Many were predicting six months back that the Indian IT industry would be entering its twilight zone, but now there are indications that these predictions may go wrong. Several IT companies have restarted hiring and are giving salary hikes to their employees.
"That phase of drastic downturn is behind us," says S Ramadorai, CEO of Tata Consultancy Services (TCS). "There's stability now. The deal pipeline is encouraging, but the time it takes to close a deal remains long. And many customers are yet to fully open up their IT budgets," Ramadorai added.
While IT majors like TCS, Wipro and Cognizant have started promotions and salary hikes, Kris Gopalakrishnan, CEO and Managing Director of Infosys feels that things are looking better now, however the company prefers to wait and watch before giving any promotions or hikes, reports The Economic Times.
The recovery of the defamed Satyam Computer Services under the new owner Mahindra Satyam has also proved to be a boon for nearly 28,000 employees across all levels, with the restoration of the variable pay. The variable component is 10 percent at the entry level, 20 percent at the middle level and 30 percent at the senior management level. IT bellwether Wipro has lifted its freeze on hikes and promotions, at least for some employees.
Manpower supply company TeamLease, which saw its open positions drop significantly from 10,000 a month to 800 post-recession, has in the past couple of months seen those numbers rise to 3,500.
With the current trend companies have also started showing more confidence in the Indian market. Information infrastructure company, EMC has announced that it will invest $1.5 billion in India over the next five years, a level of investment from a single company that the sector has not seen in close to two years. Partha Iyengar, Regional Research Director in Gartner India, says the number of calls the company gets from customers for directions and consulting has gone up sharply in the last 3-4 months.
The Indian IT industry was one of the worst hit by the recession on account of its dependence on international markets - especially the U.S. and European markets. The freeze on IT budgets by companies around the world meant that new orders dried up. Industry association Nasscom initially forecast that IT exports would grow by 22-24 percent in 2008-09, but as the recession deepened, this was revised down to 16 percent. For this fiscal, the association has projected a 4-7 percent growth to $48-50 billion.
Agencies
Showing posts with label IT firms. Show all posts
Showing posts with label IT firms. Show all posts
Monday, September 14, 2009
Saturday, March 7, 2009
Have small IT firms outwit the big IT giants?
It is not a secret that are at the lower rung of the competition hierarchy in the European technology market. Indian firms still have a long way to go before they get lucrative contracts from that market. But, they seem to be gradually creeping into European market, with smaller firms taking a clear competitive edge than IT biggies like Infosys and TCS, reports CXO today.
"I find that the big Indian companies are too pragmatic. Not able to take my requests simply...CMM Level 5 etc is of no use to me... all I want is my requirement to be fulfilled," Paul Schewefer, Senior Vice President and Chief Information Officer, Continental AG.
It seems that a market like Europe demands a highly aggressive planning and quick implementation of strategies if one wants to make the cut. For small companies with lesser number of people, it is comparatively easier to implement changes without having to go through various processes, making it fast. And many small companies in this market have built capabilities in niche areas unlike some giants.
Moreover, Hannover, Germany, based Continental Group's technology expenditure for this year could be up to $500 million. And a lot of that could go to the smaller companies. "Partnering with smaller Indian firms helps them to invest in manpower and technologies, and that helps us as well," said Schewefer.
For the smaller firms, they are looking at the European market via the partnership model. For instance, Aakit Technologies has just sold 26 percent to Germany-based Aequitas Group. "The deal deepens our access to Europe, and also gives our German partner India capabilities," said Tayeb Barodawla, MD, Aakit Technologies.
Earlier, there were reports that Indian IT firms needed long-term deals if they are to make any gain in Europe. It is true that many Indian IT majors are still finding a major share of their revenue from European market through project services, while most of the MNCs drawing revenue from long-term outsourcing contracts.
IT analysts are still of the opinion that top Indian IT companies like TCS, Infosys and Wipro will have to shift focus on long-term outsourcing in order to make significant gains in the European market. These three companies derive around 25 percent of their revenue from European market.
Agencies
"I find that the big Indian companies are too pragmatic. Not able to take my requests simply...CMM Level 5 etc is of no use to me... all I want is my requirement to be fulfilled," Paul Schewefer, Senior Vice President and Chief Information Officer, Continental AG.
It seems that a market like Europe demands a highly aggressive planning and quick implementation of strategies if one wants to make the cut. For small companies with lesser number of people, it is comparatively easier to implement changes without having to go through various processes, making it fast. And many small companies in this market have built capabilities in niche areas unlike some giants.
Moreover, Hannover, Germany, based Continental Group's technology expenditure for this year could be up to $500 million. And a lot of that could go to the smaller companies. "Partnering with smaller Indian firms helps them to invest in manpower and technologies, and that helps us as well," said Schewefer.
For the smaller firms, they are looking at the European market via the partnership model. For instance, Aakit Technologies has just sold 26 percent to Germany-based Aequitas Group. "The deal deepens our access to Europe, and also gives our German partner India capabilities," said Tayeb Barodawla, MD, Aakit Technologies.
Earlier, there were reports that Indian IT firms needed long-term deals if they are to make any gain in Europe. It is true that many Indian IT majors are still finding a major share of their revenue from European market through project services, while most of the MNCs drawing revenue from long-term outsourcing contracts.
IT analysts are still of the opinion that top Indian IT companies like TCS, Infosys and Wipro will have to shift focus on long-term outsourcing in order to make significant gains in the European market. These three companies derive around 25 percent of their revenue from European market.
Agencies
Saturday, February 14, 2009
Sapient lays off 300 employees in India
Software firm Sapient has laid off 300 employees at its offices in Bangalore, Noida and Gurgaon as a result of the global economic downturn, which has impacted several IT firms.
"In order to adjust to this changing demand environment, Sapient has exited about 8 per cent of its people. Sapient employs approximately 6,400 globally and as a result of this rationalisation, 300 people in India have been impacted," the company spokesperson said.
He said the exited employees have received severance packages and full outplacement services, and would be considered for rehiring on a fast track basis if the company finds that it again needs their skills and experience.
"These people were laid off to right size the company. They were at different levels of the management," he said, adding that Sapient has two-third of its workforce in India.
Businesses worldwide are feeling the impact of the economic downturn, and as a result, are reducing budgets and delaying projects. Despite the short-term softness in demand, Sapient remains well-positioned in two large markets - IT services and interactive marketing.
The company would continue to make strategic investments and targeted hires in several areas that are expected to drive success in 2009, including trading and risk management, marketing and government services, he said.
Agencies
"In order to adjust to this changing demand environment, Sapient has exited about 8 per cent of its people. Sapient employs approximately 6,400 globally and as a result of this rationalisation, 300 people in India have been impacted," the company spokesperson said.
He said the exited employees have received severance packages and full outplacement services, and would be considered for rehiring on a fast track basis if the company finds that it again needs their skills and experience.
"These people were laid off to right size the company. They were at different levels of the management," he said, adding that Sapient has two-third of its workforce in India.
Businesses worldwide are feeling the impact of the economic downturn, and as a result, are reducing budgets and delaying projects. Despite the short-term softness in demand, Sapient remains well-positioned in two large markets - IT services and interactive marketing.
The company would continue to make strategic investments and targeted hires in several areas that are expected to drive success in 2009, including trading and risk management, marketing and government services, he said.
Agencies
Wednesday, February 11, 2009
India remains the kings of outsourcing business
Though the world is witnessing a severe meltdown, IT firms in India found it an opportunity to step up their outsourcing activities as global companies are resorting to several cost cutting initiatives. It is despite the fact that the country is facing serious threats to its outsourcing leadership from a few internal elements like vulnerabilities to terror attacks and erosion of the confidence in corporate governance.
However India will remain a major outsourcing destination. "Even though other markets will be redoubling efforts to seize opportunities from India, no other country yet presents a serious threat as a key outsourcing destination", said Arno Franz, Partner and Asia-Pacific President at TPI, while speaking to BusinessWeek. "China is still very much an emerging destination, while it is debatable whether any other single country has the breadth and depth of skills, experience and infrastructure to seriously challenge India's position," he added.
Franz pointed out that India-based providers made significant market share increases last year. In terms of total contract value (TCV), Indian outsourcers contributed 16 percent of the global market, up from 11 percent in 2007. They also accounted for over half of the Asia-Pacific outsourcing TCV. Moreover, two out of the three mega-deals in the second half of 2008 went to India-based providers. Mega deals, defined by TPI as contracts worth over $1 billion, numbered 12 between January and June last year.
Over the year, there was a record of 88 contracts in the region with a total contract value of over US$25 million, 50 of which were awarded in the second half. Despite the high number, the 2008 TCV of Asia-Pacific outsourcing deals was $12.3 billion, lower than 2007's $12.7 billion. Annualized contract value (ACV), which is the contract value divided by its duration, also fell from $2.7 billion in 2007, to $2.4 billion last year.
Agencies
However India will remain a major outsourcing destination. "Even though other markets will be redoubling efforts to seize opportunities from India, no other country yet presents a serious threat as a key outsourcing destination", said Arno Franz, Partner and Asia-Pacific President at TPI, while speaking to BusinessWeek. "China is still very much an emerging destination, while it is debatable whether any other single country has the breadth and depth of skills, experience and infrastructure to seriously challenge India's position," he added.
Franz pointed out that India-based providers made significant market share increases last year. In terms of total contract value (TCV), Indian outsourcers contributed 16 percent of the global market, up from 11 percent in 2007. They also accounted for over half of the Asia-Pacific outsourcing TCV. Moreover, two out of the three mega-deals in the second half of 2008 went to India-based providers. Mega deals, defined by TPI as contracts worth over $1 billion, numbered 12 between January and June last year.
Over the year, there was a record of 88 contracts in the region with a total contract value of over US$25 million, 50 of which were awarded in the second half. Despite the high number, the 2008 TCV of Asia-Pacific outsourcing deals was $12.3 billion, lower than 2007's $12.7 billion. Annualized contract value (ACV), which is the contract value divided by its duration, also fell from $2.7 billion in 2007, to $2.4 billion last year.
Agencies
Saturday, November 29, 2008
Dell likely to send more work to Asia
Since the beginning of the slowdown, IT firms have been maintaining that India will benefit if firms try to cut costs. Now, there is evidence that it actually may be happening.
In a conference call, Dell’s Asia-Pacific and Japan head Steve Felice said there is an opportunity to shift more work to Asia and Dell will do it. In its third-quarter results announced, the US-based PC manufacturer’s tight rein on costs helped it post better earnings despite a sales slump.
Dell has invested heavily in its India and China factories. From Bangalore, it has built systems management capability and software for enterprise activity. While in China, it does design work and R&D. In addition, in Malaysia’s Cyberjaya, it does software development. “Our intention is to grow these,” said Felice. Elsewhere, Dell has announced job cuts.
“We don’t just service Asia out of these locations. They have worked well globally to the extent that there are opportunities to shift more work to Asia arise, we will do it... We are happy with the performance of these facilities to serve global needs and will continue to invest them depending on market conditions,” Felice said.
However, he said the growth in Asia was not necessarily linked to the cost-cutting in the US and was in response to the growth in other parts of the world.
Felice said there was decline in overall IT spending in Asia-Pacific and Japan. Dell had weathered it and grown. Terming India’s growth as outstanding, he said the country had witnessed 77% growth in unit terms and 48% growth in revenues for Dell in the third quarter.
For China, growth was up 44% in unit terms and 18% in revenue terms. “We are extremely committed to India,” he added. The surge in growth has primarily come from consumers and the small.
Source: Times News Network
In a conference call, Dell’s Asia-Pacific and Japan head Steve Felice said there is an opportunity to shift more work to Asia and Dell will do it. In its third-quarter results announced, the US-based PC manufacturer’s tight rein on costs helped it post better earnings despite a sales slump.
Dell has invested heavily in its India and China factories. From Bangalore, it has built systems management capability and software for enterprise activity. While in China, it does design work and R&D. In addition, in Malaysia’s Cyberjaya, it does software development. “Our intention is to grow these,” said Felice. Elsewhere, Dell has announced job cuts.
“We don’t just service Asia out of these locations. They have worked well globally to the extent that there are opportunities to shift more work to Asia arise, we will do it... We are happy with the performance of these facilities to serve global needs and will continue to invest them depending on market conditions,” Felice said.
However, he said the growth in Asia was not necessarily linked to the cost-cutting in the US and was in response to the growth in other parts of the world.
Felice said there was decline in overall IT spending in Asia-Pacific and Japan. Dell had weathered it and grown. Terming India’s growth as outstanding, he said the country had witnessed 77% growth in unit terms and 48% growth in revenues for Dell in the third quarter.
For China, growth was up 44% in unit terms and 18% in revenue terms. “We are extremely committed to India,” he added. The surge in growth has primarily come from consumers and the small.
Source: Times News Network
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