Friday, May 15, 2009

Leela Group to invest Rs 100 crore to open IT campus

Hospitality major Leela Group will soon open a Rs.100 crore state-of-the-art IT campus in the Technopark here, a top group official said.

"The building is almost ready and we will open the campus very soon," V.J. Jayakumar, chief of Leela Group's operations in Kerala, told the media.

The 15-storey building will have 500,000 square feet built-up space and an additional 100,000 square feet for car parking.

"Already we have finalised talks with two IT companies, which will take space here. The total investment for the project is above Rs.100 crore," said Jayakumar, who was also the former chief executive of the Technopark.

Leela, which has top-end resorts in several cities in the country, has stepped into the business of IT infrastructure as part of its diversification strategy.

"In Mumbai and Bangalore we have been in the business of IT infrastructure. In Kerala, we have planned to invest Rs.260 crore in the sector and the first and second phases of our project at the Infopark campus in Kochi are complete," said Jayakumar.

"We have finished 90 percent work of the third phase and the next phase work has already started. In all, there will be more than 1 million square feet space in Kochi," he added.

The IT infrastructure division of the Leela Group comes under the Leela Lace Holdings and two of its subsidiaries - Leela Soft and Ocean Soft - manage the Infopark and the Technopark units.

Currently, Kochi and Thiruvananthapuram are the leading IT hubs in Kerala.

Around 50 companies that employ more than 10,000 people operate in and around the Infopark campus in Kochi, while 160 companies with a total employee strength of 25,000 work in the Technopark.

As part of the state government's IT policy, IT parks will be set up in all 14 districts of Kerala.

Works have already begun for the district IT parks at Kollam, Trissur and Alappuzha.

According to the latest figures provided by the state-run Software Technology Parks India (STPI), software exports from Kerala has grown 43.41 percent to Rs.2,300 crore till February-end of last fiscal.

In 2007-08, the total software exports from Kerala stood at Rs.1,750 crore.


Will Aegis Buy Australia's UCMS Group?

Essar Group's back office arm Aegis Ltd has agreed to buy Australian business process outsourcing firm UCMS Group Ltd in a cash deal worth about A$54 million, the firms said in a statement on Friday.

Aegis, through affiliate firm Aegis BPO Services Australia Pty Ltd, will pay UCMS stockholders A$0.98 per share, a 133 percent premium over Thursday's closing price of A$0.42 per share, they added in the joint statement.

"Australia and New Zealand logically become a part of our growth strategy and offer an opportunity for Aegis to expand its footprint in this geography," said Aparup Sengupta, global chief executive officer and managing director of Aegis. The transaction is expected to close in in the third quarter and is subject to approvals from shareholders and the Supreme Court of Victoria and other customary closing conditions, they added.

With this acquisition, Aegis will have operations in India, Philippines, the United States, Costa Rica, Kenya and Australia. Last year, Aegis acquired outsourcing firm PeopleSupport Inc.


Thursday, May 14, 2009

Will FII investment touch $2 billion-mark in 2009?

Investment by Foreign Institutional Investors in Indian equities has touched the two billion dollar-mark (nearly Rs 10,000 crore) so far this year, which includes a record single day net purchase of Rs 4,085 crore.

According to the latest available data on SEBI website, FIIs made net purchases worth $2 two billion or about Rs 9,973 crore so far in 2009, with the stock market seeing major investments in the past two weeks.

"FIIs have been in the buying mode for the last couple of months and after their initial sell-off in early 2009, have turned net buyers of Indian equities year-to-date. Positive trend is likely to continue well into FY'10," Angel Broking Head of Research Hitesh Agrawal said.

Yesterday, FIIs put in as much as Rs 4,085 crore ($838 million) in a single day with an over Rs 2,000 crore investment in shares of realty firms DLF alone.

Since the beginning of the new fiscal year, FIIs have started putting money in domestic stocks, including blue-chips like Housing Development Finance Corporation, private sector lender HDFC Bank and realty major DLF.

In May alone, FIIs made gross purchases of equities worth Rs 27,872 crore and sold shares of Rs 18,255 crore, resulting in a net investment of Rs 9,616 crore ($1.93 billion), as per the data available with SEBI.

Three foreign fund houses, Deutsche Securities Mauritius, Euro Pacific Growth Fund and Copthall Mauritius had purchased a total 9.15 crore shares representing 5.39 per cent in DLF for Rs 2,106.1 crore in open market transactions yesterday.

"We believe the positive trend will continue well into FY 2010. Notably, after having reduced their stake in many blue-chip companies in FY 2009 on account of the global liquidity shortage and economic slowdown concerns, FIIs are now coming back into market," Agrawal added.

The previous week also recorded the biggest weekly infusion by FIIs in the current calendar year. With a bulk investment of Rs 1,491 crore in a single day, FIIs remained net buyers in equities in the remaining days.

FIIs have turned net buyers from last week of April, after pulling out a hefty Rs 52,987 crore from Indian stock markets in 2008, which saw Sensex plunging 51 per cent.

Earlier, two Foreign fund houses Capital Group and Sansar Capital Mauritius bought HDFC shares worth Rs 316 crore, while Deutsche Securities bought Rs 422 crore shares of HDFC Bank.

Agrawal said if no further bad news comes, the world wide the markets would revive by 2010 if FII buying spree continues.

"Pre-empting this, FIIs will look at increasing their stakes in firms that are best placed to ride the recovery and large-cap stocks are preferred ones to begin with," he added.


Will BT cuts 15,000 more jobs in 2009?

Britain's BT Group cut its dividend and said a further 15,000 jobs would go after a 1.58 billion pound ($2.4 billion) write down and restructuring at its Global Services unit drove it to a fourth quarter loss.

The group, which had for years looked for growth at its Global Services unit which supplies the IT needs of multinational companies, also said it would almost double its pension contributions to 525 million pounds ($794.1 million) a year.

BT, which has twice previously in the past year warned about profits at the Global Services unit, said earnings before interest, tax, depreciation and amortisation and contract and financial review charges were 1.35 billion pounds, down 14 percent.

Profit before tax on an adjusted basis was down 40 percent and on a reported basis showed a 1.28 billion pound loss.

To help meet its increased pension obligations, BT cut its final dividend to 1.1 pence to give a full year dividend of 6.5 pence, which was down 59 percent on last year.

The pension contributions will almost double from the previous 280 million pound annual payment to 525 million pounds a year for the next three financial years.

BT has been engaged in a three-yearly pension review to establish the size of its deficit and what it should contribute to the scheme on an annual basis, based on its asset values and liabilities.

The last review in 2006 put BT's deficit at 3.4 billion pounds and set annual contributions on a 10-year recovery plan at 280 million pounds.

BT said on Thursday the contributions would rise to 525 million pounds but did not reveal the new deficit from the three-year review.

A leading pensions expert said on Wednesday that BT's pension deficit now stood at 11 billion pounds

BT said its triennial pension funding valuation was at an advanced state of completion. It did give its pension position at March 31 on an IAS 19 accounting basis as a deficit of 2.9 billion pounds net of tax, compared with a surplus of 2 billion pounds last year.

"Three out of four of BT's lines of business have performed well in spite of fierce competition and the global economic downturn," Chief Executive Ian Livingston said.

"However this achievement has been overshadowed by the unacceptable performance of BT Global Services and the resulting charges we have taken."


Wednesday, May 13, 2009

Does SAP sees signs of recovery from recession?

SAP Co-Chief Executive Leo Apotheker said the next few months may bring "glimmers of hope" for the global economy.

Apotheker also said he believes the business software maker should stay independent, following fresh speculation in European markets that Microsoft Corp could bid for the German company. The talk was sparked by Microsoft's plans to sell a multibillion-dollar debt issue.

"We're probably starting to see a stabilization of the situation," Apotheker said at a news conference in New York. "We'll probably start to see some glimmers of hope in the second half of the year for the global economy." Global markets will likely see a fuller recovery in 2010, he added.

The S&P 500 and Dow industrials pared losses after his comments. Apotheker, who will become the sole CEO of SAP when Henning Kagermann's retires later in May, declined to comment on the Microsoft speculation, but said he believed it is in SAP's interest to remain independent.

"Our customers believe an independent SAP is the best value they can get," he said. Rumors periodically surface that either IBM or Microsoft might acquire SAP, which sells business management applications to large businesses that neither of those technology giants have in their portfolios.

Apotheker criticized rival Oracle Corp's decision to purchase hardware maker Sun Microsystems Inc, saying that businesses do not want to buy from vertically integrated technology companies that sell software alongside the computers that run it.

"I'm sorry to disappoint you," he said in response to a question on how Oracle's $7.4 billion purchase of Sun might reshape the industry. "It won't affect the industry much."

But Apotheker said SAP will do a few acquisitions "as we go along." SAP announced on Monday that it bought privately held Clear Standards, a small maker of software that helps businesses manage greenhouse gas emissions. Apotheker did not discuss financial terms of the acquisition.

Sterling, Virginia-based Clear Standards sells software that helps companies measure and mitigate greenhouse gas emissions, which contribute to global climate change and are increasingly coming under regulatory scrutiny.

Apotheker also said that previously announced job cuts are progressing as planned at SAP. The company is not planning any more job cuts, he added.


Will Capgemini layoff 100 in Chennai?

Consulting and outsourcing firm Capgemini has laid off nearly 100 employees at its Chennai centre.

The pink slips were issued for employees mostly in the middle management positions. This comes on the back of reports that said Capgemini sacked 600 employees in Hyderabad and Pune. The company has nearly 20,000 people working in India.

An employee said the layoff across centers was because of the overall economic slowdown, which was impacting the company’s project flow and clients.

“While some clients have ramped down on the size of contracts, other projects, like the Lehman Brothers account closed after the company’s collapse. Apart from the middle management, some employees on probation were also asked to leave,” said the employee at one of the company’s locations, who did not wish to be named.

When contacted, Capgemini India’s chief people officer Cyprian D’Souza said through an email, “India is central to our global delivery model and we are in the process of mapping our existing skills with the business in hand and the business outlook. The economic condition is tough and no company is immune to its effects.”

D’Souza added that the industry was seeing an overhaul within all the affected verticals. “The process though tough, has to be undertaken to align our business with global economic realities, optimise operational efficiency, ensure financial health and enable future growth.”

For the first quarter of 2009, Capgemini group posted consolidated revenues of Euro 2,205 million, up 0.9 per cent compared with the year-ago period.


Cars that sense danger to pedestrians to roll out soon

BMW is refining a car-to-car communication system that offers more pedestrian protection by "sensing" situations and persons that cannot normally be seen by motorists, according to the car maker.

In a typical situation a child could suddenly jump onto the road from between two parked vehicles. In such a case the moving vehicle would communicate with an electronic transponder carried by the child or cyclist for protection.

The project is part of the AMULETT research project aimed at preventing accidents with sensoring and tracking technology. On board car systems are networked with those of other vehicles or transponders carried by persons. These can be installed in school bags, mobile phones or in a walking stick.

Should the system determine an impending collision or danger situation, the driver is warned with a signal on the head-up display. If he or she does not respond the system automatically triggers a braking procedure.

According to German government accident statistics 48 percent of child accident victims between the age of six and 14 ran onto the road without observing the traffic. Other research has shown that in 40 percent of fatal pedestrian accidents, the driver could not react in time.


Tuesday, May 12, 2009

Nortel opens new center in Bangalore

Nortel has opened a new Global Network Operations Center (GNOC) in Bangalore, India, to help remotely manage and support communications networks for enterprise and carrier customers across Asia, Europe and the Americas.

The Bangalore GNOC provides round-the-clock network surveillance and performance monitoring for voice and data networks. This enables Nortel enterprise and carrier customers to focus their resources on their core business, instead of dedicating costly IT resources to maintain and manage their communications networks. This, in turn, helps these companies lower operational costs, maximize network efficiency and performance, and keep abreast with new, evolving technologies.

The GNOC monitors customer network to identify network problems before they can impact business functions or productivity, and seeks to resolve issues either remotely from the GNOC or by dispatching technicians to the customer's site. This is Nortel's fifth Network Operations Center.

Nortel's other NOCs are located in North America, Europe, China and India (Gurgaon). The latter supports the managed services requirements of Bharti Airtel and other local customers.


Has software piracy in India gone up to $2.7 billion?

Global software makers lost an estimated $2.76 billion to illegal software trade in India, a study.

According to a BSA-IDC Global Software Piracy Study, even as piracy in the country has seen a one point drop to 68 per cent in 2008, it has resulted in loss of billions of dollars for software majors like Adobe, Autodesk and Microsoft globally.

"With the various initiatives taken by the government and the firms, piracy has gone down to 68 per cent and in the coming year also, we expect this to continue as people become more informed about licenced software," BSA Vice-President and Regional Director (Asia-Pacific) Jeffrey J Hardee told reporters afetr releasing the study.

The dollar-rupee fluctuation resulted in the increase in value terms.

Hardee also said the rapidly growing user base for assembled PC units and easy availability of pirated software on the Internet, is a major concern.

However "with software firms offering services to the SMBs and more portable PCs being shipped, piracy should come down," he added.

The study noted a rise in piracy levels globally. While it has gone up to 41 per cent globally from 38 per cent last year, piracy also remains high in the Central and Eastern Europe (66 per cent), Latin America (65 per cent) and Asia-Pacific (61 per cent).

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IBM acquires data discovery software Exeros Technologies

Software giant IBM has acquired Piyush Gupta co-founded Exeros Technologies, a provider of data discovery software, intending to capture the Business Analytics Optimization Consulting market.

The acquisition is seen as the return of IBM's strategy of capturing the small scale software companies. However, the internal team of Exeros including the top management and the Research and Development wing will be retained. Exeros was founded in 2002.

Technology and Business Research (TBR) considers this acquisition as a big strategic move by the company in the field of the Business Analytics, especially as the market has seen a recent acquisition of SUN Microsystems by Oracle, in which IBM had failed.

TBR states the valuation of the Exeros Technologies to be around $50 Million, while the firm has not officially disclosed the amount of the sale of the assets. The deal is said to be a significant one as Exeros technology is helpful in making the IBM's Information on Demand more enhanced.

The deal might give IBM an added advantage to take on the rivals like Oracle, which has already succeeded in acquiring Sun, which will increase the competition in the market.

"All organizations today are faced with the daunting challenge of turning massive amounts of information into insights to guide their businesses, but many are held back by the complexity of corporate data sources," said Ambuj Goyal, general manager, IBM Information Management. "The combination of IBM and Exeros will enable companies to more intelligently manage their data across all formats and computing platforms, creating a smarter enterprise," Goyal added.

With this acquisition, IBM will look to develop smarter business systems. It will also help to adapt to the changing market and to deliver much efficiently. By this acquisition, the customers will be able to find and access the desired information stored in multiple databases. The companies' clients will be preserved and will enjoy broader set of capabilities without replacing the systems. Exeros was named in si100 listing of siliconindia magazine in 2007.


US firm sets up welding consumables facility in Chennai

The US-based welding consumables product company Lincoln Electric inaugurated its $20-million plant near Chennai Monday.

The 100,000 square feet plant in Mahindra World City, a special economic zone (SEZ), has an initial production capacity of 15,000 tonnes per annum.

"The Chennai plant is an important investment for Lincoln in the expanding market for welding products in India," Lincoln chairman and chief executive John M. Stropki told reporters while inaugurating the facility.

The new plant will manufacture solid welding wire used in industry segments like such as heavy equipment, metal buildings, pipeline and windmills.


Monday, May 11, 2009

Do Indian IT firms vie for $11.4-billion domestic market?

With the IT clients in the U.S., Europe and Japan tightening their purse strings, Indian IT companies are scrambling to raise their share of the Indian software and IT services market, which industry body Nasscom values at around Rs 57,200 crore ($11.4 billion), reported Mint.

Mumbai-based TCS and Bangalore-based Infosys, India's largest and second largest IT service exporters, respectively, have set themselves the target of earning $1 billion, or around Rs.5,000 crore, in revenue from the domestic market in the next three to four years. Wipro wants to raise its India focus, as does mid-sized firm MindTree. In March, Employees' State Insurance Corporation, a government of India agency that provides health insurance to 10 million workers, had awarded a Rs.1,182 crore information-technology (IT) project to Wipro, which outbid other biggies like Infosys and Wipro to clinch this deal.

Adding allure to the domestic market is the plans by the sectors like government, energy and utilities, telecom, banking and finance to step up their IT spending. Customers in the US and Europe have traditionally made up as much as 80% of revenue earned by Indian exporters of software and related services.

A late 2008 report by research firm Gartner says that the Indian IT software and services segment, excluding business process outsourcing, is expected to grow at an annual pace of almost 20 percent to touch $13.2 billion by 2012.

TCS earns around $500 million (Rs2,500 crore), or nearly 8 percent of its total revenue, from Indian clients. "We have a base of key clients and solutions portfolio. We have made investments and have people, business and clients. We will accelerate all of this," a TCS spokesperson said.

However, the worry at TCS is that "India, like other emerging markets, is volatile and most business is project-based and not annuity based and hence there is a certain element of uncertainty," the spokesperson added.

Meanwhile, Infosys earns less than 2 percent of its revenue (or less than Rs400 crore) from the domestic market. "The market is very large, and has matured over a period of time," said Binod HR, head of the India business unit of Infosys. He said a "big challenge" is that Indian customers are very price-sensitive.

Wipro is one of the largest system integrators in India and, according to Springboard Research, has the second largest share of the domestic market after IBM.

P.K. Gopalkrishnan, Senior Vice-President and India business head IT services of Bangalore-based MindTree said the company earns up to 5 percent of its revenue from India and aims to double it by 2014.

Increasing the domestic market share would, however, not be easy. It entails competing with global technology firms such as IBM which, according to a late 2008 report by research firm IDC, commands a 10 percent share of the Indian market. IBM is the market leader and earns revenue of around Rs 5,700 crore from the Indian market.


Check out ten most promising technology companies

siliconindia, the premier magazine for business and technology which is published from Fremont, California has announced in its May edition, 'Top 10 most promising technology companies' founded or managed by Indians in the U.S.

The 10 promising technology companies include: Connectiva Systems, Jivox, Niksun, Parascale, Stoke, Truviso, Wavesat, WiChorus, Zyrion and Zmanda.

A distinguished panel comprising accomplished CEO's, VC's and analysts including siliconindia editorial board decided on the top 10 companies. Evaluations were made on both quantitative and qualitative criteria including technology product the company was building or the differentiated service offering, management pedigree, innovation, global strategy, customers and customer retention and venture funding.

"In the backdrop of current economic conditions, we're seeing a lot of innovative new companies taking on the established players with disruptive technologies and innovative business plans," said Harvi Sachar, founder and Editor-in-Chief of siliconindia. "The siliconindia Top 10 Most Promising Technology companies are pushing and breaking the boundaries of the technology business and we are excited to report on their success stories. These companies have a lot of momentum and will rise above the rest."


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