IT industry association NASSCOM said the export revenue target of 50 billion dollar by 2010 will be delayed by 3-4 quarters due to the global economic downturn, and warned of uncertainties in the near future.
The NASSCOM-McKinsey, however, presented an ambitious scenario for the Indian IT industry for the next 11 years saying the total revenue from export is expected to expand to 175 billion dollars by 2020 and revenues from the domestic market could achieve the 50 billion dollar mark.
"This, however, needs a concerted effort by both the industry and the government to ensure swift and sustained reforms in critical areas of education and infrastructure," NASSCOM said.
On the economic scenario, the organisation said the "global economic crisis will have far-reaching and as yet uncertain impact on the industry. Near term volumes and pricing is likely to come under pressure."
Commenting on the opportunities for the industry, Som Mittal, President, Nasscom, said, "The Indian IT industry is in the midst of unprecedented times because of the current economic environment. We expect the next few quarters to be extremely challenging with companies doing everything required to effectively overcome the challenges."
NASSCOM is of the view that the 2020 business landscape would be different from the one that was witnessed in the last decade as now it would be driven by global megatrends.
There are likely to be new verticals in the public sector, healthcare, media and utilities (which have adopted global sourcing only to a limited extent) along with new customer segments in the small and medium businesses.
"These new opportunities will result in export revenues of 175 billion dollar by 2020. On the back of these megatrends the Indian domestic industry too will experience significant growth and record a four-fold increase in revenues from 12 billion dollar in 2008 to 50 billion by 2020," it said.
"80 per cent of the incremental revenue growth by 2020 will be driven by opportunities outside of the current core markets, verticals and customer segments and the industry needs to redefine its value proposition to capture these," Mittal said.
The NASSCOM-McKinsey report said that India has been the destination for global sourcing over the last 10 years and has garnered a 51 per cent share of the industry today. India continues to be the most competitive among 25-30 low-cost locations even today.
Agencies
Tuesday, April 21, 2009
Oracle may layoff 10,000 jobs after Sun deal
Global IT giant Oracle's $7.4 billion acquisition of Sun Microsystems could terminate 10000 jobs, predicted a financial analyst, as per a report in IDG News Service.
Excluding charges related to the restructuring, Oracle expects the Sun deal to contribute $1.5 billion toward its earnings next year and $2 billion in the second year of the acquisition, making it more profitable in per-share contribution in the first year than the company had planned for the acquisitions of BEA, PeopleSoft and Siebel combined, according to Oracle President Safra Catz. Meanwhile, Tony Sacconaghi, a well-respected technology analyst with Sanford C. Bernstein & Co said, "That profitability will come via layoffs." Sacconaghi had been forecasting $800 million in operating profit for Sun's fiscal 2010, rather than the $1.5 billion predicted by Oracle.
"In order to deliver $1.5 billion in profit, Oracle would need to boost profits by $700 million assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," Sacconaghi wrote in a research note. But, Oracle declined to comment on any possible layoffs.
The acquisition was announced Monday, just two weeks after Sun's previous suitor, IBM, had walked away from the table after being unable to come to acquisition terms.
Analyst firm Technology Business Research (TBR) agreed that layoffs are coming, predicting that sales and marketing staff will be hit hardest. "Oracle will rapidly rationalize Sun's cost-base," the company said in a report on the deal. "This means general layoffs and a reshaping of cost centers such as services and support."
Sun is already in the process of slashing between 15 to 18 percent of its workforce, or as many as 6,000 employees.
Agencies
Excluding charges related to the restructuring, Oracle expects the Sun deal to contribute $1.5 billion toward its earnings next year and $2 billion in the second year of the acquisition, making it more profitable in per-share contribution in the first year than the company had planned for the acquisitions of BEA, PeopleSoft and Siebel combined, according to Oracle President Safra Catz. Meanwhile, Tony Sacconaghi, a well-respected technology analyst with Sanford C. Bernstein & Co said, "That profitability will come via layoffs." Sacconaghi had been forecasting $800 million in operating profit for Sun's fiscal 2010, rather than the $1.5 billion predicted by Oracle.
"In order to deliver $1.5 billion in profit, Oracle would need to boost profits by $700 million assuming no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000 depending on timing," Sacconaghi wrote in a research note. But, Oracle declined to comment on any possible layoffs.
The acquisition was announced Monday, just two weeks after Sun's previous suitor, IBM, had walked away from the table after being unable to come to acquisition terms.
Analyst firm Technology Business Research (TBR) agreed that layoffs are coming, predicting that sales and marketing staff will be hit hardest. "Oracle will rapidly rationalize Sun's cost-base," the company said in a report on the deal. "This means general layoffs and a reshaping of cost centers such as services and support."
Sun is already in the process of slashing between 15 to 18 percent of its workforce, or as many as 6,000 employees.
Agencies
Monday, April 20, 2009
World Wide Web conference opens in Madrid
A global conference on the World Wide Web got under way in Spain Monday, 20 years after the invention of the global information medium that has changed the daily lives of people around the world.
British software genius Tim Berners-Lee, one of the founders of the system, will give a keynote talk on Wednesday "which will reflect on the last 20 years and look forward to the next 20 years" of the Web.
Spanish Crown Prince Felipe and his wife Letizia are scheduled to attend the talk.
Over the five days of the 18th international World Wide Web conference, 105 research papers will be presented covering topics including interactive television, mobile web applications and the challenge of new media to traditional media.
The conference is organised each year by the International World Wide Web Conferences Steering Committee (IW3C2), a professional organization registered in Switzerland which promotes Web research and development.
It was held in China last year. The US will hold the next conference in 2010.
With the help of other scientists at the European Organisation for Nuclear Research (CERN), Berners-Lee set up the system to allow thousands of scientists around the world to stay in touch.
In March 1989, the young Berners-Lee handed his supervisor in Geneva a document entitled 'Information Management: a proposal."
The supervisor described it as "vague, but exciting" and gave it the go-ahead, although it took a good year or two to get off the ground and served nuclear physicists in Europe initially.
The WWW technology -- which simplifies the process of searching for information on the Internet -- was first made more widely available from 1991 after CERN was unable to ensure its development, and the organisation made a landmark decision two years later not to levy royalties.
As recently as 1994 there were only 500 fairly modest Web sites worldwide, according to Microsoft. Now there are millions.
Berners-Lee, now a researcher at Massachusetts Institute of Technology in the United States and a computer science professor at Southampton University in Britain, still heads the World Wide Web Consortium (3WC) that coordinates development of the Web.
Agencies
British software genius Tim Berners-Lee, one of the founders of the system, will give a keynote talk on Wednesday "which will reflect on the last 20 years and look forward to the next 20 years" of the Web.
Spanish Crown Prince Felipe and his wife Letizia are scheduled to attend the talk.
Over the five days of the 18th international World Wide Web conference, 105 research papers will be presented covering topics including interactive television, mobile web applications and the challenge of new media to traditional media.
The conference is organised each year by the International World Wide Web Conferences Steering Committee (IW3C2), a professional organization registered in Switzerland which promotes Web research and development.
It was held in China last year. The US will hold the next conference in 2010.
With the help of other scientists at the European Organisation for Nuclear Research (CERN), Berners-Lee set up the system to allow thousands of scientists around the world to stay in touch.
In March 1989, the young Berners-Lee handed his supervisor in Geneva a document entitled 'Information Management: a proposal."
The supervisor described it as "vague, but exciting" and gave it the go-ahead, although it took a good year or two to get off the ground and served nuclear physicists in Europe initially.
The WWW technology -- which simplifies the process of searching for information on the Internet -- was first made more widely available from 1991 after CERN was unable to ensure its development, and the organisation made a landmark decision two years later not to levy royalties.
As recently as 1994 there were only 500 fairly modest Web sites worldwide, according to Microsoft. Now there are millions.
Berners-Lee, now a researcher at Massachusetts Institute of Technology in the United States and a computer science professor at Southampton University in Britain, still heads the World Wide Web Consortium (3WC) that coordinates development of the Web.
Agencies
Satyam to be standalone unit, says TechM
Tech Mahindra Ltd, which is taking over Satyam Computer Services Ltd, said on Monday the fraud-hit Indian outsourcer would continue to function as a standalone unit.
The mid-sized Indian IT services firm's immediate priority was to retain and win back lost clients of Satyam, a statement from Tech Mahindra said.
Tech Mahindra's deal to take over Satyam will propel it into the top tier of Indian IT firms and throw a lifeline to the firm at the centre of India's biggest corporate scandal.
Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter.
The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Agencies
The mid-sized Indian IT services firm's immediate priority was to retain and win back lost clients of Satyam, a statement from Tech Mahindra said.
Tech Mahindra's deal to take over Satyam will propel it into the top tier of Indian IT firms and throw a lifeline to the firm at the centre of India's biggest corporate scandal.
Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter.
The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Agencies
Sunday, April 19, 2009
Is IBM no longer keen on buying Sun anymore?
IBM is no longer interested in buying smaller rival Sun Microsystems Inc at any price, CNBC reported, although many investors appear to believe a deal was still possible.
Citing sources close to Sun, CNBC said the high-end computer maker had approached International Business Machines Corp earlier this week to ask it to return to the negotiating table, indicating that Sun would be flexible about price.
But IBM has decided it is not interested in any further negotiations with Sun, the cable news network reported, citing sources close to IBM. IBM and Sun declined to comment.
IBM had withdrawn a $7 billion offer for Sun earlier this month, after the smaller company rejected the bid of up to $9.40 per share as too low, sources with knowledge of the matter have said.
Shares of Sun were up 4.24 percent at $6.39 after the CNBC report, but lower than before the market opened on Thursday. Sun traded at around $4.97 before talks between the two technology companies were first reported in March.
Avian Securities' head of research, Avi Cohen, said he believed the two sides would talk again.
"If the deal made sense a couple weeks ago, it certainly would still make sense today," he said. "If there was a willingness, which I think there is, if there was a business case, which I think there is, I think they will start up talks."
CNBC said IBM decided against the move after looking at Sun's structured contracts, as well as change of control clauses that would make an acquisition of the company costly.
It also reported that IBM's contacts within the US Justice Department, US Securities and Exchange Commission and the European Union have all advised the company that such a merger could be subject to an antitrust review lasting six to nine months.
Analysts have said a deal may be crucial for Sun's long-term survival as it has been losing market share in servers to IBM and Hewlett-Packard Co, and analysts expect it to report a third straight quarter of losses excluding special items.
Sun, which rose to prominence in the 1990s, had been searching for a buyer for several months, according to bankers.
The Silicon Valley company never fully recovered from the burst of the dot-com bubble burst in the early 2000s, when demand for servers cratered. It has also failed to fully capitalize on its software assets, including its Java software platform.
Agencies
Citing sources close to Sun, CNBC said the high-end computer maker had approached International Business Machines Corp earlier this week to ask it to return to the negotiating table, indicating that Sun would be flexible about price.
But IBM has decided it is not interested in any further negotiations with Sun, the cable news network reported, citing sources close to IBM. IBM and Sun declined to comment.
IBM had withdrawn a $7 billion offer for Sun earlier this month, after the smaller company rejected the bid of up to $9.40 per share as too low, sources with knowledge of the matter have said.
Shares of Sun were up 4.24 percent at $6.39 after the CNBC report, but lower than before the market opened on Thursday. Sun traded at around $4.97 before talks between the two technology companies were first reported in March.
Avian Securities' head of research, Avi Cohen, said he believed the two sides would talk again.
"If the deal made sense a couple weeks ago, it certainly would still make sense today," he said. "If there was a willingness, which I think there is, if there was a business case, which I think there is, I think they will start up talks."
CNBC said IBM decided against the move after looking at Sun's structured contracts, as well as change of control clauses that would make an acquisition of the company costly.
It also reported that IBM's contacts within the US Justice Department, US Securities and Exchange Commission and the European Union have all advised the company that such a merger could be subject to an antitrust review lasting six to nine months.
Analysts have said a deal may be crucial for Sun's long-term survival as it has been losing market share in servers to IBM and Hewlett-Packard Co, and analysts expect it to report a third straight quarter of losses excluding special items.
Sun, which rose to prominence in the 1990s, had been searching for a buyer for several months, according to bankers.
The Silicon Valley company never fully recovered from the burst of the dot-com bubble burst in the early 2000s, when demand for servers cratered. It has also failed to fully capitalize on its software assets, including its Java software platform.
Agencies
Will Sony Ericsson layoff additional 2,000 jobs?
Sony Ericsson Mobile Communications Ltd, the mobile-phone venture of Sony Corp and Ericsson AB, said it will cut an additional 2,000 jobs to revive profit amid falling demand.
The measure will reduce costs by 400 million euros ($524 million) annually by mid-2010 and cost 200 million euros to implement, Sony Ericsson said in a statement. It follows a plan announced in July to slash 2,000 positions to save 300 million euros, which has been completed, and another unveiled in January to reduce costs by 180 million euros by the end of 2009.
Sony Ericsson reported its third straight quarterly loss today after it slipped to fourth place in global handset shipments at the end of last year. The London-based company has suffered as consumers snapped up touchscreen models from competitors such as Apple Inc with its iPhone.
“As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand” Chief Executive Officer Dick Komiyama said in the statement. “We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible.”
Third loss
The first-quarter net loss was 293 million euros, compared with a profit of 133 million euros a year earlier, the company said. Sales fell 36 per cent to 1.74 billion euros.
Analysts in an SME Direkt survey predicted a 293 million- euro net loss on sales of 1.68 billion euros, based on 28 estimates.
Sony Ericsson’s gross margin, or sales minus manufacturing costs, narrowed to 8.4 per cent in the quarter from 29.2 per cent a year earlier.
Restructuring charges for the first two cost-cutting programmes will stay within the 300 million-euro sum set aside in July to pay for the measures, the company said.
The venture shipped 14.5 million phones, a 35 per cent drop from a year earlier. The company estimated its market share fell two percentage poi
nts to 6 per cent from the fourth quarter. The average selling price of its handsets fell to 120 euros from 121 euros in the fourth quarter as well as the year-earlier period.
Sony Ericsson predicts global industry handset unit sales will shrink at least 10 per cent this year from the 1.19 billion sold in 2008. Nokia Oyj, the world’s largest mobile-phone maker, yesterday reiterated its forecast of about a 10 per cent drop in the global handset market.
Nokia reiterated its margin targets for the year after announcing job cut programmes that will cover about 3,000 employees. The Espoo, Finland-based company’s first-quarter net income declined 90 per cent to 122 million euros.
Agencies
The measure will reduce costs by 400 million euros ($524 million) annually by mid-2010 and cost 200 million euros to implement, Sony Ericsson said in a statement. It follows a plan announced in July to slash 2,000 positions to save 300 million euros, which has been completed, and another unveiled in January to reduce costs by 180 million euros by the end of 2009.
Sony Ericsson reported its third straight quarterly loss today after it slipped to fourth place in global handset shipments at the end of last year. The London-based company has suffered as consumers snapped up touchscreen models from competitors such as Apple Inc with its iPhone.
“As expected, the first quarter of this year has been extremely challenging for Sony Ericsson due to continued weak global demand” Chief Executive Officer Dick Komiyama said in the statement. “We are aligning our business to the new market reality with the aim of bringing the company back to profitability as quickly as possible.”
Third loss
The first-quarter net loss was 293 million euros, compared with a profit of 133 million euros a year earlier, the company said. Sales fell 36 per cent to 1.74 billion euros.
Analysts in an SME Direkt survey predicted a 293 million- euro net loss on sales of 1.68 billion euros, based on 28 estimates.
Sony Ericsson’s gross margin, or sales minus manufacturing costs, narrowed to 8.4 per cent in the quarter from 29.2 per cent a year earlier.
Restructuring charges for the first two cost-cutting programmes will stay within the 300 million-euro sum set aside in July to pay for the measures, the company said.
The venture shipped 14.5 million phones, a 35 per cent drop from a year earlier. The company estimated its market share fell two percentage poi
nts to 6 per cent from the fourth quarter. The average selling price of its handsets fell to 120 euros from 121 euros in the fourth quarter as well as the year-earlier period.
Sony Ericsson predicts global industry handset unit sales will shrink at least 10 per cent this year from the 1.19 billion sold in 2008. Nokia Oyj, the world’s largest mobile-phone maker, yesterday reiterated its forecast of about a 10 per cent drop in the global handset market.
Nokia reiterated its margin targets for the year after announcing job cut programmes that will cover about 3,000 employees. The Espoo, Finland-based company’s first-quarter net income declined 90 per cent to 122 million euros.
Agencies
Friday, April 17, 2009
Will Cisco layoff 6,600 employees?
Is it pinkslips time at Cisco? Predicting a significant drop in revenue for the fourth quarter, a JP Morgan analyst has reported that Cisco Systems Inc "could" soon announce a workforce reduction of 10 percent (this could be equal to about 6,600 employees).
In his 49-page first-quarter 2009 preview of communications equipment and networking companies, analyst, Ehud Gelblum, of JP Morgan wrote, "We expect Cisco to guide fourth fiscal quarter revenue down 17-22%, year over year, as demand continues to deteriorate, in-line with our estimate for a 21 per cent year over year decline," "We believe Cisco could also announce a 10% headcount reduction, which we calculate could save $900M annually," he wrote.
The recent lowering of sales projections by two of Cisco's competitor's Juniper Network and F5 Network has led to a similar speculation about the company.
Cisco spokesman reportedly refused to comment on JP Morgan report directly. However, in a statement he said that on our fiscal second quarter 2009 earnings call in February we discussed a limited restructuring where we could in the near term see a total reduction of between 1500 and 2000 jobs company wide. This does not represent a broad-scale layoff in our workforce.
The spokesman added that this limited restructuring is part of our ongoing, targeted realignment of resources. While Cisco constantly manages its business priorities, resources and overall employee alignment as part of our overall business management process, we are sensitive to the impact these decisions have on employees during this challenging economic environment. We are doing everything possible to minimize the impact on employees affected by the limited restructuring.
Indiatimes
In his 49-page first-quarter 2009 preview of communications equipment and networking companies, analyst, Ehud Gelblum, of JP Morgan wrote, "We expect Cisco to guide fourth fiscal quarter revenue down 17-22%, year over year, as demand continues to deteriorate, in-line with our estimate for a 21 per cent year over year decline," "We believe Cisco could also announce a 10% headcount reduction, which we calculate could save $900M annually," he wrote.
The recent lowering of sales projections by two of Cisco's competitor's Juniper Network and F5 Network has led to a similar speculation about the company.
Cisco spokesman reportedly refused to comment on JP Morgan report directly. However, in a statement he said that on our fiscal second quarter 2009 earnings call in February we discussed a limited restructuring where we could in the near term see a total reduction of between 1500 and 2000 jobs company wide. This does not represent a broad-scale layoff in our workforce.
The spokesman added that this limited restructuring is part of our ongoing, targeted realignment of resources. While Cisco constantly manages its business priorities, resources and overall employee alignment as part of our overall business management process, we are sensitive to the impact these decisions have on employees during this challenging economic environment. We are doing everything possible to minimize the impact on employees affected by the limited restructuring.
Indiatimes
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