IT spending likely to fall 5.2% worldwide, says Gartner

The worldwide IT spending is on pace to decline 5.2 percent this year. However, the IT industry will return to growth in 2010, with IT spending forecast to total $3.3 trillion, a 3.3 percent increase from 2009, according to research firm Gartner. In Asia Pacific, IT spending is expected to grow by five percent to reach $515.6 billion in 2010.

Peter Sondergaard, Senior Vice President at Gartner and Global Head of Research, said that this represented a fast V-shaped recovery for IT spending in the region. Emerging regions will resume strong growth, he said. By 2012, the accelerated IT spending and culturally different approach to IT in Asia will directly influence product features, service structures and the overall IT industry.

However, growth varies considerably by country, vertical market and IT sector. Sondergaard said that while software would post the strongest growth in Asia Pacific, telecommunications still represented the largest area of IT investment.

In Australia, the five-year outlook for enterprise IT spending is a compound annual growth rate of 1.3 percent, with total IT spending by Australian businesses to reach Australian dollar 56.4 billion by 2013. The vertical sectors with the highest IT spending growth would be communications (3.2 percent), healthcare (2.6 percent) and utilities (2.3 percent). While IT spending will increase next year, Gartner cautioned IT leaders not to be overly optimistic.

"While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012," said Sondergaard. 2010 is about balancing the focus on cost, risk, and growth. For more than 50 percent of Chief Information Officers the IT budget will be zero percent or less in growth terms. It will only slowly improve in 2011, he added.

Sondergaard said that the three most-searched terms by Gartner clients on gartner.com provide some clues as to the priorities of IT leaders around the world. Cost remained the most-searched term during 2009, although it peaked in May, followed by cloud computing. "Next year will be the year when cloud computing moves from the discovery phase to small pilots, as part of organizations' desire to move from owned to shared IT," he said.

The third most-searched terms on gartner.com were business applications such as enterprise resource planning (ERP) and customer relationship management (CRM). "We believe that 2010 will see increased focus on optimization of business processes linked to software applications, what we call application overhaul. That is what will drive growth in the software segment," Sondergaard said.

Agencies

Accenture on a hiring spree in India; To hire 8,000 by 2010

Global technology and consultancy firm, Accenture has said that it is going to add around 8,000 people in India by the end of next year taking its total employee base in the country to 50,000.

"We are 42,000 right now and we imagine we will be about 50,000 by the end of 2010," said Accenture Chairman and Chief Executive Officer, William D Green on the sidelines of the India Economic Summit. Indicating a recovery from the global downturn, Green said the company will continue to focus in India, specially in the areas of analytics, reports a media.

Accenture's focus in India is going to be the analytics space, which will help its clients in converting information into insights for better yields. Green added, "We believe that analytics is going to be an important trend that our customers are going to demand from us. We think India is going to be a great place for us. We have some core centres of excellence in the analytics space in the country."

Accenture, which has annual revenue of $21.58 billion for fiscal 2009, will strengthen its focus on clients in pharmaceutical, telecommunications and energy in the country.

Agencies

By 2010 Indian cos to see 20-30% pick up in hiring

Riding high on a six to seven per cent expected economic growth and with the global economy gradually bouncing back, India Inc is likely to hire 20-30 per cent more talent in CY 10, a top industry official said.

"In 2010 (January-December), I envisage atleast 20-30 per cent increase in recruitments by companies," recruitment consultancy firm, Fun & Joy At Work's Chief Executive Officer, R L Bhatia, told the media here.

This would be over and above the 30 per cent dip in hiring that was witnessed last year, Bhatia said.

Fun & Joy At Work is a nine-year-old recruitment firm with offices across Mumbai and Singapore. The company claims providing talent consultancy to a host of Indian companies across sectors.

BPOs, bio-technology, media, telecom and finance are some of the sectors likely to witnessing higher hirings, Bhatia said.

The Indian economy would clock around six to seven per cent growth and substantial investments into India is in the offing, Bhatia said, adding, "this will trigger an increased hiring."

Bhatia said that despite the the slowdown, companies did hire, though less in number.

"Maybe they hired less, but they hired nevertheless," he said.

His own firm had some 30 companies which have plans to hire around 20,000-30,000 personnel, he said.

"Industry is exercising caution now. As a result, companies are investing only when and where it is necessary. They are sensibly investing in people or human resources," he said.

Agencies

80,000 engineers to be absorbed in IT sector by 2010

Software industry body, Nasscom expects at least 70,000-80,000 engineering graduates who passed out in June 2009 and were offered jobs in their 5th and 6th semesters by TCS, Infosys and Accenture, among others, to get absorbed by March 2010. Not too long ago, there were apprehensions that the appointments of these tech grads could get deferred till 2011 in the aftermath of the global slowdown. However, the perception appears to have changed.

Speaking to the media, Nasscom Vice-President Sangeeta Gupta said, "There's some amount of pick-up in IT spending and clients have become active in the decision-making process. This augurs well for the IT industry and is likely to result in hiring by IT companies. Companies like TCS, Infosys and Accenture, among others, are expected to start honouring the offers they made. As a result, at least 70k-80k engineering graduates, who were issued offer letters, are expected to get absorbed by March 2010."

For instance, the country's biggest software firm Tata Consultancy Services (TCS) had made some 24,000 offers in 2008-09, according to its Q2 analyst call. The company had indicated that it would honour these offers this fiscal. In Q3, TCS is expected to absorb about 8,000-odd, and the balance, in the following quarter. Till Q2, the company had absorbed some 1,800 people.

Similarly, Infosys, in its Q2 earnings call, indicated that it would add 20,000 people instead of 18,000 indicated earlier. The additional 2,000 would be partly in BPO while the rest would make up laterals at Infosys Technologies.

Incidentally, Nasscom has urged member companies to recruit those who've completed their eighth semester to ensure that hiring is closer to the need of companies. For this fiscal, Nasscom has projected a mere 4-7 percent export growth. It is likely, that with IT sector showing signs of recovery, Nasscom will review the export target. "We can review the export target by end- December," she added.

McKinsey in its report titled 'Perspectives in the IT industry by 2020', has noted that with the current pace of reforms and expected constraints in talent and infrastructure supply, the exports component of the Indian IT industry is slated to reach $175 billion in revenues by 2020. The domestic component will contribute $50 billion in revenues by 2020, which is larger than the total export revenues for India now.

Agencies

iGate expands Whitefield campus; To hire 1,500 by 2010

iGate on Thursday inaugurated the fourth phase of its global delivery facility at its campus in Whitefield, Bangalore. The new facility, set up at a cost of Rs 65 crore, provides 115,000 sq ft of additional workspace and can seat 1,050 people.

Phaneesh Murthy, CEO of the outsourcing solutions company, said iGate plans to hire about 1,500 people in 2010. The $220-million company currently has around 3,500 employees in Bangalore.

Murthy said he expected IT budgets to be up 2-4% in 2010.

“Discretionary project spends are starting to happen. The pricing environment is largely stable,” he said.

iGate’s campus has in the past sought to differentiate itself through the adoption of a host of environment friendly measures. The latest phase makes further advances on this front. It has LED lighting throughout and the lighting is solar powered. There’s an ozone-friendly air conditioning system, organic waste converter and a wastewater recycling system.

“We also made special efforts to procure green IT equipment,” the company said. The company has taken on a carbon footprint estimation study to determine the green house gas (GHG) inventory across all its global delivery facilities in India, Australia and Mexico.

Agencies

Dual-screen laptops to hit market by 2009-10

The world's first laptop with twin monitors is slated to hit the stores by the end of the year.

The dual-screen laptop, entitled Spacebook, was masterminded by Alaska-based technology firm gScreen.

The pioneering technology, that will let users to multi-task while on the move, will have two 15.4 in screens, reports the Telegraph.

The PC is estimated to cost enthusiasts around 3,000 dollars but not without concerns regarding the weight of the Spacebook and the pressure on the batteries to meet the energy demands of running two screens.

Gordon Stewart, the founder of gScreen, told US technology website Gizmodo, that the gadget could be expected to be up for grabs on Amazon by December this year, provided final modifications had been dealt with.

He said: "We designed this knowing that many may not need the extra screen at all times."

Spacebook is thought to be the first of its kind with twin screens of equal size.

Agencies

Will Accenture layoff 336 executives in 2009?

Accenture, a business consulting and outsourcing company is likely to lay off around 336 senior-level managers as part of a broad-based restructuring effort. William Green, CEO, Accenture said, "We are taking this step to position Accenture better for both short-term and long-term economic improvement growth and profitability."

The company has about 177,000 employees globally, of which 4,800 are senior-executive employees. The lay off is likely to be completed by the end of November 2009. The company said that the reductions would cost about $247 million in the fourth quarter, which ends on August 31. Out of $247 million, about $128 million of the charge is for severance and related costs of workforce reductions at the senior executive level and $119 million linked to reduction of excess office space. The company said that the space reductions would be completed by the end of August, while the job cuts are expected to be completed in the first quarter of fiscal 2010.

According to a projection by Goldman Sachs Group, global technology spending will decline by eight percent this year. Accenture said that it continued to expect net revenues for the fourth quarter in the range of $5 billion to $5.2 billion with operating margins between 13.4 percent and 13.7 percent. But the company also added that the restructuring charges will likely reduce its earnings per share for both the fourth quarter and the full year by 24 cents.

The company had generated net revenue of $23.39 billion for the fiscal ended August 31, 2008. In the last one year, the stock of Accenture has climbed by 11 percent on the New York Stock Exchange (NYSE).

Agencies

$1 salary for Oracle CEO Larry Ellison

Oracle CEO Larry Ellison will receive a base salary of $1 for fiscal 2010, according to a regulatory document filed Friday.

That's a decrease of $999,999 from last year. But Ellison won't exactly be starving. He is the world's fourth wealthiest person, according to Forbes.

And according to Oracle's filing with the Securities and Exchange Commission, Ellison's base pay of $1 million in fiscal 2009 only accounted for 1.2 percent of his total compensation anyway. Ninety-seven percent was in the form of stock.

Still, Ellison's new $1 base pay puts him on the salary pedestal with the likes of Apple CEO Steve Jobs and Google co-founders Sergey Brin and Larry Page.

"The compensation committee recognizes that Mr. Ellison has a significant equity interest in Oracle, but believes he should still receive annual compensation because Mr. Ellison plays an active and vital role in our operations, strategy and growth. Nevertheless, during fiscal 2010, Mr. Ellison agreed to decrease his annual salary to $1," Oracle said in the filing.

Oracle's fiscal 2010 began June 1.

Ellison, who is 64, founded Oracle in 1977. According to the SEC filing, he owns 1.18 billion shares of Oracle, or 23.4 percent of the company's total stock.

Agencies

Will Internet die by 2010?

Video killed the radio star. But could it also kill the Internet? New research from American analyst firm Nemertes Research Group says that by 2010, increasing Internet traffic, particularly video applications like YouTube and Hulu, will fatally clog the tubes.

This isn’t the first such prediction that has been made in the recent past: Brett Swanson of the Discovery Institute, a think tank, warned in 2007 of a coming surge of data that “today’s networks are not remotely prepared to handle”. So are the increasingly dire predictions of the demise of the Internet on the mark, or have rumours of the Net’s death been grossly exaggerated?

It is true that with the advent of Web 2.0, Internet usage has shifted to bandwidth-heavy applications like YouTube and Skype. The amount of traffic generated by YouTube in 2006 was more than that of the entire Internet in 2000. At 50-60 percent a year, the current growth of Internet traffic is enormous. However, several experts believe that the Internet is in no danger of collapsing under the weight of its own success.

Andrew Odlyzko, a computer scientist at the University of Minnesota who specialises in analysing historical trends in networking, believes that global Internet traffic is and will remain manageable with modest capacity updates.

There is some evidence to support that conclusion. For one, telecom companies in both Britain and America are already investing significant amounts in order to upgrade Internet infrastructure, including the last mile cable, to increase capacity. Secondly, the Internet was originally developed to withstand all kinds of catastrophes and has proven to be remarkably robust. It has coped with massive growth over the past 15 years. There’s no reason to suppose this can’t continue.

Anyway, engineers are preparing for the worst by working to replace the Internet with a superfast ‘grid’. So, even if capacity updates fail to keep pace with demand, an alternative will be in place. No one is suggesting that the Internet wouldn’t face operational difficulties if it was left just as it is.

The debate is over whether the rate of investment in capacity upgradation is fast enough to cope with rising demand. Studies like this can provide an impetus for telecom majors to invest in infrastructure. As of now, though, it’s safe to assume that the Net will be with us for a while more.

TNN

Will US face second recession in 2010?

Although the US economy is expected to return to growth later this year, there is a danger of a second recession if monetary easing and Tough times a weak dollar lead to increased inflation expectations, a report said.

Massive stimulus spending and moves by the Federal Reserve to fuel economic activity is expected to jump-start the anemic US economy in the last quarter of this year after it contracted 6.3 percent in fourth quarter of 2008.

But the Fed's moves to boost the economy by slashing interest rates and buying up billions in government debt could have undesired consequences, The Conference Board, a private research group, said in the report.

"If the United States experiences a too-rapid recovery, there may be a risk of another recession in 2010," said Bart van Ark, vice president and chief economist of The Conference Board.

"It may fuel expectations for a return to inflation, adding to the uncertainty concerning the pattern and path of economic recovery," he said.

The U.S. economy has the potential for a "double-dip" recession, Van Ark noted, similar to 1980 and 1982, as commodity prices rise on the back of a falling dollar and monetary easing.

He added, however, that the likelihood of this scenario taking place is small as deflation risks are great, while government stimulus spending should stem further economic decline and ease the flow of job losses.

The U.S. economy could contract by 2.6 percent in 2009, the largest annual decline since 1946, the Conference Board said.

Agencies

World jobless total could rise by 25 million?

The global economic crisis will push up unemployment by up to 25 million by 2010, the OECD head forecast on a 'truly scandalous failure' of regulatory supervision.

"We're heading for a loss of between eight and 10 million jobs in the OECD area... and 20 to 25 million in the world as a whole between now and 2010," Angel Gurria said on France's BFM radio.

The International Labour Organisation earlier forecast that the number of global unemployed could go up by 20 million to reach a record high point of 210 million people by the end of 2009.

The Organisation for Economic Co-operation and Development in Paris brings together 30 countries, including all the world's industrialised economies. The group conducts research and publishes economic forecasts.

Gurria also said that European countries should spend more in stimulus plans to kickstart their economies and suggested that the European Central Bank should lower interest rates because of falling inflation.

The European Union should "go beyond" the fiscal stimulus plans already announced, equivalent to around 1.4 percent of GDP, since "all the other major countries are going beyond that," Gurria said.

He also said that the OECD economies were in recession in the current quarter and would remain so for at least the first two quarters of 2009, with many countries being in recession for most of 2009.

"We predict a recovery at the end of 2009 and weak growth in 2010" he said.

Commenting on the build-up to the crisis, Gurria said there had been "a truly scandalous failure of regulation... and supervision", and poor risk management and corporate governance by companies.

Meanwhile there was fresh movement to stop the meltdown, with a decision by US president-elect Barack Obama to add 500,000 jobs to a 2.5-million-job creation goal to kickstart the world's biggest and ailing economy.

Vice president-elect Joseph Biden also confirmed the Obama team was working on a second economic stimulus package. According to US media, they want to craft a package worth between 675 and 775 billion dollars over two years.

In Europe, the Irish government said it was injecting 5.5 billion euros (7.6 billion dollars) to recapitalise three major banks: Anglo Irish Bank, Bank of Ireland and Allied Irish Banks.

British Prime Minister Gordon Brown promised to create at least 100,000 new jobs through a 10-billion-pound investment in infrastructure, in a newspaper interview.

The Bank of England's deputy governor John Gieve said in an interview with BBC television that the bank under-estimated how serious the credit crunch would be even though it knew that "crazy borrowing" was taking place.

Gieve said the Bank of England had predicted a correction as far back as two years ago but he added: "We didn't think it was going to be anything like as severe as it turned out to be."

Source: Economic Times