SILICON VILLAGE

Friday, November 7, 2008

Mexico emerges great destination for Indian BPO firms

The Latino country is eyeing for $8 billion revenue from information technology services by 2030 For most people, Mexico doesn't equate with a home for high-tech companies. However, with a likely shift in the world economic superpowers in the future, the 'Latino' country is eyeing for $8 billion revenue frominformation technology services by 2030.

The global markets for IT services and business process outsourcing (BPO) is posing strong growth despite challenging conditions worldwide. According to Gartner, the revenues of $748 billion in 2007, is set to grow 9.5 percent in 2008, while the Everest Group estimates the present BPO market to be values at $28 billion is expected to grow up to $280 billion by 2012.

In this context, Mexico is set to fully take advantage of the growth prospects for these markets. Talking to CIOL at the BangaloreIT.biz 2008, Ricardo Alvarez, executive director of International Promotion, Mexico says, "Mexico is has already signed free trade agreements with 44 countries and is the second largest NAFTA country. India has always been the key strategic partner in many industrial sectors and would like it to expand in the IT front as well."

Alvarez says, "Goldman Sachs report indicates India and Mexico are likely to emerge big as world's economic superpowers and so need to work together in this regard. We can do so much together with India in IT despite the present financial crisis."

As per the report, China will top the list as the 'Economic Superpowers' by 2030, followed by USA, India, Brazil, Mexico and Russia.

With a privileged geographic location right next to the world's largest IT market, Mexico offers abundant qualified human resources and strong support. "These are among the many reasons why the government estimates that these sectors will export $8 billion by 2030," adds Alvarez.

Now with US economy tottering and President-elect Barack Ombama posturing against outsourcing, Mexico sees itself as alternative destination Indian IT Inc can explore for furthering their business.

With more than 1,200 software, BPO and IT services firms, Mexico generated revenues of $4 billion in 2007 growing at 36 percent annually (including IT oursourcing) of which $3.1 billion were exports, he adds.

Home to ten Indian IT firms, Mexico is rolling the red carpet for more Indian IT firms to set up shop there. Sasken, Mphasis, Sutherland, Hexware, Infosys, TCS, Wipro, Aricent, iGate and Mindtree have logged their presence in Mexico from 2005. "Our purpose in participating at IT.biz is to diversify our markets and establish better IT ties with India, he says.

Mexico's need of IT service professionals is expected to double from 41,000 in 2007 to 89,000 in 2013 and BPO professionals triple from 50,000 in 2007 to 155,000 in 2013, he said, adding it has 23 regional IT clusters in 20 states. For promoting IT in the country, Mexico First initiative is being rolled out with $100 million spend over the next five years, Alvarez adds.

Mexico, he said, was pushing Mexico City, State of Mexico, Jalisco, Nuevo Leon, Puebla, Sonora, Sinaloa and Veracruz, as fast-growing IT industry destinations for nearshore outsouring with advantages like time-zone alignment, lower costs, fast and simple visa regime, ease of software and hardware procurement, and legal and IP protection.

Recognizing the importance and economic potential of the software, IT services and BPO industries, the country has set up Prosoft — federal flasghip programme for the IT sector to provide financial assistance to IT investment and development. TechBA — business incubator and Mexico IT to provide information and advice to foreign firms keen on doing business in Mexico.

Aviation giants still eye $300 bn India potential

Despite daily losses of Rs.100-150 million ($2-3 million) being incurred by some Indian carriers due to the general economic downturn, global aerospace giants continue to make a strong pitch for a share in the country's aviation pie, officially estimated at $300 billion by 2020, experts said.

"Much of the world is flat or declining. Only India is growing," said Daniel J. Magoon, director of Indian business development, transportation and security solutions with the US aerospace giant Lockheed Martin.

"We want to become the supplier of choice for air traffic control and security systems," Magoon told the media, adding his job was to change the company's business mix in India from major supplier of wares to the defence sector to gaining a foothold in the civil aviation space.

India's flight penetration is at a mere 0.2 per capita, compared to 2.2 in the US and 1.2 in China, and with only 40 busy airports serving a population of more than a billion, companies like Lockheed sees a huge growth potential here.

And it was none other than Civil Aviation Minister Praful Patel, who said in Hyderabad recently during a major civil aviation show that India offered a $300 billion market by 2020 for new aircraft, infrastructure and air traffic control, navigation and security systems.

"The entire world now thinks India is the place to grow and we are very much focussed on the Indian market as our business here can grow to as much as $1 billion in the next few years," said Fred A. Treyz III of another US giant Raytheon.

"China may be growing too but most American aviation companies who also have a presence in the defence sector are not allowed to do business with Chinese companies, so we have to focus on India," said Treyz who is the company's director of business development and strategic planning.

As aviation infrastructure suppliers slug it out for the Indian market, aircraft makers, too, see India as the place to grow. Bell Helicopter, for example, took 52 years to sell its first 100 choppers in India, but now expects to sell the next 100 in less than five years.

"India is our fastest growing market," says Greg Hubbard, director of communications for Bell Helicopter, which claims a 52 percent market share in the chopper market, followed closely by Franco-German-Spanish Eurocopter with 40 percent.

'We believe that the helicopter market in the country has the potential of doubling in the next few years,' said Norbert Ducrot, Eurocopter's senior vice president for sales and marketing in Asia.

India is also a hot market for corporate and business jets. Outside the US, India is the second-largest market after Brazil for Hawker Beechcraft, said Sean McGeough, the company's vice president of international sales.

Despite being a little slow to take off, Montreal-based Bombardier, another leading manufacturer of business jets, now has three sales representatives in India and will also set up a regional customer support office for the sub-continent next year.

"The potential for Bombardier as a regional carrier in this market is vast and it is our hope and expectation to build on that in the months and years to come," Bombardier's senior adviser John Arnone told recently.

But what about the current troubles of Indian carriers? The two major commercial aircraft manufacturing giants Airbus and Boeing think it is a temporary aberration and will soon correct itself.

"There is now too much overcapacity but the potential for growth in India is huge," says Kiran Rao, European aircraft giant Airbus's executive vice-president of sales and marketing.

"If the Indian economy is growing at 7-8 percent, then air traffic growth will be 14-15 percent. So we are very much focussed on India," he said. This perception is also shared by Dinesh A. Keskar, Boeing's senior vice president of sales of commercial airplanes.

"India is the growth story of the world and it is going to be the future," he said.

Thursday, November 6, 2008

Recession likely to continue for six months, says Bill Gates

Microsoft founder, Bill Gates, expects US economy to reel under global financial slow down for more than six months. However, Gates hopes, the rapid economic and technological advancements made by emerging economies like China and India in last decade will see to it that slow down impact is temporary. "There is no doubt that there is going to be economic crisis in the US. There are imbalances in the US and economy will have weakness," said Gates.

"I can not predict whether the financial crisis will be two years or three years, but it will be more than six month and then the economy will get back on track" forecasted Gates. Addressing the packed gathering here at Indian Institute of Technology (IIT), Gates however sounded confident in his assessment that global economy has changed enough to ward of crisis resulting from meltdown in the housing market and heavy consumer debt.

"If you look at the world and US economy since 1990, the results have been really phenomenal. The fact that India has liberalized and grown it economy.. The fact that China is now a global player. The world economy benefits from this scale, being able to trade products and being able to collaborate with brilliant minds", said Gates.

"It won’t be a long term impact. I take five or ten year’s view. Company like Microsoft are not cutting back on it research. The benefits of these researches will be delivered on time,” added Gates.

"Even though we are going to have a little bit of challenge in the US, we are not going to erase the policy maps the we have made, nor are we going to stop from going back on the map” added Gates.

"New medicines, new materials, are coming as planned in the next decade,", he added.
Gates added that US economic downturn need not be extended to other countries. “I think markets have overreacted", he added.

Talking about their research projects here, Gates said that in their research laboratory here - half of whose staff are from the IITs - developed a medium through which the farming community can benefit.

"They would have wanted to give the farmers a personal computer, but knowing the limitations, they developed a video DVD in which they filmed farmers using the best farming practices and talking in local languages. These practices were later reviewed by experts and presented in an appealing manner," Gates noted.

"Of course, a more interactive medium would have been better and we are working towards it. But for now, the farming community is happy to sit around a TV set in a village and pick up practices that benefit them," Gates said.

Wednesday, November 5, 2008

3G auction in India on January 09

A one-time fee would be levied on GSM operators holding 2G frequencies beyond 6.2 MHz The Government of India decided on Tuesday to hold the auction of the spectrum for third generation (3G) mobile phone services in January 2009, as scheduled.

The decision was taken at a meeting Prime Minister Manmohan Singh held with Finance Minister P. Chidambaram and Communications and Information Technology Minister A. Raja in New Delhi.

In the closed-door meeting, it was also decided to increase spectrum user charges for all existing telecom operators, both using CDMA and GSM technologies. A one-time fee would be levied on GSM operators who hold second generation (2G) radio frequencies beyond the 6.2 MHz mark.
Vodafone had recently written to the government seeking a delay in auctions to early 2009, whereas Bharti Airtel wanted the 3G auctions to be held in time.

Earlier the government had told that the auction would be held by December 31, 2008. The revenue from the AGR (Adjusted Gross Revenue) route would go up. The meeting decided to hike the AGR by one per cent for those operators who hold up to 8 MHz frequency. For those with more than 8 MHz, the AGR has been hiked by two per cent.

The meeting also discussed the issue of offloading of stocks by Swan and Unitech.

Bangalore techies cheer Obama

As Obama creates history by becoming the first Black to adorn the post of US President, these fans in the Indian Silicon Valley are more than a happy lot.

As Democrat Barack Obama has created history in the US Presidential elections by becoming the first Black to take control of the White House, this techie group from Bangalore would be more than happy, as their campaign has bore result.

These Bangalore techies, who had formed Barack Obama Bangalore Fan Club, were probably more enthusiastic than the American youth and they made all attempts possible on their part to fetch vote for the youth icon in his run-up for the most powerful post in the US.

Apart from calling up, SMSing and emailing friends and relatives in the US to vote for the Democrat, the club members also collected more than US$4000 from their circles, which they contributed to the election fund of Obama.

They had even organized rallies in the Indian Silicon Valley, carrying placards supporting Obama and explaining why the US as well as India need Obama in the White House.

The fan club members say they got the money for the election fund from several quarters voluntarily. And they believe that the young Democrat could bring a positive change. But it was Obama only who had played the anti-outsourcing card to woo the American youth in a recent electoral speech.

Will the fan club be able to make him retract from the announcement?

After all the statement had caused the Indian IT sector to press the panic button, as majority of outsourcing works from the US are shipped to India.

At this moment of history, some perennial questions arise.

Will the new President be able to help revive the nose-diving American economy? Will India, especially the IT sector, have to face the heat of the anti-outsourcing card played by Obama to win over the jobless youth of America?

Monday, November 3, 2008

Ten Emerging Technologies of 2008

Technology Review presents its annual list of the 10 most exciting technologies.

Each year, Technology Review publishes its list of 10 emerging technologies that its editors believe will be particularly important over the next few years. This is work ready to emerge from the lab, in a broad range of areas: energy, computer hardware and software, biological imaging, and more.

Two of the technologies--cellulolytic enzymes and atomic magnetometers--are efforts by leading scientists to solve critical problems, while five--surprise modeling, connectomics, probabilistic CMOS, reality mining, and offline Web applications--represent whole new ways of looking at problems. And three--graphene transistors, nanoradio, and wireless power--are amazing feats of engineering that have created something entirely new.

See All 10 Emerging Technologies 2008

Chandrayaan-1 inches closer to moon

The fourth orbit-raising manoeuvre of Chandrayaan-1 was carried out which took the lunar spacecraft closer to the moon, the Indian Space Research Organisation said.

During this operation at 0738 hours, the spacecraft's 440 Newton liquid engine was fired for about three minutes, the Bangalore-headquartered space agency said in a statement.

"With this, Chandrayaan-1 entered into a more elliptical orbit whose apogee (farthest point to earth) lies at 2,67,000 km while the perigee (nearest point to earth) lies at 465 km. Thus, Chandrayaan-1 spacecraft's present orbit extends more than half the way to the moon," ISRO said.

In this orbit, the spacecraft takes about six days to go round the earth once.

The health of the spacecraft is being continuously monitored from the Spacecraft Control Centre at ISRO Telemetry, Tracking and Command Network (ISTRAC) here with support from Indian Deep Space Network antennas at Byalalu near Bangalore.

ISRO said all systems on board the spacecraft are performing normally.

One more orbit raising manoeuvre is scheduled to send the spacecraft to the vicinity of he moon at a distance of about 3,84,000 km from the earth, it said.

Enterprise technology spending in 2008

Reports indicate that SOA, virtualization are still hot ...

When it comes to technology spending, a quick look at the economy is often enough to get a rough idea of whether budgets are expanding, contracting or staying flat -- and this year is no exception.

"Looking back over the last 60 years, what's happening with economic growth feeds directly into what companies are prepared to spend on technology," said Andrew Bartels, a research analyst at Forrester Research Inc. in Cambridge, Mass. "We see some positive signs that the economy seems to be ...

'Indian R&D centers need to pull up'

Current economic downturn is an ideal opportunity for R&D subsidiaries in India to showcase their value proposition says a new study .

Zinnov Management Consulting, a leading management consulting firm in India, today asserted that the current economic downturn is an ideal opportunity for R&D subsidiaries in India to showcase their value proposition of "Innovation at lower cost" and help their parent companies tide over these tough times.

According to Zinnov, Indian subsidiaries should proactively adopt various measures such as an effective cost cutting strategy without compromising on innovation, infuse realism in their employees and correct some of those desperate measures that centers had taken in the past few years to control attrition and scale faster.

Create a myth buster presentation on India centers (to dispel myths like cost escalation, lower productivity, lack of innovation), sell aggressively to their parent companies, attract high quality talent from top engineering institutes that once preferred Financial services, attract senior talent from overseas, increase awareness among engineers on the economic downturn and its overall implications are also some of the things that they would have to do. Another key initiative should be increasing interaction with key global stakeholders in the parent company to keep India center in the spotlight.

Pari Natarajan, CEO, Zinnov Management Consulting, said, "This is the time for leadership and not just Management. India centers should project a stronger India Center image by articulating value to their Global stakeholders and get high value work transitioned to India. The current crisis can be diffused if India centers continue to deliver innovation at lower cost. Our recommendations are based on our internal analysis and discussions with the various industry stalwarts over a period of time."

Zinnov also deliberated that as Global companies today are looking at Eastern Europe and China as alternative off shoring locations, there might not be an upsurge (similar to the 2002-2005 period post the dotcom bust) in the number of projects transitioned to India. Companies doing more than 20 percent R&D work in India may also now look at expanding in other locations and a probable cut by the Global companies in their R&D spend may hurt the aspect of innovation. However, these factors should not act as dampeners and India centers can continue to fulfill the promising growth story by driving variety of initiatives across the value chain.

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