HR firm Randstad India CEO Moorthy Uppaluri said there has been a huge proliferation of technology that has changed the way companies engage with their clients and employees. “Hence, the focus of companies to enter new digital channels of engagement is driving up the demand for digital (marketing) professionals,” Uppaluri said.

According to MeraJob India CEO Pallav Sinha said, India is also becoming a potential outsourcing hub for digital marketing services, with many entities taking up projects from clients in the United States, Canada and the United Kingdom.

Unison International MD Udit Mittal said the requirement for more skilled and efficient digital marketing professionals is rising at an exponential level. Among the business areas, e-commerce is turning to be a major recruiter of digital marketing professionals.

Lighthouse Partners Managing Partner Rajiv Burman said the digital space offers opportunities to professionals working in marketing departments of corporate as well as fresh graduates. Echoing similar views, Advaiya Solutions’ Founder and CEO Manish Godha said growth of digital marketing segment is very promising and would create many job opportunities.

“Other areas for digital marketing growth include social marketing, content creation and management, search marketing, email marketing, analytics and video production,” he added. As per Randstad India estimates, the starting salary for digital marketing professionals is in the range of Rs 4.5-5.5 lakh.


Infosys shares rise on $1.8-billion buyback call

August 6th, 2014

Shares of Infosys jumped as much as three percent Wednesday after three top ex-executives urged the Indian outsourcing giant to buy back shares worth $1.8 billion, saying the company is too cash-rich.

The proposal represents the first major challenge for Infosys chief executive Vishal Sikka, who took charge on August 1. He replaced co-founder Narayana Murthy who was recalled from retirement last year to help Infosys regain market share.

An Infosys spokeswoman was non-committal, noting the proposal had come so far from “only three retail investors”.

But “should there be any development that will impact our shareholders, we will immediately inform the regulatory bodies”, she told AFP in an emailed response.

In a letter to media on Tuesday, former officers V Balakrishnan, T V Mohandas Pai and D N Prahlad sought a Rs. 112-billion stock buyback for all shareholders at 3,850-rupees-a-share.

The price would represent a nearly 10-percent premium over the stock’s 52-week trading high.

The two former chief financial officers and an ex-senior vice-president said they believed big institutional shareholders “are supportive” of the proposal, which comes as Infosys shifts from being run by a company founder to an outsider.

Analysts called the proposal a “pressure tactic” on the new chief executive to deliver results for investors impatient at longstanding underperformance by the Nasdaq-listed company — a pioneer of India’s flagship outsourcing industry.

After rising by three percent earlier in the day, Infosys’ shares were up 1.5% at 3,557.95 rupees in afternoon trade.

Regardless of funds needed by Infosys involving future innovation or acquisitions, “we strongly believe the company is clearly over capitalised”, the ex-executives said, according to local media reports.

The Bangalore-based company, India’s second-largest outsourcer by sales, was sitting on Rs. 259.5 billion in cash at the end of the last financial year in March 2014.

Cash-flush firms often buy back their shares in a move that can drive up the share price by reducing the amount of stock on offer and boost sagging earnings-per-share.

But critics say buybacks can flatter the bottom-line performance without delivering profit growth based on investment and development.

Infosys’ shares have underperformed rivals such as TCS by over 70% and HCL Technologies nearly 80% over the past five years, analysts say.

“This is a pressure tactic to leave your conservative approach and do something — an acquisition, expansion. Investors have become impatient,” Daljeet Kohli, research head at India Nivesh Securities, told AFP.

Sikka has said the company must revitalise its “low-cost, mundane” software services while creating higher-earning opportunities in fields such as data analytics.


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